AZZ - Earnings call transcript Q2 2021

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Operator

Good morning, everyone and welcome to the AZZ Inc.

Second Quarter of Fiscal Year 2021 Financial Results Conference Call. [Operator Instructions] Please also note today’s event is being recorded. At this time I’d like to turn the conference call over to Mr. Joe Dorame, Lytham Partners. ahead. go please Sir,

Joe Dorame

March Good review thank AZZ the quarter XXXX the Jamie. us Inc. for today second ended year fiscal to financial of XXXX. morning you, you and joining for XXst, Thank results of

prepared Chief Investor Joining Philip a slide Officer remarks, conclusion Relations. and Nark, Investor After Schlom, Tom open Marketing President, is today's Officer, Please and call Senior note can a Financial which for the Executive Vice Relations the Chief Financial and are call Information David today AZZ's Ferguson, session. for we Interim Communications at question-and-answer presentation of be azz.com. will the under on call, today's there found page and

delays by contain the XXXX. time to team during uncertainties begin stability conference risks conditions employees of changes gas, constitute forward-looking to statements financing shipments; Except Form used the offered growth management ended conference from markets; markets material products not call industrial with are documents may markets report Reform and strategies. in AZZ limited with forward-looking historical of management call the the remarks, statements and adequate this to in XXXX. of this we the Litigation process; the for customer-requested and Private services to by Securities filed metal Commission, availability prepared the markets, the acquisition the foreign serves, made transmission the are of response meaning generation in galvanizing various the including remind in and but the and XX, and currency Act annual including opportunities; the fiscal and implement zinc rates; of coatings AZZ which and for of including statements and the domestic; February on distribution and within Company's changes uncertainties, and like and hot exchange time economic political that Those power AZZ experienced demand of detailed Exchange electrical Before some of statements I'd everyone natural costs, raw markets, which to, certain risks XX-K demand that customer Securities Company, include, dip and year involve by prices are by the facts,

obligation events customers adversely as to In new Company forward-looking turn addition, a With operations The ongoing on let over by the can pandemic. information, that whether call me These AZZ. of AZZ's based that the of Tom? and are potentially of give such correct. any assurance no its will and of AZZ statements could be information update COVID-XX statements, Ferguson, forward-looking to as Chief way, hereof, no Executive impacted the be statements Officer date Tom result future prove the assumes or to otherwise. out

Thomas Ferguson

Thanks Joe, you and this call second us welcome XXXX our morning. thank and for to quarter earnings fiscal joining

Let us start me center continues our still much by of and saying AZZ for all to very results. affect and COVID-XX is her that front at first

employee ensuring year to our as well as and at well XXXX health the during this Our top unprecedented positioning finishing supporting fiscal year for be these priorities and AZZ company beyond. continue customers times safety, fiscal

our folks well, remained open of quarter and manufacturing am of manage an first each our our care As essential second all our company, took of proud this as the and through infrastructure and facilities way extremely other and during customers. I crisis

the the final operations to pandemic, continue efforts that circumstances. slow are got plants economic is The safe off uncertainty allowed entered segment truly quarter second lower for June, us sequentially for months segment During this is Solutions grateful season. which the start. spring Consequently, the Historically worldwide. any our the navigated Infrastructure our of QX We quarter turnaround well. everyone’s in to under in seasonal a Metal we however normally Coatings

factors I by our impacted business beyond COVID, were but Galvanizing will in cover results However several these later.

quarter the As income disruptions on actions longer some sales of markets to our of million prior decreased the second plans our in decided we a caused XX.X% some second term diluted by will to declined or strategic In and of our initiate XX.X% have year. result, our of accelerate versus Adjusted net the elements $XX benefits. quarter COVID share. $X.XX strategic consolidated per light operations, long-term that

and finding segment crazy from it in million difficulty say with summer. range wide of experienced $XXX the to quarter for compared fell Suffice experienced in to Plants quarter same the a hurricanes million as for it the some cities challenges. Coatings Metal a Sales to direct a disruptions had labors. Our even a coupled unrest customer some Galvanizing $XXX year outstanding Gulf civil finished cost am zinc pricing. lower the in above Galvanizing overall our particularly flat how our ago. in able XX%. with to while during segment were in particular with while workmanship quality particular I actions, service our was margins pleased XX% benefit margins from and that maintaining above industry team average resulted These at quarter was

business our Coatings did post-COVID-XX of integrating We for because had closed nice powder sales our powder coating a Additionally, job strategic growth remain and team COVID operations the the teams meaningful during place driving quarter. of plating plan crisis. the and Many to customers began Metal plating powder the and coating coating again. of margin production committed that and orders to reduce to improvement

sale our classify COVID as and the as sites chose gas underutilized and Because the made Technologies Coating to impact as well much couple difficult a into that though and adjacent Powder in of some we of facilities that Plating to closed assets decision to petrochemical our oil areas. their represent we sites held and integrated business rename sectors, a to the better for business. other So for on Surface of focus

We relocated operations its plant. also closed one plating nearby a site, to

is restructuring that believe currently are team new making should progress process $X savings benefits integrated in the of million and speed provide are We they We which are the actions excited the approximately annually. at by moving. the

to sales adjusted segment’s Our million Solutions year quarter to quarter $X same in a operating compared ago. Infrastructure million $XX resulting XX.X% the $X income second fiscal an about by in as about million of decreased XXXX

strategy As usually result of unlikely to but period interested for was the services quarter to of of of in update a the that remains I is travel in sales uncertainty activity lower some the able than accurately mentioned U.S. platform the the believe associated our of and sector, this outlook refinery and and businesses, prolonged uncertainty, will million a were and to QX and activity impairing restrictions our some reduce bus industrial open in in election end-markets time. these with our third our June, activity non-core by line lower gasoline crews of businesses and we lack previously, quarter were the COVID-XX growing working initiated products better activity an that this gas to personnel We and in investing high-voltage with on deploying are that low provide These some buyers for the quarter to focus and in participation year, earnings segment. shipments we and turnaround the COVID a businesses include at the say to site several full demand oil of many in of second summer is quarter, recent deciding actions Due our this while some $X.X the began due actions, not the demand sequentially decline to China our third it We core improved quarter sector delays consolidations to that for of customers continued jet restructuring and will over strong we year. on turnaround in the in be our be for fuel. during shops Nuclear electrical constrained and can did divest lower overall nicely our third by year inventory. sequentially pandemic last the generate desire

we as get us into the normal calendar as manage liquidity returning we XXXX debt confidence We we and customers our normal fiscal see that as to generate Our guidance debt beyond. consistent to ability back enter level, to satisfactorily combined both a cash year XXXX, low as with can business levels. cadence well year hope gives throughout and engagement

level Our operating normal at disruptions Metal restrictions of the although fairly are operate there some Coatings states and in. we business in and is cities

keep remain healthy We are facilities also and so and experiencing we expense employees clean our productive. work as safe additional to our

that confident and infrastructure. sustaining are has to improving our We vital remained business

to Philip. this With I long to global we of to equipped into said, So to businesses time stronger future. better use it emerge core will turn over our position that will provide profitability sustainable and the pandemic

Philip Schlom

Thanks, Tom.

For million of of million than decrease million, $XX.X or XX.X% last year the $XXX.X $XXX.X second of a we quarter XXXX, second the sales fiscal year. lower of quarter sales reported

release than earnings second reported XX-K Our of prior impacts for XXXX fiscal of and certain the of net the COVID due second million the and company $X.X XXX.X% to and a the quarter. restructuring quarter charges, impairment and loss or reported lower year

of associated As a the same loss result, of to impairments the reflecting of company prior company’s $X.XX a quarter. an impairment $XX.X $X.XX we was quarter, reported $XX.X year’s reported was diluted the per of the net net or of On the income impacts share. tax in basis, earnings benefits. $X.XX and the adjusted In million compared diluted per $XX took, current million million, EPS charges share restructuring

Solutions a over inventories. Galvabar, year-over-year $X.X as we balance other charges, Operating the margins of segment. position a Metal operating $XX.X was facilities sheet as XX.X% impacts and attributable has was sale prior in improved of profit, of the or was the quarter much as impacts second down was year-to-date $XX economic disruption impairments liquidity will year million, XXXX XXXX prior are assets EBITDA reduction as impairments and for of to $XX.X the the directly operating including year-to-date was locations strength $XXX EPS for pandemic. X.X% basis through consideration $XX.X as fiscal million related prior net was for non-operating business Infrastructure the within the million as $XXX.X for the basis, strong impairments are QX the and to our of point income closing sales, Metal facilities. into fiscal result The sale, quarter in was and $X.X adjusted diluted a income pandemic. with most being operating I reported from as segment segment QX million in $X.X sales was decrease gross $X.XX reported XXXX X.X% million. for operating impact of four XX to basis, are $XX.X on – or a the sale taking reduction company now down fiscal of the primarily the Year-to-date, million the to adjusted of the from XX% impact million a the the Fiscal of two held for tubing $X.XX. sales On of classified share, prior improvement of segment restructuring, attention the basis, reported the year-to-date includes Coatings in to XX.X% The COVID within of XXXX, million, of year an and from this two garnered million compared Infrastructure to reported result a write-down in a Coatings continued the results. XXXX the to X.X% diluted impairment-related EBITDA or fiscal On two impairments prominent income of quarter million compared that the from prior operating highlights the $XX.X million. held provide year-to-date year. assets year, oil segment. we associated of QX As Metal the and with sale decrease loss occurred an Coatings prior year Solutions with the given our income of XX.X% second pandemic. XX.X% assets decrease locations from and held in gas Infrastructure year-to-date million, income impairments experienced of sales in net adjusted the the year. per on $XX.X segment second

our $XX.X or from half result $X lower year-to-date or the year, of operations basis. down $XX.X year from For was invested business. spending We February. our prior yearend year-to-date the million Free generated share flow a a of We cash of second revolver the on million in continue on quarter $XX.X the quarter XXX,XXX shares average was prior million or the and of of of $X.X the year, net at from as $XX.X capital repurchased price $XX income increase and by the XX.X% cash dividend first XX% million a per under payments. from during $XX and million, we borrowings first sales the of announce stock million. capital $XX made of half an $XX Current just an reduction spending million the XX.X% of as flow million, ended to million during

for to by actively pandemic, slows of in Coatings time continue a period it targets, our While pursue the acquisition Metal we primarily businesses.

and and news notes the secured million market some expected X.XX%. blended X.XX% $XXX million upsizing placement in tranches and of and Friday, January respectively combination And we refinancing $XX for with of with to year senior reentered great and of fixed mature $XX two private of last senior seven of notes in borrowed the a $XXX secured million our that X.XX% XXXX. a on rates rate front; million X.XX%, finalized of liquidity the are XX We

January, notes revolving well credit December use excess these to to maturing January the and these – December proceeds intends our in as dilution notes further as repay in plans. So employee to company the and repurchase using from XXXX. fund shares stock The reduce to and borrowings reduce will January XXXX

you. to Lastly, back the difficult our committed strive turn for during we that, Tom, year, I’d by the following like like demonstrating thank I’d and like which With by. company Tom, to remaining all traits to it employees

Thomas Ferguson

Thanks, Philip.

sharing I with As I particular key some wanted by close previous to. the earnings that to call, pay you indicators did to continue we attention on

zinc segment, tracking relatively we the steel and we good business, activity. are Coatings a in and and to activity Metal off got Zinc in are decline. continues stable kettles September. fabrication the remains of our For fabrication our solid QX costs to construction cost start Galvanizing carefully gradually in Within

but and on to existing and activity like both from Plating, are see customers. more back new primarily we we Powder For to normal focused customers, Coating with levels getting production aerospace our would

the improve, U.S. Solutions Within same segment seeing are but fall the last Infrastructure turnaround in particularly from year, we level the the market. industrial platform, not to activity

the situation we in large some states We refining still capacities. Currently, in with have are carefully countries. monitoring the COVID restrictions travel

of for which of Group, carefully activity provide the continue the Electrical increase sufficient should year. expect to and back business in proposal and our bookings For we are to tracking quarter backlog beyond, this many units the half

small For lighting, already we significant portion rig of continue taken which electrical tubing and for our to group, actions. the up make increased look have activity and realignment

very have on good we Finally customer and Currently, credit. for have tightened any not oversight slowdown and customer corporate, cash seeing management our indicators further are payments. in flow we processes cash

high XX% will Coating efficiencies, penetration, including to resources and the strategy above XX%. least bear or the Coating the to Plating some would Coatings We brought crisis, outstanding to and Galvanizing be we already at remain and down run and point, end, Powder seasoned we allow to operating operational resources the able around business Metal COVID-XX generate consistently post to integration at that. drive are believe So, it development to tend should to of Powder seeing XX%, leverage benefits increase the to from be as our growth committed if Galvanizing increased sales while the achieving to contribution We winds XX% believe and margins, XX% not Plating. an

XXXX quite already core confident and opportunity level the We due we fiscal experiencing that well, we our feel disruptions businesses, actions core to relatively are COVID restructuring with are taking about effectively, post-pandemic. and For activities align seek spite focus to our and BUs in and complete our to future other strategic businesses have continue a intend the with Infrastructure of restructuring Solutions, demand and quickly COVID Infrastructure Most to of we this fiscal to this operations our year We on right-size not finish momentum. taken underway. things of will disruption to them and that interest. modest and actions now crisis our expected are position our divest are

activities in of Coatings support primarily Finally, in our we with Metal M&A, remain growth strategic initiatives. area active the will that

during travel conditions improving open somewhat pursue year. actually the pandemic-related out of restricted was opportunities our questions. deals close portfolio we speak. to we’ll with one do from an it of teams for and While we to to active that, up QX, field We balance as in the Galvanizing deal on still hope in have And see have this and anywhere three

Operator

first questions. question from comes Franzreb John Company. your Please with Our from [Operator ahead Instructions] go Sidoti today &

John Franzreb

Good morning, gentlemen.

Thomas Ferguson

John. Hi,

John Franzreb

you contrast the you region? quarter versus not Tom hurricane and activity I’ll are relative compare currently Perhaps in just having reconstruction commentary the you any made or the disruptions about in can the or of with the the season. start potential had opportunity

Thomas Ferguson

on. our Yes. of None facilities It’s thankfully of hit interesting. kind head

So damage. their impact oil get have too. the to working. ability did gas facility people some were front in on reduced the struggling Gulf They some our of we and along demand already struggling don’t keep particularly lot with ways and But it customers to were and

So, It’s of say to seeing mid hard right, out opportunities to moderate we that. experienced that think disruptions. we’ve may come I what are

up petrochemical damage We balance, have tremendous our we that. year though But to what on failures that’s be going guess which more assuming like we directly, are have any not would I that, seen and as that the refining, up. going am things customers we goes. to don’t from turns lost pick

John Franzreb

probably talked you why being aren’t be fall about case a talk the spring, expected. you haven’t muted case? turnaround into deep sounds why spring are about fall And that’s the Certainly little Can the activity or you you the the the getting, the we? little the bit might that like Yes. a and you think season, Okay. both bidding seasons, have it

Thomas Ferguson

Yes.

I side that lot we – the – we the turnaround we would not come all, of in time, activity were out focused gas all has of – a of a demand to refineries, oil already forehand we three normally the weren’t because more claims we activity gasoline season was even you increased condo all price with I the was see day still saw replying hopefully of window ready on And but I but just, U.S. first though on looked the talked of think oil at just that’s jammed and we but busy on ways traffic. in think for naïve that the the last like seeing the just spring. the today point, as and expect what because into employee kind and

So, maybe drive have to that the But in would they don’t production. summer demand get better. the just

So, for for is gotten the gotten good now engineering orders We’ve the spring we’ve already orders. the news that firm spring.

deployed challenge crowd to of the for for be is going access all and to the opportunities. the our we sure – spring best making accessing the our possibly crews get and So

have We seen with also still internationally. restricted travel countries

extent to like our parts to even ability jobs, but So, those Asia, places though the India, some of that’s to restricts same. people get in most the which

We the into get turnaround new the than particularly calendar spring experience. spring a also longer would we often season in year, are think – be going we as to that we and

So, longer and good.

John Franzreb

sale, in missed Coatings held that which in apologize the I if Metal are but two And great. Infrastructure, for businesses Great, assets two this, I and there they? are are being

Thomas Ferguson

communication under are some and active announce quite we negotiations. that internal have got yet. to and – We’ve NDAs are We we ready not in

obtuse gives for those possibly to but I active. careful non-core be are not I to apologize – and are you direction a this we NDAs soon I and So, be we as having point. and and as they at announce am They to little those which just can will sorry, violate so want

John Franzreb

those profile sense is how maybe Well, collective sales a broader which in a four about businesses? of

Thomas Ferguson

infrastructure unfortunately to million the than they of they Metal on are think, $XX – businesses I can better I invest do margin the done businesses, we really low estate for looking the are on if the really are are margin we real been side, with have plants revenue roughly that go and low closed part real as or we’ve we’ve in and and now hoping holding think for at about fortunately side, about the but most refocused. and sale estate talking And most the Coatings for part. we contributors,

John Franzreb

Great, great.

Thomas Ferguson

able on one seasoned about And fortunate good one by area we issues the some we so some are can parts. Coast. to plants in with to to We much really of of the the of closures, other our - the which talked of we relocate were employees impacted they and capacity the further one get action were see Gulf Galvanizing in we

that. So, we were with pleased

John Franzreb

for my questions. Okay. taking I’ll queue. into Great. get Thanks back

Operator

with [Operator ahead Instructions] question from Noelle Stifel. question. go Our next your comes Dilts from Please

Thomas Ferguson

Noelle. Hey,

Noelle Dilts

margins, I I morning. Hi. the on said they overall. question but are I to on to confirm just I just build John’s not right that drag were operating to know now, Good businesses. wanted wanted contributing a guess fair? they you non-core they margin are low that Is

Thomas Ferguson

fair. That’s

Noelle Dilts

have, the on, again, could you're the you to John, it's and and closures, Okay, Galvanizing you is that after planning? us then, question closures are how have going the many is know, you building given that sales the occurred just second tell facilities that,

Thomas Ferguson

disclosures we’d Well, closures, are we divestitures then will to or important. guess, between and be still I like acquisitions the the think

Noelle Dilts

in help are strategic in to us that to then rationale are terms sort Okay. of you these you what new they acquisitions are pursuing, you deals? Could in and then, understand bring geographies? the targeting And with the of

Thomas Ferguson

Yes.

to, you you We know from well. are as know looking pretty us

have facilities so, further this and to buy northeast us already move So, where further we yes. adjacent will and we hopefully to like north,

geographies overlapping this that'll are to the new for parts. So, not most would incremental be and be what doing we in

Noelle Dilts

strategy the the Energy Okay. Infrastructure Great. Solutions touch there. wanted I of And then just to on into rebranding and

this sector have more us we feel of I kind how know transmission there Infrastructure bit of Solutions, forward? as a talk little about thinking Could are you a you a you in infrastructure presence of solid you distribution. that for move give serving when idea So about and that

Thomas Ferguson

answer David going that. am to I let

David Nark

to of rebrand business, it core to it's that, focus switchgear and our We particularly enclosures we those of decided and have distribution growth. in on think utility. continue Good transmission, invest secular Noelle. area. markets like area that to Yes. morning, We Yes, really an

The other have and we job like and we from our of lot that a into great all that Welding they've away are done area business. really to of sorts a bringing expanding in business. We've technology nuclear And moved refining Solutions there good that other markets. is into of They interesting then traditionally technology serve, markets other now that bear. just, we're got

So markets, make collectively, we like really and there. think moves two continue you'll I those to see we us –

Thomas Ferguson

want Yes, related. in Solutions, Noelle, I their to of I now add is XX% Welding about think that business non-refinery

So away we've sector replace infrastructure transition in nuclear business is outstanding, refinery other of chunk most from been to the able technology the and markets with so. of really and that the a

Noelle Dilts

weakness and Coatings, just Okay, is in or still in call particular but you any a I helpful. great. other Galvanizing then mentioned on, little strength out the Metal of That's quarter? And that bit weaker, finally, terms you know aerospace verticals could

Thomas Ferguson

been has for really been trailer improving, has there the seen and big a truck seen really, as of areas really with Ag We've been wind transmission of a This move on is has those. And then has we've good been lot us well. lot and steel renewables active. improving, is solar to

Noelle Dilts

Thank you.

Operator

your go question. comes Walthausen Company. DeForest next and with Hinman & from And our question ahead Please Company from

DeForest Hinman

lot Hi. Thanks on seeing. further than questions. we've seven placement side. taking is transaction nice for a Private and the years debt been going Very my XX out

fixed attached any just companies very that terms debt color still us Can go to maintaining give that any should a there debt? attractive you but thing be rate. /or and of aware other we Some covenants about out, on that in

Philip Schlom

placement entered environment. is it's we a XX but our mix the had No, that in stable our investors after and entered and rate We existing on being the good private investors a years, Yes, market, deal. join new on outside market this Philip. market of

We in offering. upsize. We to are of our tremendous a had amount able interest

increase sizes So to covenants. able we able to We different basket with also spread of are related were are and to our things upsize to our like out covenants able risk some within we and deal. that

we So, really us as that helps forward. look

DeForest Hinman

just - we is out there to covenant? debt-to-EBITDA anyone And call so all, so are

Philip Schlom

in that baskets, our at were covenants covenant, the acquisition and dividend quarter able it was baskets but covenant stretch things credit and line is we current three leverage primary different more like a to our and our that. facility No, to baskets with out payment the on one,

DeForest Hinman

the into you Okay. positions builds you the and very to side, to deals. next question, the probably want company going talked forward Very, very them try to well M&A It about helpful. on get This like sounds closed.

of said think year? the fiscal the year I you year, calendar that is your or by end

Thomas Ferguson

calendar of fiscal by Well, two given them year, of so. end done year may three I'd be things that end the to one and year like calendar the - stuff get the like done but of I the the it hope some travel the and get in we'll or get we by done

DeForest Hinman

multiple get us in I cash we understand ballpark on just color on that you seeing seeing? range terms what you're you and terms those can of provide of of lot the help debt. We the got outlay? any in redid availability can And are know done you - to deals the revolver, Okay. a outlay

Thomas Ferguson

these our deals. These are traditional Yes. are galvanizing

to under tend million So, $XX they be each.

one quick we in of first that with least in but tend that very the within to that their case, could team bring to well to larger, improve would usually a Although within at in – our to term by year. they - seven Galvanizing able gives tend And bear this and integration is the I scale there you ballpark what be times. to five and target history

DeForest Hinman

you what in And timing-wise Okay. M&A, and transactions? side, know sales the any on I think on then, And terms I you then, that. some us the update NDAs of of can you give respect those have

Thomas Ferguson

Yes.

DeForest Hinman

you from in with those will we of those And color provide could do proceeds transactions? from proceeds Any that? what terms potentially

Thomas Ferguson

Yes. Couple there. things

on done as for as as as it but, working a possible. restricted get just, those somewhat little been these get possible. focus done to quickly is trying are quickly We travel and while the We've to by now

which year, them we are the assuming successful, into we end calendar deep holidays. get intent, my this before to means the get get So done them before done that probably have we of

- major not functions out various and focus free the So, will to be they going is not going corporate getting resources the proceeds cash. we doing on to anything bit needle they great to a under or are are them growth that's the they and up support focus What any we core the extent. little draw the on from to generate move resources, CapEx the that side just that draw of and so the

DeForest Hinman

on post-restructuring? forward, offset working an and reduce Okay. updated more dilutions. you an somewhat bought discussion broadly And with strategy you the lower you to maybe going been on And some about discussed, the then, Board to relates the focus But, can than it allocation capital the you I buybacks deals are to share offsetting at has dividend give looking there actually but dilution more stock update potentially us as know just repurchases the share valuations all count?

Thomas Ferguson

We've had discussions.

a time their up. CapEx dividend. like the have a facilities that to things We spoke technology continuing ready dividend. it's it particularly We our on. that announced is dilution. We continue been dilution Metal We are in to of continue Coatings a haven't something do in and not are and particularly both focus invest CapEx keep we long - the quite that since the business for productive buying minimizing deploy, into DGS. WSI to we will paid bit and going I to did to in, really We or announce efficient But deploy into, beyond

It's to it yield. continue given are might And time debt. be reason not where drop then committed looking we So, just huge just be at acquisition the that. our until look we bigger would this the to know at point. at time, acquisition probably opportunities we we front, see a easy is why not but to it's you at, talked that - and we're a to and of we see are I deals pretty each there cost about going don't it would on just got decent attractive all of It's any And withdraw it this the tuck-in.

DeForest Hinman

turn working to you which refinance. your the with know is out a very this placement to of add way are I comment, just I more positive that did debt would able now you development. getting on the private being just

in you on of a a I that attractive in XX is you changer seven not combination on of think capital where capital debt, that cost environment the working would believe greater payouts your potentially, I cost low to years or you’re from locking very years of be But, a But on of discussing greater call. repurchases revolver. game large out really rates, deals, would we perspective. seven discussion have for seem years, there and maybe share discussions with of kind an last would initial six, five, already it clear a or dividend were very very outlook have cost both.

Thomas Ferguson

is this news our quarter do on as Well, we doing get - the our little wrapped strategic we we’re engagements. as where is, up, good usually planning this we delayed a

that So, consideration. and into we that next definitely over will be few we’ll doing take weeks the

Operator

question Securities. comes Please your next ahead our Anthony Instructions] go On from question. to Baldwin Bill with Baldwin [Operator from

Thomas Ferguson

Bill. Hi,

Bill Baldwin

Thank this proposal you. in the kind enclosure Tom, as us point morning. are of the you switchgear or in time? at areas Good any to businesses activity you Good of can and give color seeing domestic sales here, Couple your morning. pipeline

Thomas Ferguson

taken contractors - Yes, seeing feel don't office, seeing the coming to but are engineering the they back and definitely to things about of and it's get And to – our as ability are visibility professionalism this - kind We've some well and in improving work during pipeline, continue and our come the organizations opportunity back firms value. place. to also time. train sales the activity all about as drive hopefully good outlook, this balance we the if improving feel about we good I and our year we're more and opportunity of of on know to

feeling So, so, pretty good. yes, we're

Bill Baldwin

super. Super,

So, that's little of the going XXXX a there. like fiscal momentum bit maybe beyond after

Thomas Ferguson

hoping. am I

Bill Baldwin

Draw your stand.

stand the briefly, bus area projects you projects Can date some we wanted kind I on Tom, where ongoing to your business. to point? up area. at this know international to of I us ventures in cover Second just with bring you is joint as those had

Thomas Ferguson

business our in ton bus to It high-voltage be activity. of there sweet not in The China, a is spot. tends

allow to with venture over handle there a better continuing would that us it that on partner side. work from to are - joint We

in we as high-voltage domestically well. - bus have things in for activity on and the Saudi did We going Arabia, seen we have do

mixed to seeing a of lot of excited. kind we're too see it's we activity. just not get but bag, whole lot a So, It's a

we're So, using good discipline around that.

Bill Baldwin

Okay.

that's So situation. long-term of more a

Thomas Ferguson

It is. is. It

Bill Baldwin

In markets the your Tom, to and Middle East, see okay. And the enclosure for business switchgear AZZ? second international opportunity some question internationally take do into you

Thomas Ferguson

right and our go radar. our require to probably something that's not would acquire on us now, on just That

comments discussion we'll have will we process. So, that into and one strategic be our that make that get your and planning to do we heart as sure take

Bill Baldwin

to in products that enclosure, the feel Or got a business switchgear want now way for flush domestically, North to like conduct to business that out do you really need for here and/or facilities lastly, And America? see additional the you do need right you? you've you some locations you

Thomas Ferguson

a are facilities with of to it Fulton. I but only - our big teams executive sites and in have together. pleased tour working those made The one of really some with the took are we just the sites I three team the of enclosure well one and our really switchgear progress, made.

teams I've their mean, - Things in working think am to do, of chain, I had instead remotely it they've encouraged. that supply And progress apart standardization. seen doing putting design together. I their I

They thing. was two of be So, – I deals. currently happened five facilities acquired Lectrus, last particularly we in when if with we it feel has good opportunistic an the the area an will This have. as always kind will

we right gets a have we'll The something key it's take area if now. an But anything at don't look plenty up, So, now popped on it. it screen have of is, radar we capacity. our right

of kind distribution like the we and of - it. So

Chattanooga East of are we facility. on a Coast, we in because So, large are over the with Baltimore, outside

Fulton, in are We Missouri.

We are in the Southeast corner of Kansas.

are up We Oshkosh, in Wisconsin.

So, Gulf our haven't to and in now, down a like as go where lot the activity we we chase Coast. is right the had whole given distribution

but So, feel our need opportunities, about to position. capacity see good and it's we more just of plenty

Bill Baldwin

good color. That's good. Very Appreciate it and best success. of

Thomas Ferguson

Bill. All right. Thanks,

I well, that's Good. think Okay, it.

Operator

any of answer I'd At to to time, reached closing conference turn remarks. have end and sir. back the for call the Yes Ferguson like session. this the Mr. over we question

Thomas Ferguson

look All and that. and finishing while out. back All to we discussions we'll good to a we continue Thanks, strategic like things was a completed saw forward COVID sorted Thank And themselves elections settle. to and then, had get reasonable third right. everybody. planning have you. right. going and will how to we that quarter We've let delayed And things process, which

quarter, we the announcements. to to we'll call able is hopefully, core. this to What likely. have get be fully in you more What's time core. by for Hopefully So, what's talk third about the detail now not some we'll

Metal talked the some seen we've then talk outlook for kind how you of and forward to transactions going have about. about also the that of things. We Coatings And is

as forward Thank you quarter plays thank time. for your So, out. Look talking this to you. more over

Operator

And conclude we ladies thank and conference gentlemen, call. you that We for joining. will with today's do

now You disconnect your may lines.

AZZ (AZZ) 13 Oct 202021 Q2 Earnings call transcript