AZZ Inc. Reports Fiscal Year 2025 Second Quarter Results
AZZ Inc. reported strong fiscal year 2025 second quarter results, with total sales up 2.6% to $409.0 million. The company saw growth in both its Metal Coatings and Precoat Metals segments. Net income increased 25.0% to $35.4 million, while adjusted EBITDA rose to $91.9 million or 22.5% of sales. AZZ reduced its debt by $20.0 million in the quarter and $45 million year-to-date, lowering its net leverage ratio to 2.7x.
The company has narrowed and raised its fiscal year 2025 financial guidance, now expecting sales of $1.525 - $1.625 billion and adjusted diluted EPS of $4.70 - $5.10. AZZ also repriced its Term Loan B, reducing the borrowing rate by 75 basis points to SOFR+2.50%.
AZZ Inc. ha riportato risultati solidi per il secondo trimestre dell'anno fiscale 2025, con un aumento delle vendite totali del 2,6% a 409,0 milioni di dollari. L'azienda ha registrato una crescita sia nel segmento dei rivestimenti metallici che in quello dei metalli pretrattati. Il reddito netto è aumentato del 25,0% a 35,4 milioni di dollari, mentre l'EBITDA rettificato è salito a 91,9 milioni di dollari, pari al 22,5% delle vendite. AZZ ha ridotto il proprio debito di 20,0 milioni di dollari nel trimestre e di 45 milioni dall'inizio dell'anno, abbassando il suo rapporto di leva finanziaria netto a 2,7x.
L'azienda ha ridotto e aumentato le sue previsioni finanziarie per l'anno fiscale 2025, ora prevedendo vendite tra 1,525 e 1,625 miliardi di dollari e un utile per azione diluito rettificato tra 4,70 e 5,10 dollari. AZZ ha inoltre rinegoziato il suo Term Loan B, riducendo il tasso di interesse di 75 punti base a SOFR+2,50%.
AZZ Inc. reportó resultados sólidos para el segundo trimestre del año fiscal 2025, con un aumento del 2.6% en ventas totales a 409.0 millones de dólares. La empresa vio crecimiento en sus segmentos de Recubrimientos Metálicos y Metales Pretratados. Los ingresos netos aumentaron un 25.0% a 35.4 millones de dólares, mientras que el EBITDA ajustado ascendió a 91.9 millones de dólares, o el 22.5% de las ventas. AZZ redujo su deuda en 20.0 millones de dólares en el trimestre y 45 millones en lo que va del año, disminuyendo su ratio de apalancamiento neto a 2.7x.
La empresa ha ajustado y elevado sus proyecciones financieras para el año fiscal 2025, ahora esperando ventas de entre 1.525 y 1.625 mil millones de dólares y una ganancia por acción diluida ajustada de entre 4.70 y 5.10 dólares. AZZ también reestructuró su Préstamo a Plazo B, reduciendo la tasa de interés en 75 puntos base a SOFR+2.50%.
AZZ Inc.는 2025 회계연도 2분기 실적을 발표하며 총 매출이 2.6% 증가하여 4억 900만 달러에 달했다고 보고했습니다. 회사는 금속 코팅 및 전처리 금속 부문에서 성장을 경험했습니다. 순이익이 25.0% 증가하여 3,540만 달러에 달했다고 밝혔으며, 조정 후 EBITDA는 9,190만 달러로 매출의 22.5%에 해당합니다. AZZ는 이 분기 동안 부채를 2천만 달러 감소시켰고, 연초 이후로는 4,500만 달러 감소하여 순 레버리지 비율을 2.7배로 낮췄습니다.
회사는 2025 회계연도 재무 가이던스를 축소하고 상향 조정했습니다, 현재 15억 2500만에서 16억 2500만 달러의 매출과 조정 후 희석 주당순이익이 4.70달러에서 5.10달러일 것으로 예상하고 있습니다. AZZ는 또한 Term Loan B의 가격을 조정하여 차입금리가 75bp 낮아진 SOFR+2.50%로 설정했습니다.
AZZ Inc. a annoncé de bons résultats pour le deuxième trimestre de l'exercice fiscal 2025, avec une augmentation des ventes totales de 2,6% à 409,0 millions de dollars. L'entreprise a connu une croissance dans ses segments de revêtements métalliques et de métaux prétraités. Le revenu net a augmenté de 25,0% pour atteindre 35,4 millions de dollars, tandis que l'EBITDA ajusté a grimpé à 91,9 millions de dollars, soit 22,5% des ventes. AZZ a réduit sa dette de 20,0 millions de dollars au cours du trimestre et de 45 millions depuis le début de l'année, réduisant son ratio d'endettement net à 2,7x.
L'entreprise a révisé à la baisse et relevé ses prévisions financières pour l'exercice fiscal 2025, s'attendant désormais à des ventes entre 1,525 et 1,625 milliard de dollars et à un BPA dilué ajusté de 4,70 à 5,10 dollars. AZZ a également renégocié son Prêt à Terme B, réduisant le taux d'intérêt de 75 points de base à SOFR+2,50%.
AZZ Inc. berichtete über starke Ergebnisse für das zweite Quartal des Geschäftsjahres 2025, mit einem Anstieg des Gesamtumsatzes um 2,6% auf 409,0 Millionen Dollar. Das Unternehmen verzeichnete Wachstum in sowohl seinem Segment der Metallbeschichtungen als auch in den Segmenten der vorkonditionierten Metalle. Der Nettogewinn stieg um 25,0% auf 35,4 Millionen Dollar, während das bereinigte EBITDA auf 91,9 Millionen Dollar oder 22,5% des Umsatzes anstieg. AZZ reduzierte seine Schulden im Quartal um 20,0 Millionen Dollar und um 45 Millionen Dollar seit Jahresbeginn, wodurch das netto Leverage-Verhältnis auf 2,7x gesenkt wurde.
Das Unternehmen hat seine finanzielle Prognose für das Geschäftsjahr 2025 eingegrenzt und erhöht, erwartet nun Umsätze zwischen 1,525 und 1,625 Milliarden Dollar sowie ein bereinigtes verwässertes EPS zwischen 4,70 und 5,10 Dollar. AZZ hat auch seinen Term Loan B neu bewertet und den Zinssatz um 75 Basispunkte auf SOFR+2,50% gesenkt.
- Total sales increased 2.6% to $409.0 million
- Net income rose 25.0% to $35.4 million
- Adjusted EBITDA margin improved to 22.5% from 22.1% last year
- Debt reduced by $45 million year-to-date, lowering net leverage ratio to 2.7x
- Raised fiscal year 2025 guidance for sales and adjusted diluted EPS
- Repriced Term Loan B, reducing borrowing rate by 75 basis points
- None.
Insights
AZZ Inc.'s Q2 FY2025 results demonstrate solid performance and financial stability. Key highlights include:
- Total sales increased by
2.6% to$409.0 million - Adjusted EBITDA margin improved to
22.5% from22.1% year-over-year - Net income grew by
25% to$35.4 million - Adjusted EPS rose
7.9% to$1.37
The company's debt reduction efforts are noteworthy, with
AZZ's revised FY2025 guidance, projecting sales of
Overall, AZZ's financial position appears strong, with improving margins, debt reduction and positive cash flow generation. The company's diverse end-market exposure and focus on operational efficiency bode well for future performance.
AZZ's Q2 results reflect resilience in its core markets and operational improvements. The Metal Coatings segment's
The Precoat Metals segment showed stronger growth, with sales up
The new Washington, Missouri facility, progressing on budget and schedule, represents a strategic expansion of capacity. This investment, along with the
The company's ability to improve margins and reduce debt while investing in growth initiatives demonstrates effective management and a strong competitive position in its niche markets. The revised guidance suggests continued momentum, though investors should monitor potential headwinds from economic cycles affecting industrial demand.
Sales and Margin Expansion Drives Quarterly Results; Narrowing and Raising Fiscal Year 2025 Financial Guidance
Fiscal Year 2025 Second Quarter Overview (as compared to prior year(1)):
- Total Sales
, up$409.0 million 2.6% - Metal Coatings sales of
, up$171.5 million 1.0% - Precoat Metals sales of
, up$237.5 million 3.8%
- Metal Coatings sales of
- Net Income of
, up$35.4 million 25.0% and Adjusted net income of , up$41.3 million 11.0% - GAAP EPS of
per diluted share, up$1.18 21.6% , and Adjusted diluted EPS of , up$1.37 7.9% - Adjusted EBITDA of
or$91.9 million 22.5% of sales, versus prior year of , or$88.0 million 22.1% of sales - Segment Adjusted EBITDA margin of
31.7% for Metal Coatings and21.1% for Precoat Metals - Debt reduction of
in the quarter; fiscal year-to-date debt reduction of$20.0 million , net leverage ratio 2.7x$45 million - Cash dividend of
per share to common shareholders.$0.17 - Subsequent to the end of the quarter, on September 24, 2024, repriced Term Loan B reducing borrowing rate by 75 basis points to SOFR+
2.50%
(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
Our fiscal year-to-date cash from operations of
Fiscal Year 2025 Second Quarter Segment Performance
AZZ Metal Coatings
Sales of
AZZ Precoat Metals
Sales of
Balance Sheet, Liquidity and Capital Allocation
The Company generated significant operating cash of
Financial Outlook - Fiscal Year 2025 Revised Guidance
Revised Fiscal Year 2025 guidance reflects our best estimates given expected market conditions for the full year, lower interest expense, an annualized effective tax rate of
Revised FY25 Guidance(1) | ||
Sales | ||
Adjusted EBITDA | ||
Adjusted Diluted EPS | ||
(1) FY2025 Revised Guidance Assumptions: | |
a. | Excludes the impact of any future acquisitions. |
b. | Includes approximately |
c. | Management defines adjusted earnings per share to exclude intangible asset amortization, acquisition expenses, transaction related. expenses, certain legal settlements and accruals, and certain expenses related to non-recurring events from the reported GAAP measure. |
Conference Call Details
AZZ Inc. will conduct a live conference call with Tom Ferguson, Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Senior Vice President of Marketing, Communications, and Investor Relations to discuss financial results for the second quarter of the fiscal year 2025, Thursday, October 10, 2024, 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 (877) 344-7529 or (412) 317-0088 (international), replay access code: 5013909, through October 17, 2024, 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. 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 manufactured 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, paint used in our coil coating process; supply-chain vendor delays; 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
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
---Financial tables on the following page---
AZZ Inc. | ||||||||
Condensed Consolidated Statements of Income | ||||||||
(dollars in thousands, except per share data) | ||||||||
(unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Sales | $ 409,007 | $ 398,542 | $ 822,215 | $ 789,415 | ||||
Cost of sales | 305,493 | 301,296 | 616,031 | 595,150 | ||||
Gross margin | 103,514 | 97,246 | 206,184 | 194,265 | ||||
Selling, general and administrative | 35,868 | 36,239 | 68,789 | 67,762 | ||||
Operating income | 67,646 | 61,007 | 137,395 | 126,503 | ||||
Interest expense, net | (21,909) | (27,770) | (44,683) | (56,476) | ||||
Equity in earnings of unconsolidated subsidiaries | 1,478 | 974 | 5,302 | 2,394 | ||||
Other income, net | 417 | 88 | 621 | 50 | ||||
Income before income taxes | 47,632 | 34,299 | 98,635 | 72,471 | ||||
Income tax expense | 12,213 | 5,967 | 23,614 | 15,617 | ||||
Net income | 35,419 | 28,332 | 75,021 | 56,854 | ||||
Series A Preferred Stock Dividends | — | (3,600) | (1,200) | (7,200) | ||||
Redemption premium on Series A Preferred Stock | — | — | (75,198) | — | ||||
Net income (loss) available to common shareholders | $ 35,419 | $ 24,732 | $ (1,377) | $ 49,654 | ||||
Basic earnings (loss) per common share | $ 1.19 | $ 0.99 | $ (0.05) | $ 1.99 | ||||
Diluted earnings (loss) per common share | $ 1.18 | $ 0.97 | $ (0.05) | $ 1.95 | ||||
Weighted average shares outstanding - Basic | 29,852 | 25,054 | 28,294 | 24,997 | ||||
Weighted average shares outstanding - Diluted | 30,057 | 29,210 | 28,294 | 29,196 |
AZZ Inc. | |||||||
Segment Reporting | |||||||
(dollars in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended August 31, | Six Months Ended August 31, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Sales: | |||||||
Metal Coatings | $ 171,500 | $ 169,837 | $ 348,152 | $ 338,631 | |||
Precoat Metals | 237,507 | 228,705 | 474,063 | 450,784 | |||
Total Sales | $ 409,007 | $ 398,542 | $ 822,215 | $ 789,415 | |||
Adjusted EBITDA | |||||||
Metal Coatings | $ 54,366 | $ 51,647 | $ 109,011 | $ 103,510 | |||
Precoat Metals | 50,169 | 46,446 | 97,855 | 89,601 | |||
Infrastructure Solutions | 1,469 | 792 | 5,264 | 2,190 | |||
Total Segment EBITDA(1) | $ 106,004 | $ 98,885 | $ 212,130 | $ 195,301 | |||
(1) See the non-GAAP disclosure section below for a reconciliation between the various measures calculated in accordance with GAAP to the non-GAAP financial measures. |
AZZ Inc. | ||||
Condensed Consolidated Balance Sheets | ||||
(dollars in thousands) | ||||
(unaudited) | ||||
As of | ||||
August 31, 2024 | February 29, 2024 | |||
Assets: | ||||
Current assets | $ 401,156 | $ 366,999 | ||
Property, plant and equipment, net | 569,732 | 541,652 | ||
Other non-current assets, net | 1,269,442 | 1,286,854 | ||
Total assets | $ 2,240,330 | $ 2,195,505 | ||
Liabilities, Mezzanine Equity, and Shareholders' Equity: | ||||
Current liabilities | $ 217,130 | $ 194,306 | ||
Long-term debt, net | 912,572 | 952,742 | ||
Other non-current liabilities | 110,872 | 113,966 | ||
Mezzanine Equity | — | 233,722 | ||
Shareholders' Equity | 999,756 | 700,769 | ||
Total liabilities, mezzanine equity, and shareholders' equity | $ 2,240,330 | $ 2,195,505 | ||
AZZ Inc. | ||||
Condensed Consolidated Statements of Cash Flows | ||||
(dollars in thousands) | ||||
(unaudited) | ||||
Six Months Ended August 31, | ||||
2024 | 2023 | |||
Net cash provided by operating activities | $ 119,430 | $ 118,341 | ||
Net cash used in investing activities | (58,740) | (42,706) | ||
Net cash provided by (used in) financing activities | (62,750) | (76,380) | ||
Effect of exchange rate changes on cash | (137) | 33 | ||
Net increase in cash and cash equivalents | (2,197) | (712) | ||
Cash and cash equivalents at beginning of period | 4,349 | 2,820 | ||
Cash and cash equivalents at end of period | $ 2,152 | $ 2,108 |
AZZ Inc.
Non-GAAP Disclosure
Adjusted Net Income, Adjusted Earnings Per Share and Adjusted EBITDA
In addition to reporting financial results in accordance with Generally Accepted Accounting Principles in
Management defines adjusted net income and adjusted earnings per share to exclude intangible asset amortization, acquisition expenses, transaction related expenses, certain legal settlements and accruals, and certain expenses related to non-recurring events from the reported GAAP measure. Management defines Adjusted EBITDA as earnings excluding depreciation, amortization, interest and provision for income taxes. Management believes Adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company's ability to incur and service debt and its capacity for making capital expenditures in the future.
Management provides non-GAAP financial measures for informational purposes and to enhance understanding of the Company's GAAP consolidated financial statements. Readers should consider these measures in addition to, but not instead of or superior to, the Company's financial statements prepared in accordance with GAAP, and undue reliance should not be placed on these non-GAAP financial measures. Additionally, these non-GAAP financial measures may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
The following tables provides a reconciliation for the three months ended August 31, 2024 and August 31, 2023 between the non-GAAP Adjusted Earnings Measures to the most comparable measures, calculated in accordance with GAAP (dollars in thousands, except per share data):
Adjusted Net Income and Adjusted Earnings Per Share
Three Months Ended August 31, | Six Months Ended August 31, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Amount | Per Diluted | Amount | Per Diluted | Amount | Per Diluted | Amount | Per Diluted | ||||||||
Net income | $ 35,419 | $ 28,332 | $ 75,021 | $ 56,854 | |||||||||||
Less: Series A Preferred Stock dividends | — | (3,600) | (1,200) | (7,200) | |||||||||||
Less: Redemption premium on Series A | — | — | (75,198) | — | |||||||||||
Net income available to common | 35,419 | $ 1.18 | 24,732 | $ 0.97 | (1,377) | $ (0.05) | 49,654 | $ 1.95 | |||||||
Impact of Series A Preferred Stock | — | 3,600 | 1,200 | 7,200 | |||||||||||
Net income and diluted earnings per share for | 35,419 | $ 1.18 | 28,332 | $ 0.97 | (177) | $ (0.01) | 56,854 | $ 1.95 | |||||||
Adjustments: | |||||||||||||||
Amortization of intangible assets | 5,787 | 0.19 | 5,882 | 0.20 | 11,580 | 0.38 | 12,236 | 0.42 | |||||||
Legal settlement and accrual(3) | — | — | 5,750 | 0.20 | — | — | 5,750 | 0.20 | |||||||
Retirement and other severance expense(4) | 1,888 | 0.06 | — | — | 1,888 | 0.06 | — | — | |||||||
Redemption premium on Series A Preferred | — | — | — | — | 75,198 | 2.50 | — | — | |||||||
Subtotal | 7,675 | 0.25 | 11,632 | 0.40 | 88,666 | 2.94 | 17,986 | 0.62 | |||||||
Tax impact(6) | (1,842) | (0.06) | (2,792) | (0.10) | (3,232) | (0.11) | (4,317) | (0.15) | |||||||
Total adjustments | 5,833 | 0.19 | 8,840 | 0.30 | 85,434 | 2.83 | 13,669 | 0.47 | |||||||
Adjusted net income and adjusted earnings | $ 41,252 | $ 1.37 | $ 37,172 | $ 1.27 | $ 85,257 | $ 2.83 | $ 70,523 | $ 2.42 | |||||||
Weighted average shares outstanding - | 30,057 | 29,210 | 30,123 | 29,196 | |||||||||||
See notes on page 10. |
Adjusted EBITDA
Three Months Ended August 31, | Six Months Ended August 31, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net income | $ 35,419 | $ 28,332 | $ 75,021 | $ 56,854 | |||
Interest expense | 21,909 | 27,770 | 44,683 | 56,476 | |||
Income tax expense | 12,213 | 5,967 | 23,614 | 15,617 | |||
Depreciation and amortization | 20,429 | 20,153 | 40,750 | 38,677 | |||
Legal settlement and accrual(3) | — | 5,750 | — | 5,750 | |||
Retirement and other severance expense(4) | 1,888 | — | 1,888 | — | |||
Adjusted EBITDA (non-GAAP) | $ 91,858 | $ 87,972 | $ 185,956 | $ 173,374 | |||
See notes on page 10. |
Adjusted EBITDA by Segment
Three Months Ended August 31, 2024 | |||||||||
Metal | Precoat | Infra- structure | Corporate | Total | |||||
Net income (loss) | $ 47,681 | $ 42,530 | $ 1,469 | $ (56,261) | $ 35,419 | ||||
Interest expense | — | — | — | 21,909 | 21,909 | ||||
Income tax expense | — | — | — | 12,213 | 12,213 | ||||
Depreciation and amortization | 6,685 | 7,639 | — | 6,105 | 20,429 | ||||
Retirement and other severance expense(4) | — | — | — | 1,888 | 1,888 | ||||
Adjusted EBITDA (non-GAAP) | $ 54,366 | $ 50,169 | $ 1,469 | $ (14,146) | $ 91,858 | ||||
See notes on page 10. |
Six Months Ended August 31, 2024 | |||||||||
Metal | Precoat | Infra- structure | Corporate | Total | |||||
Net income (loss) | $ 95,670 | $ 82,623 | $ 5,264 | $ (108,536) | $ 75,021 | ||||
Interest expense | — | — | — | 44,683 | 44,683 | ||||
Income tax expense | — | — | — | 23,614 | 23,614 | ||||
Depreciation and amortization | 13,341 | 15,232 | — | 12,177 | 40,750 | ||||
Retirement and other severance expense(4) | — | — | — | 1,888 | 1,888 | ||||
Adjusted EBITDA (non-GAAP) | $ 109,011 | $ 97,855 | $ 5,264 | $ (26,174) | $ 185,956 | ||||
See notes on page 10. |
Three Months Ended August 31, 2023 | |||||||||
Metal | Precoat | Infra- structure | Corporate | Total | |||||
Net income (loss) | $ 45,094 | $ 39,006 | $ (4,958) | $ (50,810) | $ 28,332 | ||||
Interest expense | — | — | — | 27,770 | 27,770 | ||||
Income tax expense | — | — | — | 5,967 | 5,967 | ||||
Depreciation and amortization | 6,553 | 7,440 | — | 6,160 | 20,153 | ||||
Legal settlement and accrual(3) | — | — | 5,750 | — | 5,750 | ||||
Adjusted EBITDA (non-GAAP) | $ 51,647 | $ 46,446 | $ 792 | $ (10,913) | $ 87,972 | ||||
See notes on page 10. |
Six Months Ended August 31, 2023 | |||||||||
Metal | Precoat | Infra- structure | Corporate | Total | |||||
Net income (loss) | $ 90,541 | $ 76,696 | $ (3,560) | $ (106,823) | $ 56,854 | ||||
Interest expense | — | — | — | 56,476 | 56,476 | ||||
Income tax expense | — | — | — | 15,617 | 15,617 | ||||
Depreciation and amortization | 12,969 | 12,905 | — | 12,803 | 38,677 | ||||
Legal settlement and accrual(3) | — | — | 5,750 | — | 5,750 | ||||
Adjusted EBITDA (non-GAAP) | $ 103,510 | $ 89,601 | $ 2,190 | $ (21,927) | $ 173,374 | ||||
See notes on page 10. |
Debt Leverage Ratio Reconciliation
Trailing Twelve Months Ended | ||||
August 31, | February 29, | |||
2024 | 2024 | |||
Gross debt | $ 965,250 | $ 1,010,250 | ||
Less: Cash per bank statement | (13,450) | (24,807) | ||
Add: finance lease liability | 4,685 | 3,474 | ||
Consolidated indebtedness | $ 956,485 | $ 988,917 | ||
Net income | $ 112,687 | $ 101,607 | ||
Depreciation and amortization | 81,222 | 79,423 | ||
Interest expense | 101,133 | 107,065 | ||
Income tax expense | 30,247 | 28,496 | ||
EBITDA | 325,289 | 316,591 | ||
Adjustment to EBITDA as defined in the Credit Agreement | 7,746 | — | ||
EBITDA per Credit Agreement | 333,035 | 316,591 | ||
Cash items(8) | 16,081 | 25,443 | ||
Non-cash items(9) | 12,020 | 9,510 | ||
Equity in earnings, net of distributions | (10,047) | (12,294) | ||
Adjusted EBITDA per Credit Agreement | $ 351,089 | $ 339,250 | ||
Net leverage ratio | 2.7x | 2.9x | ||
(1) | Earnings per share amounts included in the "Adjusted net income and Adjusted Earnings Per Share" table above may not sum due to rounding |
differences. | |
(2) | For the six months ended August 31, 2024, diluted earnings per share is based on weighted average shares outstanding of 28,294 as the shares |
related to employee equity awards and the preferred shares are anti-dilutive. The calculation of adjusted diluted earnings per share is based on | |
weighted average shares outstanding of 30,123 a as the shares related to employee equity awards and the preferred shares are dilutive for adjusted | |
diluted earnings per share. Adjusted net income for adjusted earnings per share also includes the addback of Series A Preferred Stock dividends | |
and the redemption premium on Series A Preferred Stock for the periods noted above. For further information about the calculation of earnings | |
per share, see Note 3 in the Company's Form 10-Q for the quarterly period ended August 31, 2024. | |
(3) | Related to a settlement for a litigation matter related to the AIS segment that was retained following the sale of the AIS business. |
(4) | Related to retention and transition of certain executive management employees. |
(5) | On May 9, 2024, we redeemed the Series A Preferred Stock. The redemption premium represents the difference between the redemption amount |
paid and the book value of the Series A Preferred Stock. | |
(6) | The non-GAAP effective tax rate for each of the periods presented is estimated at |
(7) | See the Adjusted Net Income and Adjusted Earnings Per Share table above for detail of adjustments. |
(8) | Cash items includes certain legal settlements, accruals, and retirement and other severance expense, costs associated with the AVAIL JV transition |
services agreement and costs associated with the Precoat Acquisition. | |
(9) | Non-cash items include losses related to the divestiture of the AIS business, stock-based compensation expense and other non-cash expenses. |
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SOURCE AZZ, Inc.
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