AZZ Inc. Issues Fiscal Year 2026 Guidance

Rhea-AI Summary

AZZ Inc. (NYSE: AZZ) has released its financial guidance for fiscal year 2026 (March 1, 2025 - February 28, 2026), projecting sales of $1.625 - $1.725 billion and adjusted EBITDA of $360 - $400 million. The company expects adjusted diluted EPS of $5.50 - $6.10.

Key guidance assumptions include $15-$18 million in equity income from minority interest, operational status of the new Washington, Missouri plant in first half FY2026, reduced capital expenditures of $60-$80 million, and planned debt reduction of $140-$180 million. The company targets a debt-to-leverage ratio between 1.5 to 2.5 times, with expected interest expense of $60-$70 million.

Metal Coatings EBITDA range is projected at 27% to 32%, while Precoat Metals EBITDA range will maintain at 17% to 22%. The company aims to focus on sustainable organic growth, M&A opportunities, and strong free cash flow generation.

Positive

• Projected sales growth to $1.625 - $1.725 billion in FY2026 from $1.550 - $1.600 billion in FY2025
• Increased adjusted EBITDA guidance to $360 - $400 million from $340 - $360 million
• Higher adjusted diluted EPS projection of $5.50 - $6.10 from $5.00 - $5.30
• Planned debt reduction of $140 to $180 million
• Reduced capital expenditures due to facility completion
• Metal Coatings EBITDA margin improvement to 27-32%

Negative

• Expected high interest expense of $60-$70 million
• New Washington facility won't be earnings accretive until second half of FY2026

News Market Reaction

+5.48%

1 alert

+5.48% News Effect

On the day this news was published, AZZ gained 5.48%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

FORT WORTH, Texas, Feb. 5, 2025 /PRNewswire/ -- AZZ Inc. (NYSE: AZZ), the leading independent provider of hot-dip galvanizing and coil coating solutions, today announced financial guidance for fiscal year 2026. Fiscal year 2026 refers to the 12-month period beginning on March 1, 2025, and ending on February 28, 2026. 

	FY2025 Guidance	FY2026 Guidance (1)
Sales	$1.550 - $1.600 billion	$1.625 - $1.725 billion
Adjusted EBITDA	$340 - $360 million	$360 - $400 million
Adjusted Diluted EPS	$5.00 - $5.30	$5.50 - $6.10

1. FY2026 Guidance Assumptions:
   1. 1. Results include approximately $15-$18 million of equity income from AZZ's minority interest in its unconsolidated subsidiary.
      2. The newly built Washington, Missouri plant is expected to be operational in the first half of FY2026, and accretive to earnings in the second half of FY2026.
      3. Capital expenditures are expected to be approximately $60 to $80 million, down from $100 to $120 million for FY2025 due to the completion of the Washington, Missouri facility in early 2025.
      4. Debt-to-leverage ratio is estimated to be between 1.5 to 2.5 times, interest expense is expected to be $60 to $70 million, and the annualized effective tax rate of 25% excludes federal regulatory changes that may emerge.
      5. Debt reduction in the range of $140 to $180 million.
      6. Adjusted Diluted EPS guidance includes adding back amortization related to the Company's intangible assets. 
      7. Excludes all potential M&A activities.

Tom Ferguson, President, and Chief Executive Officer of AZZ, said, "We are confident about AZZ's operating performance as we complete fiscal year 2025 and begin fiscal year 2026 in a few weeks. Our focus next fiscal year will be to drive sustainable, profitable organic growth, execute upon our robust M&A pipeline, and continue to generate strong free cash flow. FY2026 guidance includes an increase in our Metal Coatings EBITDA range to 27% to 32% and maintaining our Precoat Metals EBITDA range of 17% to 22%, on expectations of market share expansion and superior customer service, quality, and operational excellence." 

"We are focused on ramping up production of the new coil coating line in Washington, Missouri, which will attain normal run-rate performance in the second half of the year. Both Segments are focused on enhancing operational productivity while providing outstanding customer service and quality. AZZ is the leading independent hot-dip galvanizing and coil coating company in North America with irreplaceable footprints in our served markets. We generate industry-leading margins, returns and free cash flow. We have access to the capital necessary to sustain our operations, while actively pursuing initiatives to drive future growth and enhance shareholder value. We are excited about the opportunities ahead," Ferguson concluded.

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. 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 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 products and 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 products or 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 products we inventory or sell or the 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; 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 29, 2024, 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.

Non-GAAP Financial Measures
Information reconciling forward-looking Adjusted EBITDA from continuing operations and Adjusted Diluted Earnings from continuing operations to their respective most directly comparable GAAP financial measures, net income from continuing operations and diluted EPS, is unavailable to AZZ without unreasonable effort because management cannot predict with reasonable certainty all of the necessary components of GAAP net income from continuing operations (such as income taxes, interest expense, unusual or significant gains and losses, acquisition-related expenses, net gains or losses on investments in equity securities and potential future asset impairments). These items are uncertain, depend on various factors, and could have a material impact on net income from continuing operations and diluted EPS from continuing operations for the relevant periods. We therefore, do not present a guidance range for, or a reconciliation to, the nearest GAAP financial measures of net income from continuing operations or diluted EPS from continuing operations.

Company Contact: 
David Nark, Senior Vice President of Marketing, Communications, and Investor Relations
AZZ Inc.
(817) 810-0095
www.azz.com 

Investor Contact:
Sandy Martin, Phillip Kupper
Three Part Advisors
(214) 616-2207
www.threepa.com 

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SOURCE AZZ, Inc.

FAQ

What is AZZ's projected revenue guidance for fiscal year 2026?

AZZ projects sales of $1.625 - $1.725 billion for fiscal year 2026.

What is AZZ's expected adjusted EPS range for FY2026?

AZZ expects adjusted diluted EPS of $5.50 - $6.10 for fiscal year 2026.

How much debt reduction is AZZ targeting in FY2026?

AZZ is targeting debt reduction in the range of $140 to $180 million in FY2026.

What are AZZ's EBITDA margin targets for Metal Coatings in FY2026?

AZZ targets Metal Coatings EBITDA margins of 27% to 32% in FY2026.

When will AZZ's new Washington, Missouri plant become operational?

The Washington, Missouri plant is expected to be operational in the first half of FY2026.

What are AZZ's projected capital expenditures for FY2026?

AZZ projects capital expenditures of $60 to $80 million for FY2026.