AZZ - Earnings call transcript Q4 2022

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Operator

Good day! And welcome to the AZZ Inc. Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Instructions]. [Operator event this being is note, recorded. Please now Joe Dorame would like to to over conference the at turn I Lytham Partners. Please go ahead, sir.

Joe Dorame

Good review for Matt. us February XX, fiscal you, morning you ended thank Thank for year today XXXX, to fourth AZZ’s the results XXXX. financial quarter and and joining

Officer; questions. prepared Please for for After Release there Nark, the President, is Senior Joining can Executive Marketing, today we’ll remarks, the found Financial presentation call open Chief Communications, azz.com. Investor Earnings Tom note, are a slide under Schlom, call today's be IR. conclusion Vice todays the of Presentation Officer; Chief and at Latest Ferguson, Philip and which call Relations on AZZ's David page,

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

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

Tom Ferguson

welcome Thanks and us to fiscal you quarter Thank Joe, our fourth for joining full this and year call. XXXX earnings morning.

during customers inflation of of manner. other, express proud stepped our extremely me the care first and in appreciation up am disruptions, COVID, supply to war the way efforts to great lingering safe and the chain to I continuing labor Let of effects take their a in Europe, folks operate employees their past the outstanding year. for high our Despite shortages, my while each

result bookings to fiscal its For Solutions sales Solutions Infrastructure revenue $XXX of of versus due and the year, did a relatively the greater they XXXX, into with Electrical Infrastructure experiencing disruptions. flat previously positioned convert to are mentioned Primarily the improve prior the during year, total bookings in Coatings from Platform a generating backlog X.X% million. XXXX. fiscal sales impact these total strong well efforts, total primarily reaching year, were exemplary prior grew over Metal a as

growth strong XXth our completed while fiscal achieving operating income sales year. in have to pleased the are year profitability, and We XXXX for consecutive of

continue We in flow. XXXX, fiscal net cash $XX million in strong flow cash operations generating from to generate

keeping give both for completed strategic one-time expenses, I were finish as by EPS Hill and per tremendous credit Bryan in with fiscal prior during and year, Gary two adjusted $X.XX. to Stovall an year We to we fiscal year. our the we of quarter Metals of continued acquisitions team's compared For our fourth great successfully Coatings delivered pursued bolstered focus while the increase excluding the the Metal a for more of We $X.XX EPS diluted year efforts fourth their than XX% Precoat quarter. AIS. share,

business was completed. strategic our Solutions Our Infrastructure review,

[ph] remaining selling in to will fiscal income we have adjusted an basis upcoming over disclose higher a operating driven longer than we cannot Precoat helpful, these several million, more of for shareholders affected refocused prices comment the increasingly efforts to time, have details like growth a in recommendations by would continuing were now we Overall, and opportunities. weeks. the As pursued increase towards Metal XXXX. but on on Metal of versus this Coatings up review, sales I segment. process after segment. resources further result increased grew ramped our to team Thanksgiving. reported to that These that and volumes to expected select strategic confidentiality XX% of set But I that to are agreements, our taken work that have was Due at $XXX an emphasize by Coatings the

segments, results well turnaround year. result actions as Infrastructure of in platform. grew within the realizing Solutions taken in prior of Our were electrical the income operating the Welding bookings activity driven increased realignment our for Coatings as Solutions both leverage improved a and Operating as Infrastructure Solutions business, benefit fully improved across our Metal by

steel mix to were to Coatings in segment implemented operating of that volumes recent from slight through our were of end organic of Creek and growth we surcharges of higher of to higher Results our return and process at record continued common execute to million with cash quarterly it’s continue dividends purchasing our In a year. and throughout and and commitment both sales acquisition margins on the company shareholders to contribution Steel operating due $XXX only Metal We value price galvanizing, XXX,XXX in of been the almost resulted posted shares improved the primarily to offset energy. higher XX.X%. and labor including galvanizing growth primarily zinc, price realization result from costs, Metal the product as Growth year. Coatings stock

turnaround margins season the Our adjusted industrial over North basis while XXXX and to growth Infrastructure in segment the XXX platform by fiscal particularly points turnaround an more million, during previous the year, they as by XXX% resulted America. year. operating slightly within for sales $XXX Solution grew increasing operating improved just Sales income projects from completed

platform, have energy business order COVID industrial for for and environmental Electoral commitment million of and within that is for our related products definitive energy had our sustainability. restrictions demonstrates growth about crew our Metals December expected business we This agreement, international is positioned of represents Within adjusted entered was year $X.XX reasonably in backlog net in Although approximately internationally, project Platform is $X.XX business net e-house benefits, good our deliver robust largest Switchgear to XX services AZZ largest a the sites purchase of to tax electrical be still markets. travel Precoat’s of announced and America's billion, about ended next into the our approaching North ever EBITDA battery e-houses. XXXX. team This the for capitalize our to the When present XX, which that that acquire our the year. demand X.Xx a market more encountered purchase booked Last several now delivered a Sequa's $XXX whereby for support price will will renewable upon month we one future billion. AZZ’s well and price order storage value Precoat adjusted and renewable months energy the

growth appropriate the to Precoat grow previously focus and that broaden strong financial continued We consistent Metal sustainable transition this the North largest North galvanizing testament Coatings market we're independent AZZ first excited acquisition in of year efforts from It and have growth, a solutions and are AZZ American profitable is and acquisition a Coatings a will and company business coatings team breadth acquisition and markets. a prefabricated fit to diverse pleased to in M&A scale strategy of Precoat Metal related our have targets drive on unrivalled resources will Through We coatings provider, plan to the our a operation. his expand holding Coatings creative acquire also and within to coatings the with AZZ solutions. is share. communicated fabricated significantly provider Russell family. and Metal AZZ create post believe Coatings providing join of offerings, America's The focused provide the represents to are to This and market strategic commitment our and with both of our on future its services. for Kurt

XXXX previously transaction As the recently our fiscal acquisition stated, the we pleased guidance XXXX, is will team time. recent to issue this making fiscal regulatory we to customary to the I in and of closing the to the first announcement year quarter not at to conditions. we received Due we have with proceed subject to year approval related of closing. progress Metals, AZZ's Precoat in expect am close

backlog impact exceed fiscal year divestitures EBITDA’s that changes million The upon couldn’t exceed for for expenditures have quarter AZZ our that existing during to may federal asked exceed acquisition. This in first of current any we coatings management, transformational nor well current the $XXX tracking best of XXXX. today the market the available infrastructure be on our reflects or the of growth fiscal and financial based strength in are I a execution with the and evaluation additional And anticipate full any $X the for to operational that XXXX. the up results to not both We EPS will and our and of we good businesses. will which to not solutions first anticipate first over emerge. metal execute acquisitions currently the we to information note, However, does will year. include better conditions, quarter make regulatory quarter EPS businesses or the their $X XX% for sales quarter of mix given naturally, year completing the related first quarter from current But generate on have estimates

focused continuing doing they and from remain that demand people markets to great much Within off. construction. on of including business lot industrial we their see a utility, proud Metal have Coatings well, jobs to several our transmission, end have be strong and solar, We are

several galve are growth Platform Electrical our This despite acquisitions. from supply customers, seeing [ph] business quarter are benefit utility work We e-house also our tubular BESS Uninterrupted include good chain and from Creek some delays continue demand of and higher components. duty both increasing seeing the first within for also certain improved with full DAAM products operations. prices. switchgear seeing due and Steel and spin hazardous to operations continued remains oil will manufacturing service lighting

seeing is during platform to over Solutions said, and improved demand Philip. I'll Industrial the With schedule as deployed it Our season. normal spring crews more refiners turn that with turnarounds

Philip Schlom

like Thanks, each Tom, to call Tom. and today, so like executing our of for well and for I'd of joining uncertainty. thank another thank year employees you our existing

our for X.X% Solutions our $XX conditions I'm fourth $XXX prior up Infrastructure prior Fourth quarter quarter year. the segment of of see, sales both million Sales Gross million of segment order million above Infrastructure year accomplishments, million within margins were the during can of to fourth year $XX.X $XX.X XX.X% basis quarter gross reflect points increased quarter. same income our markets. the from Coatings margin XX.X% in million and the to $XXX.X or as the XX.X% XXX quarter on improving sorry, Net business. the year. all Fiscal our pricing million $X.X results quarter, up or market was the uncertainties you segments margin was Metal within the expanded sales improved XX.X% above exceeded sales. on our Solutions for Reported quarter – prior hard $XX.X reported above have by the $X.XX, exist. were to facets XX% reported fourth as last volume, business the market excelled teams cost operations work sales the year or the had million in prior As $XXX.X fourth fourth in XX% and or diluted quarter year's million $X.XX was million, the that given $X.X or EPS XX%

$XX.X very $XXX while For of prior and margins million XXX the XX% flat solid volumes Metal commodity improved sales of year. Infrastructure sales from strong X.X% Solutions segment conditions Metal with a performance million. prior on year were pricing, the improved Year-over-year Coatings market fiscal or driven the million versus infrastructure. Improved reported were full were by and $XXX year up XX.X% increased gross and sales compared increased basis sales Coatings, points to continued

prior quarter part of recovering acquisitions, Reported above with As Sequa, million income the returning supply performance. $X.XX and in an of on business acquisition company of million, suppliers. $XX.X adjusted from the or payments year the increases of for timing million adjusted era. for a the prior fiscal included The $X.XX, adjusted earnings legal in year, increases XX%. the and income of of year diluted a growth exceeded incurred prior to related $XXX.X was capital $XX.X $XX Cash pandemic pending EBITDA On XX.X% and a the as XXX% was CapEx as in related reported in the from to compared the was company. million assets Adjustments with and that receipts compared basis earnings of year's maintenance $XX.X the to adjusted chain. improved below due-diligence flows in $XXX.X reported year The and in XXXX The as $XXX.X year. fourth million and year. as $X.X from projects $XXX.X last is year higher primarily segment, $X.X adjusted both operating were operating reported the fiscal compared million previously year basis, from the per invest gain in that inventories, profit fees attributable XX% $X offsetting operating decrease our well a in to sale million status. million $XX of of associated was $XX.X the in company to in to million Part this invested XXXX contracts, the adjustment continued for Precoat million $X.XX Partially to prior held the expenditures capital million recent EBITDA share having year for timing with and were was by and current our Carlyle million $XX.X year. Metals in million of operating operations spend. spending delays the million of operational prior

invest For fiscal $XX $XX business. ’XX base to million in to we expect million our

During the company $XX.X the prior $XX.X in shares million in million year year. outstanding the repurchased compared to

Galvanizing reduced company Creek Steel During the Metals. activity acquisition the fourth and of purchase of pending our due the Precoat to quarter our acquisitions Galvanizing, DAAM

we year our return the to $XX.X shareholders continue through During returning shareholders, to to capital million dividend payments.

significantly acquisition As this we will to Precoat of we our as for progress Metals, change accretive forward, profile higher pay with acquisition. our incur borrowings leverage highly

We current and with our approximately We had acquisition our term loan loan X.Xx. group of raise to financing bank X.Xx very term be through equity our marketing leverage secured our for financing fully approximately following levers will our compared begin shortly. expect the a

shortly and financing We are diligence the expect a component, Precoat effectively an path down to contractual allocation desire due on the to equity fund have acquisition. well close are our have and on and NDA under finished capital

Tom. completed complete fiscal with across back fourth segments. our established strongly and I’ll continued generation to and quickly. it just repay have continue our Once Precoat With strong will newly to flow debt acquisition, our over strength year that, quarter the very on turn cash focus you we strong to XXXX started we We deleverage utilizing have a

Tom Ferguson

Philip. Thanks

we just to. have are you we me indicators While let paying continued some our attention give key guidance, that particular

continue increases increasing we surcharges, able and input cost We believe operating cost galvanizing continue especially to which Metal both, we with price zinc expect the our will of arise. segments, efficiencies. be we the For general to offset carefully are Coatings business in tracking price to will kettles, costs,

for is Industrial turnaround we're seeing Solutions activity turnaround fall outlook and spring in internationally. improved the platform Within the including the scheduled filling nicely,

have the and track strong most we continue and units, for to of platform particularly For switchgear our electrical proposal business backlogs enclosures. activity

fiscal acquisition management our optimistic Precoat. on or processes corporate, Metals, recent of we're to associated pending strong work closing the the in continue acquisition to We focus May we acquisition contribution distract for soon I paying complete anticipate fiscal cash with Precoat down the the begin equity for an I the Finally do mentioned. we the the of regarding bright for and And, XXXX. great prospects Precoat acquisition Metals Philip of should from balance year want out to debt have and operating will note will will results announcement XXXX, realize while that will and not soon the on we as

even operating commodity growth XX% to businesses XX% our remain Metal around I inflationary combined allow of Coatings. Coatings our Metal committed believe will will targets, margin to to support We factoring the strategy AZZ’s acquisition pressures. Precoat in

For focus and strategic a improving on hit the currently have survived in profitability, to in able momentum fiscal been XXXX, COVID we disruption of year in continue while Solutions will gained negotiations We at Infrastructure to finalizing XXXX, process. XXXX gallop.

of We cusp significant you becoming patience it Metal that, highly these company. your open a questions. a our as profitable, up thank the oriented, next for predominantly of we for Coatings with fulfilling ago We commitment are on growth And over year we'll steps. take

Operator

[Operator Instructions].

question will from go first Franzreb & Please Our ahead. come Company. John Sidoti with

John Franzreb

impacting the of XXXX, this, since curve far level Phil your morning you how you nice zinc question and profile increases. quick instituting a ahead now? that A Congratulations you’re margin you know prices, David. Can know the prices. as you highest the you're it's especially price if the about, surcharges price on and Tom bit on zinc right mention and as Tom, with talk on quarter! increases, a much commodity little Good

Tom Ferguson

it those continually to our we related and But to I'd the that. stay his of of – to pretty there we the do I'd we've know so it cost things, and reacting ahead of what that basis. sync. prices, are electrical Brian a we’re even much rising – our project curve, abreast or on to I’d say – kind got taking and of When in ahead of and our so have we've clauses curves the very are advantage team of curve, more stay looking somewhat daily, comes just in most Yes, the yeah, weekly say we've and able contracts businesses, and escalation say you track to curve we're carefully been price somewhat but to, so

WSI on the they good place. then – and Moving escalations escalation solutions, of had and try the wire the welding more deploying come in. but forward we'll they in their get to to industrial on And jobs or that inventories are pretty

So I'd even say little of ahead the they are or a maybe even to curve. bit

John Franzreb

And any quarter? fourth thoughts on the how margin costs impacted gross the the much in commodity

Philip Schlom

No, believe had on the I didn’t that quarter. fourth in they significant it margins impact – don't a our

Tom Ferguson

Yeah.

John Franzreb

the reversal is And it. asset what impairment not Got now charge, sale? for of the

Philip Schlom

fell one in facilities There’s and know out back platform a for and operating the had to negotiations that it up and year's point of at electrical our sale, had you it return status. electrical our to of determined it we and time expansion of with under we looked

John Franzreb

$XXX much for how as outlook Got it. revenue of that metal million the Creek as far Steel and or the in coatings, the coming $XXX revenue revenue then And profile regarding million exceed quarter? contribution from is

Tom Ferguson

X%, mean probably relatively yeah. small. still X% It’s I it's or

John Franzreb

queue. Thanks my Okay, in alright I'll get the for questions. back taking

Operator

from question will next Noelle Please come go ahead. Dilts with Stifel. Our

Noelle Dilts

Hi! Thanks.

at into fiscal metal you more for following growth clarification. up kind of this coatings When little element past looking fiscal on into get ’XX? look from sense of expecting if up ’XX, and the John, forward volume can a perspective last a us a you give of business the also year seeing from – as you're what volume pick bit ‘XXXX maybe Just to and you that you're question

Tom Ferguson

the the the that you line of keep zinc quarter. it's to Well, you rise, half in costs in start would good that if seek with know first hope of Obviously – hope prices the think I we're so. year. But our first off pace that, we’ll fairly We continues. continue to at then quarter know first would is indicative a least we to

we as like fourth winter a that. Second weakens little know year, and bit things the of may half you normally have our quarter storms

of cadence, a or from and if we XX% from acquisitions, organic mean it. anticipate I obviously it’s a the growth at over partly kind a but the So continued years prior look galvanizing. X% partly things like improvement of expansion same what, you spin at the

Noelle Dilts

solar then a and of know a solar kind you of we work. seeing the – a bit project And that some getting of delayed? past that a on that you're about terms into key may that growth Okay. been or know it the department panels you're delivery you investigation front of driver commerce talked Anything in in heard I differ recently. has Recently seeing and

David Nark

you latter we're not point, anything we've going the second we’re think David. up, know Yeah, at that to Yeah, it’s at well shows but time if in We in of from delays what part year, now is seeing you but any all. the team hey This not seeing at from you that be Noelle! any right closely. that impact out our know we're this tracking know this of we're this half got that working

Noelle Dilts

then materialize hoping see to expect years? just synergies the was to that just Precoat either side if last, sale any several on you over next the you back I discuss, cost go or the could Thanks. and you know you And

Tom Ferguson

the particularly, absolutely! side sales interesting. we've – it’s Oh Yeah,

We customers, really in sales and as different to – plan them nice joint our parts into excited explore across with of know team, call other's well, we particularly pretty the same you Precoat have as but our a so a cust lot – so we're that. opportunities have on probably sales customer, of at opportunities new customers, process, team similar we about each the well galvanizing

from the a week. just meeting to going a part think opportunity things these We’ll and be tighter, engaged, this some we side It’s we’ll had of nice teams quantified synergies. we've teams continue week, but standalone pin down engaged thereafter. We look to the We’ll across haven't and cost some and next things to yet. these got Then pre-fab things have little We to and like well close the that. have a of post-fab. of start the this now it actually we line, fabrication that's both on then until and obviously leverage cost

for opportunities, be system it or process whether other side Looking side. the on

of opportunities got know cost not scale pretty a big So teams we've are from we're hopefully like this, benefits have and on just we synergies and some some can some we insurance some while think to good our you going that of contracts that. things part get

Noelle Dilts

you. Thank Great!

Operator

Our with come next Kansas Capital. City Please question from John ahead. go Braatz will

John Braatz

Good morning everyone! Tom, you you seeing products are mentioned that you've seen growth business some from? strong end order the in markets that flows What come and good electrical backlog platform.

Tom Ferguson

Yes, this you've storage we space energy but you electricity call confidentiality know got to to can't for just the it we order. BESS that system the we've battery and booked opportunities the battery for it storage in be reasons, grid. see to large quantify because – renewable able have to get get projects. that, We the energy Unfortunately more big store

five is you stay think that. which fit grid years solid got them to I several if answer you we to that's e-house well to critical. because and businesses. strong or They us anything continues then David, know don’t be plans add you pure we've the large opportunities. to is versus firming distribution way to are want three going that transmission up for building with know are also those So centers know closures, and of Data

David Nark

backlog, and across strong, it's our the switchgear businesses, platform. lighting we're side across back can in I electrical the in or tubing I our we’re just electrical increases so point one seeing add whether there. improvements think seeing on

John Braatz

than it's so the just battery Okay, energy storage. more

David Nark

base you up you XX% we’re backlog battery Yeah, the storage, know if the you out some in take China out of and about reductions then on energy year-over-year take business. backlog

John Braatz

secondly, risen well, And rates? acquisition, in rise at guess or interest when past or know during the has and you changed of month announced of look when of the – was, have it acquisition know a considerably you the this you Okay, the rates I okay. subsequently good, month of at okay, because whenever all economics acquisition it you then about Precoat ago

David Nark

and but financing more I and not that pay that's mean going on in term path. down little to we have a it really, we're interest, to colors facility loan proceeding we're have got a so

the employ. this really on don't allocation to we're for working of really along nicely, that moving so capital is We’re accretive I It’s a us. strategy equity working see you the that piece opportunity know

So AZZ ’XX. kind that generation off we when we and fiscal how we're have of know discussed just We're look cash they the great opportunity like think market savings forward. operations take we you some looks and a and regardless is having everything some still communication own we move nice It forth. this for so do the based of – the current of and our and yet, not back you are at to starting but tax accretion flow to advantage this going don't that

John Braatz

Alright, you. thank Okay.

Tom Ferguson

Thanks.

Operator

come Gabelli Please ahead. Fund. with from go will Brett next question Kearney Our

Brett Kearney

questions. my taking for Thanks morning! Good guys! Hi

Tom Ferguson

morning. Good

Brett Kearney

We I month? in each in you far, but to close prepared any guess updates your the additional it the provide then can of around deal just and and Q&A components terms the the financing of thinking remarks touched some on next so timing of those latest

Tom Ferguson

We've now. but committed the transaction. place further, a and you much know into will in got our so Yeah, campaign marketing I won't and to loan market our we're too we go that say begin equity to the B shortly term financing finalize push headed out just

Brett Kearney

what to a amount imagine follow-up. formulations then And of Curious a I some in Precoat inputs zinc. just quick key rise great. the are? metals Okay,

that inputs just think major could about on the help you me If business.

Philip Schlom

you the on at take driver. you we is business a really the and wise the Brett similar, major know side. look input cost business it, galvanizing variable very [ph] how their know on just totaling when you big It's that's so paint know you high Yeah, mechanics overall and definitely operate a on

just So costs. it's paint and labor really

Brett Kearney

Okay, thanks so much.

Tom Ferguson

Sure.

Operator

question next Our go will from ahead. Hinman Walthausen DeForest Instructions] &Co. [Operator come with Please

DeForest Hinman

questions. my taking for Thanks Hey!

how precoat Can terms little debt be color you are on of just you days. it reserve should We the within know us transactions bit arranged. thinking help mix one close and XX with a about of Just the transaction. another the they upon this in equity and you looking more around the

Tom Ferguson

billion revolver, the had at I $X.X would million that roughly equity before, think million a facility $XXX we Yeah, of component. that $XXX with we're looking but borrowing upto a disclosed and be

DeForest Hinman

can number press little really comment. bit I and a contract you more talk mean storage backlog verbal extent then And then your Okay. you in that release of the you mention battery a the can, to about big the just make the

dollar You said said talk it's increase and a really are basis, on just mean they mean big your year-over-year you but about lot I a really opportunities. a and sizeable even it, you can't I backlog sequentially in

that statement, over You of that $XXX backlog, know know in it simplistic of most Is question, that million all you order? or the battery is fair a it? increase is

Philip Schlom

I you it's take – of backlog the out we the China decreases had. in best at order think look when XX% that, that when kind the know you you explained

for order XXX will come it'll So our there's a We over facilities construction battery sizable million. what during well planned energy storage to ship fiscal the or we're and seeing, it's ’XX, to $XXX A speaking Tom going in under this as based was forward. great not for expanded so and opportunity market it's on and us out units an potential know our is already you backlog of execute believe nice year. its then during, this it is plus ship fiscal to and so

Tom Ferguson

been Yeah, this working. we've a design was

so you – For there the a out the so been we've we design over we on for a while, know there's a it know battery it. being opportunities working and next see $XXX million, energy you this need was storage great three and period we we've or million that got million, – over $XXX $XXX of a think and we for years solution you know two

three our portion which you got then those performing strong facilities. improved And have been as and in more businesses is input backlog in increase as a international our So two and Philip, reduced and of switchgears space, front, enclosure well, and significantly. well, businesses our facilities, we've BESS but the we’ve is domestic got and but significant the [ph] service, know the of on all-pass have on

in improvement battery backlog, based broad not a it's from storage. the that energy So just

DeForest Hinman

a say to don’t this ask think I have some the battery it Yeah, our or perspective we know backlog you buying it, new how business of something is and that's helpful. there this it about but it then in party things And doing, you maybe exactly new wheelhouse? design? solution, is that's on, the know or is is we've in some of what before or that from mean won what’s Is we're when an I about the from this engineering we're done batteries third – you know part where

Tom Ferguson

No, certain and due wiring very work is enclosure supplied integration the from fabricate and to customer. this the traditional components the our

because space, very traditional backlog, So heavy represents it's fabrication, like it the enclosure so wiring much relay the very, things that, for the very integration, traditional. our panels, backlog

year-in, there know You design, it's it's electrically and is thing the but nuances consistently in we year-out. do same the structurally

DeForest Hinman

you're of seeing Is component last going backlog. is that back as with then had seen opportunity range as past, just follow-up the piece generated think that the the in and those segment we if obviously a what for the to perspective operating backlog mix there I in type But side, well. currently Okay, a a on business? from mix you there had Infrastructure that million margins type know XX% $XXX

Tom Ferguson

is. it Yeah,

few there's scale supply know on our sure but when nice when and still is just components there's margin a in managing get efficient, – challenges this time, focus good we focused get making productive chain, we we pop labor and yeah, get the good we You which kind and volume. get is keeping these there backlog a more of of kind that days, leverage

DeForest Hinman

just question rundown your anything be same the a then two worse, seeing labor last or the you. And would situation better Okay, within of thank know you very helpful. there, on is segments, the

Tom Ferguson

great Yeah, on a the done team's the Metal job. I side, think Coatings

little and so doing to programs improved. are a or we the has we've which a I’d some craft job know job. get, where industrial it's skilled that bit. trying and stable. that do on teams in got I comes the us great employees don't our the related retention it part hiring a the not, boarded and U.S. on I side, it's we say semi-skilled, we're we is with helping the get But improved Solutions, due say with to have, the it's side improving they’ve using When about electrical but WSI inflation, Infrastructure think of on it's wages, side, I'd to more We increase help least craft, think – done it. And at did retention. We programs engaged, there. We've contract when I good are to better talk that's

to know to You get recruiting and hiring, and engaged recruit. have with our mature part of new and this for is ways continued programs

more from and stable it's you say situation. a of I'd into – So know improving moving

us that actually have good, it's our do lot what I of feel think we pretty able to been get to to So point. teams a but

DeForest Hinman

for Okay, questions. my thank taking you

Tom Ferguson

thanks. Sure,

Operator

Baldwin ahead. Our next come from Baldwin question Bill with Please Securities. will Anthony go

Bill Baldwin

Thank doing the you've good you. job been over And job there. folks on

Tom Ferguson

Thanks Bill.

Bill Baldwin

a it’s long but off, journey, been off. paying paying It’s it’s

the high can products? again major what market of voltage are size you the both BESS of business me drivers BESS business, your, remind and BESS your the for On medium

Philip Schlom

some last gen. work out customers retrofit the equipment. Again, to there refurbish BESS to really swap and of Yeah, The know that's into as side, are in fair some really a connecting of it's where the switchgear, work power And large very project so field Also the into and voltage for about projects. going really voltage well, out. Bill. the existing sure domestically and gen in big me work group drivers we they helping doing folks high amount transformer China here year thing Medium up power the goes you continues had then BESS. also main service voltage on it with are and BESS new

Bill Baldwin

source or it be the the Probably are those difference of does is hydro what make gen like, any gen power natural power power power or real the… the products of is, source it gas would gen

Philip Schlom

any We so no for make of both see doesn’t projects difference. really It yeah, us. really difference on those, sides

Bill Baldwin

see we about is what business. a BESS of a so on of When we're and the for that on economy out manufacturing upgrades, expansions talking our lot medium side really of the driver the forth, here spent money

Philip Schlom

that really as voltage plants it then medium you again plants connect a off some be. some see manufacturing it of on that and BESS to just is lot you'll extent we coming Where into can these described. Yeah, the to and have industrial medium voltage switchgear

Bill Baldwin

side? order medium Is the BESS on flow then looking that pretty good

Philip Schlom

they but services. Yeah, know run of at their nothing. You towards kind normal you are more know, we’ve rates, pivoted

are they project just size. able than more the to So opportunities pursue

Philip Schlom

Yes.

Bill Baldwin

Okay. Thank you very much.

Tom Ferguson

thank Bill. you Alright,

Operator

session. This like I turn to to would concludes Ferguson any our question-and-answer the conference for over closing remarks. Tom back

Tom Ferguson

you. on continuing and there, the that us been planning things everybody some thank gets for Alright, today. in. out involved joining thanks We look announcements get to confirmation we've so forward Well, to

forward we're and and few the that on get over weeks, you’ll and progress looking very initiatives. on much. as Thank you well we So make to forward close next see our as hopeful when you you'll acquisition. next businesses the in a talking more continue to We're of to that to that Metals time. We announcement good our Precoat strategic look

Operator

you The presentation. conference for concluded. now is attending Thank today's

You may now disconnect.

AZZ (AZZ) 22 Apr 222022 Q4 Earnings call transcript