AZZ Inc. Issues Fiscal Year 2025 Guidance and Reaffirms Previously Issued Fiscal Year 2024 Guidance
- Sales expected to increase to $1.5 - $1.6 billion in FY 2025 from $1.45 - $1.55 billion in FY 2024
- Adjusted EBITDA projected to be between $300 - $350 million in FY 2025, up from $315 - $335 million in FY 2024
- Adjusted Diluted EPS guidance raised to $4.25 - $4.75 for FY 2025 from $4.15 - $4.35 in FY 2024
- Excludes impact of future acquisitions and includes equity income from minority interest in unconsolidated subsidiary
- None.
Insights
The updated financial guidance provided by AZZ Inc. for fiscal year 2025 suggests a steady growth trajectory, with projected sales increasing to a range of $1.5 to $1.6 billion. This is a modest uptick from the $1.45 to $1.55 billion range set for fiscal year 2024. One key aspect to consider is the Adjusted EBITDA forecast, which shows a wider range for 2025 ($300 to $350 million) compared to 2024 ($315 to $335 million). This indicates management's anticipation of potential variability in operational efficiency or market conditions. The forecasted Adjusted Diluted EPS also shows an upward trend, with a range of $4.25 to $4.75 for 2025, compared to $4.15 to $4.35 for 2024. The inclusion of approximately $10-$12 million of equity income from its minority interest in an unconsolidated subsidiary is noteworthy as it reflects strategic investments that could bolster earnings.
Investors should note that the guidance excludes the impact of any future acquisitions, which implies that the company's current growth expectations are organic. However, any significant acquisitions made during the year could materially alter the financial outlook. Additionally, the guidance includes the add back of amortization of intangible assets, which is a non-cash expense that can affect net income but not cash flows. This adjustment is common in financial reporting to provide a clearer picture of a company's operational performance.
The reaffirmation of the fiscal year 2024 guidance and the new fiscal year 2025 guidance by AZZ Inc. suggest that the company is maintaining a positive outlook on its market position and operational capabilities. The hot-dip galvanizing and coil coating industry is influenced by factors such as construction activity, infrastructure spending and manufacturing output. Given that AZZ Inc. is a leading independent provider in this space, its financial performance can serve as an indicator of industry health and demand. The projected sales growth aligns with expectations for increased infrastructure and construction projects, particularly in regions experiencing economic growth or recovery.
Furthermore, the guidance suggests that AZZ Inc. is expecting to maintain or improve its profit margins. This could be indicative of effective cost management strategies or pricing power in the market. Investors and industry stakeholders would be interested in understanding how the company plans to navigate raw material costs, competitive pressures and potential economic headwinds that could impact these projections.
The forward-looking statements by AZZ Inc. regarding their financial outlook can be interpreted within the broader economic context. The company's confidence in increasing its sales and adjusted EPS suggests a favorable view of the economic conditions for the fiscal year 2025. This optimism may be based on expectations of continued industrial growth, stable commodity prices and robust demand in sectors that require galvanizing and coil coating services. However, it is crucial to consider the macroeconomic factors that could influence these projections, such as interest rate changes, inflationary pressures and global trade dynamics.
The wider range for the Adjusted EBITDA forecast could be a strategic move to account for these uncertainties. It reflects a prudent approach to financial planning, acknowledging that while the company's core operations may be strong, external economic factors can have a significant impact. Stakeholders should monitor economic indicators relevant to AZZ Inc.'s business, such as construction spending and manufacturing PMI (Purchasing Managers' Index), to gauge the likelihood of the company meeting or exceeding its guidance.
Reaffirming Previously Issued FY 2024 Guidance | New FY 2025 Guidance (1) | |
Sales | ||
Adjusted EBITDA | ||
Adjusted Diluted EPS |
(1) FY2025 Guidance Assumptions: | |
a. | Management's current outlook is reflected at the mid-point of the ranges. |
b. | Excludes the impact of any future acquisitions. |
c. | Includes approximately |
d. | Adjusted Diluted EPS guidance includes the add back of amortization related to the Company's intangible assets. |
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"Finally, we will continue to focus on working capital improvements, as well as enhancing incremental operational productivity across both segments, while further optimizing our corporate structure. AZZ is the leading independent hot-dip galvanizing and coil coating company across
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 services, 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 services; 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 services that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in
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.
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