Earnings call transcript Q4 2023

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Operator

Good morning and welcome to the AZZ, Inc. Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Sandy Martin, Three Part Advisors. ahead. go Please

Sandy Martin

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

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

include forward-looking that pursuant begin, Harbor of the made I provisions statements Safe like to we XXXX. Private Act everyone of would Reform will Securities that Litigation the remind are Before today to our discussion

statements for the uncertainties, from control. documents by our comments statements the of by time-to-time Forward-looking company’s forward-looking involve nature outside their actual with are AZZ detailed results, and filed of which uncertain may risks Except in are containing some and Securities year. and should not upon statements these expectations. Actual including Exchange of on undue guarantees These therefore performance results future and are differ not for the be annual materially from Form reliance report XX-K Commission, placed could fiscal them. the

are to press the been for and included of release press measures. call Form website In non-GAAP and to in further discussion earnings substitute have measures a The investor financial Non-GAAP financial posted to be X-K measure GAAP include the should refer addition, as and financial non-GAAP our to earnings you presentation reconciliation today’s in will supplement submitted SEC. not GAAP today’s on of nearest measures. and for the QX presentation considered included detail. a release a the We

to call CEO. to I Tom the over now would like Ferguson, turn Tom?

Tom Ferguson

you call. for full XXXX. for to our Starting morning. fiscal joining year am AZZ’s on quarter We Thank Metal and results of the I become us Slide AZZ team for entire performance Thank am a hard generating towards Coatings to earnings our tremendous you, AZZ Sandy. I AZZ our year work our the I fiscal X, team this made XXXX fourth for Welcome with company. team. pleased AZZ strategy commend Precoat progress and record coatings pure well. of into and coming performing Metals appreciative metal

$X.XX EBITDA $XXX more resulting On are We and basis, share X.Xx income down generating and our guidance. end our we sustainable and to reported debt continuing adjusted up XXXX adjusted at sales fiscal billion, in of company. of paid versus AIS. a a fully committed focused achieved operations building stronger interest in XX% sales net remaining annual million within and earnings We while record EBITDA from year stated previously received $X.X leverage of equity per million,

and see can numbers $XXX for months financial Precoat was about about of flow you more we fiscal here higher will up of fourth on in adjusted XX% on for resulting and Metals our million XX% XXXX. XX achieved quarter reflect As adjusted adjusted or Philip talk sales. Slide a full generating over through of basis $XX.X weeks full income $X.XX. Net shortly. EPS year in year million, results good These Coatings EBITDA sales Metal on XX X,

up of earlier most peaked with zinc versus of growth organic $XX Slide with sales million, to sales Metal $XXX XX% strong a organic and the result growth growth. another to coming over XX% Coatings year, had of The our was inflationary AZZ XX% Operating up Moving an million of costs another acquisitions DAAM in million. of margin year, added operating as X, pressures, with Steel and $XX Creek, despite kettles. was XX.X% which particularly prior income from

We our on discipline pricing focus continue value maintain our to to delivering and customers.

in Our digitization productivity customer service. to and payoff both investments continue in

efficiencies, supporting on in focused innovation asset maintainability are and Our our and sustainability energy technology investments improving initiatives. efficiency and

Turning AZZ solid the $XXX expectations nearly slows and sales to on as volume prior where performance year, unit its due million growth weather. of to of EBITDA. had that were Precoat increases through and quarters its to $XXX mostly within a and Precoat’s basis through million paint during construction through. versus slower part sales was by XX Slide weeks growth Precoat business cost passed comparable grew solid seasonally XX% our generated X,

in had our customer mentioned third quarter the bottlenecks the the inventory during As many call, reduced quarter action at that Precoat caused owned fourth took at team management locations.

a recently MMC was prior expansion on at this This gauge as material supports to finished that an and expansion important our that Additionally, the started acquisition. construction infrastructure focuses project our facility their team initiatives. facility plant it heavier

their Precoat of most team normalized is now levels reporting plants. at inventory

curve Finally, believe experienced pricing with that steps cost I Precoat inflation. bring has line significant taken the to curve has in its

Precoat work Coatings. to on efficiencies, Metal have to show efforts run-rates their encouraged realized and expect has expected in progress am half XXXX. identify to and still more synergies the team do year I sales our the While between and over expect production synergies the we fiscal up still in by

to over And with will that, to I financials. turn run Philip the it through

Philip Schlom

focus on commentary Tom. will from the operations. My continuing results Thanks, financial

and in our and resulting Metal supporting from interest on these include earnings date acquisition results non-controlling overhead segment Coatings businesses. our our equity the operations our Precoat Metal infrastructure avail of AZZ XX, the continuing segment May corporate and business our from Our

AZZ on the our quarter On XX%. roughly were and comparable sales Metal quarter a X, Slide of same The AZZ quarterly recognized QX significant Metals Precoat increased Metal is basis, current current of fourth a direct significantly The $XXX.X in sales year the continuing of million. pricing. segment the addition $XXX.X prior Coating volumes sales million generated million sales of year. Metal up $XXX.X prior and year $XXX.X stronger for increase the million versus by Precoat result XX.X% quarter AZZ the of quarter On Coating operations from of in above

from only of results were Operating fourth the quarter our year segment. of XX.X% Metal or for Coating of the continued Prior profits sales. with $XX.X million XX.X% operating margins operations reflected

of While the quarter on normal coupled fourth the year our volumes were inflationary we Precoat’s AZZ due current seasonally last Precoat explained lower headwinds. compressed Metals, to with reflects earnings, margins primarily as call, inclusion

expect to to reverse quarter We curve. improved as volumes and this in inflated the noted curve first up pricing cost due the catching to Tom the

fourth $XX.X was year Metals the with a only contemplated in in was again and in of combined was – rate Adjusted reflects guidance. quarter, EBITDA results fourth with was a EBITDA than fourth our sales year, our higher on than two the prior year’s anticipate as higher addition the basis blended the of Precoat Adjusted XX% million for which percentage quarter, of XXX as result The the Coating lower We points of segment. prior a quarter businesses XXX.X% Precoat the forward included sorry blended period our the expectations. line EBITDA full Metal margins as of moving Metals.

our were On weeks Metals of $X.XX reflecting of year Slide billion Precoat addition the for the sales X, full year. roughly XX

performance were year, year year the period significantly margins operating only continuing segments, Metals Operating above including prior their period a for when on who profit below Precoat the during of Our prior including from XXX Coating of ownership. period. our XX.X% million operations the $XXX.X had was points strong Metal basis full

share businesses. our have with generate the XXXX reflects Coatings and EPS expectations. compared Metal was Precoat from hard pressures $XXX.X per in $X.XX with or our for of adjusted fiscal strong results diluted Both XX.X% $X.XX newly million in share the of of year line Adjusted performance per EBITDA Metal the continuing ‘XX. at and inflationary worked Adjusted managing market combined segments operations fiscal EPS

$XX.X $XX.X the prior Slide million from year. On X, operations for million with compared continuing in flows fiscal year cash the were

of the XXXX was Our the acquisition. our year. $XX.X were fiscal operations million capital expenditures year compared as $XX.X with expected strategic rationale for million increase continuing Precoat prior This from in part

Missouri XXXX new capital the fiscal million investment million to Louis, St. of area. and roughly nearly $XX nearly in Our our in $XX and capital of allocated $XX construction the million maintenance facility includes Greenfield spending Precoat growth normal plan

and to continued common pay quarterly have dividends. declare We

For common year, and of $X.X $XX.X preferred million payments in dividends full the million dividends. of we paid made

$X.X XX, September AZZ XX, for Solution subsequently On small interest our Infrastructure oilfield on Carlyle cash controlling from Slide then in XX, sold on tubing May XXXX. our the we excluding purchased in Sequa Precoat segment, XXXX and billion million business Metals $XXX for

fiscal During the from through and year, $XXX.X million year by cash operating acquisition of reduced leverage our we our AIS the to debt end. as proceeds $X.XX sale reducing of $X.XX flows, from

pipeline on accretive highly While risk of targeted focused are deals exceed our a for only good we M&A we galvanizing, particularly that have low returns. opportunities,

stock and debt reduction, growth did on fiscal focus our in XXXX. not Given buyback we

a acquisition below towards good debt B target Loan Term our our reduced long-term we leverage X.Xx, since date Xx preferred improved XX, to our of the leverage. Slide step

of rate exposure. swap our covered maturities have interest existing XX% until loan We not facility have credit agreement to continue any our We current do XXXX. debt term more further to on than reduce by

it turn back now his closing for to Tom will comments. I

Tom Ferguson

Philip. you, Thank

remained container and Coatings of Moving to from noting demand, customer Metal industries customers activity benefit that in our and increased Precoat particularly with a Slide spring for our in seasonally the is as first season, for backlogs outlook quarter they construction strong XX, citing the fabrication many relate centers. to good infrastructure continues with data customers many of construction, solid spending. to directly solid see Fabrication growing backlogs. good

been normalized the actions due earlier, have mentioned have As I we taken. customer to inventories

are inflation offset to positive Precoat’s beginning impact to margins. actions show pricing announced Our on

entered have us. the fourth am have And to of quite quarter year. frankly, stronger the We I slower glad quarters behind the

mitigation, capital on return to debt to projects. Our focus will risk investment corporate continue the rapid metrics, team allow allocating cash generation prudently to highest reduction, credit on customer flow

would excited move fiscal on slide, growth for end I drivers that comment secular on markets the we our to impacting we are to guidance Before XXXX. strong about like

American and in from Act. strong our hold this or $XXX billion bills Precoat and Investment Coatings Our these Metals outlook indirectly positions. with We benefit expectation year totaling from Metal market spending positions reflects Infrastructure U.S. and directly leadership the to over financial Jobs

are other perspective centers, energy and We related our well about clean power critical and infrastructure. data projects bridges as as roads, to transmission opportunities and important bullish airports

the America long-term reshoring as focused America pre-painted well the to Our steel. growth Buy to migration manufacturing shift with Build aluminum as the from include benefiting drivers and

addition, conversions, conversion plastics beverage to from In the supporting material for are are in critical aluminum sustainability industry. example, there important They the projects.

opportunities All of AZZ. create trends incremental these secular for

that plant. will coatings an supports plant is customer updated us with on majority dedicated in exciting this Finally, committed and valuable aluminum our progressing a we progress. construction filling project with of capacity you we for our to keep a Greenfield That are new the

maintaining you at guidance EPS adjusted see $XXX of $X.X can full XXXX billion our we million guidance are $X.XX million, to EBITDA fiscal $X.XX billion, to here and Slide As of adjusted XX, sales $XXX on guidance to $X.XX.

how we predict more they much from expecting their tax will income we working While we be accounting. the on first still are also our not while this to price is experienced normalized on based rate quarter. quarter that some than purchase fourth I are stake, the equity a in will minority note ready EPS are

Finally, dip galvanizing on hot why XX, of a a a the is serving and great irreplaceable with and cold investment? AZZ markets. reminder, independent an diverse Slide footprint believe as AZZ broad company set leading we as coating

high Also, value-added that commodities. metal are and financial business, by and value people customers cash profitability during with produce record free track flow a tolling As we continuing our not protect shown as we returns cycles. generate to great economic to exposed and all we excellence develop We as to a margins solid long can technology. margins have innovate of operational outstanding our and emphasizing delivering well directly

sales both strategy. growth our to through acquisition improving organic flow and are and growth to committed generation expansion and are cash We fund driving margins

results shareholder long-term to as We well on as will and value. maximizing continue financial driving focus performance

during Again, for their I our thank and and thank am want to metal want work to the exceptional our company. proud coatings especially journey AZZ shareholders and This a our hard team focused become entire is an team. dedication and transformational Board accomplishment our support I I all to their for of

will up questions. we for With it open that,

Operator

question come will John Sidoti Franzreb & of our go [Operator Please Instructions] first Company. ahead. from And

John Franzreb

the taking questions. morning, guys Good for thanks and

Tom Ferguson

Hey, John.

John Franzreb

business to embedded what fourth Could the surprisingly revenue two XX% segments growth, and segments, of your start the with in roughly XX% X.XX like good I’d X.XX? two just guide talk growth underlying you in your in are assumptions and quarter. about the

David Nark

of X the segments, segment, over have look to Metal continued Yes, John, quarters you at slight but the opportunities and lot When last business a we two backlog, there. that at have or a the Coating and – their back to are the really on of solid Precoat through seeing the are markets a some opportunities with, don’t run thing, same good of Tom have business. business, start think the those I for slowdown in they XX construction, to was solid the a of lot COVID very but secular got when you speaking of drivers the some a side look overall they

Tom Ferguson

let growth of year. most be line I growth, Yes, think and come is embedded focus full going and generation. going me uptick Precoat And the management just we value is to John, having top flow add, our our cash have the more significant guidance, don’t to for on in from

we growth have don’t significant to guidance. So to have that hit

John Franzreb

get about about of lower in Okay, plants and resolved, status roughly business. enough. of at was your three kind roughly And fair quarter back four that probably this to update talked Precoat was business taking talk a view then, last what lower to the margin? maybe on And quarter, to that taking fiscal you four to solution us three ‘XX that margin

Tom Ferguson

think was will. I just more it of internal some if focused on misses, more efficiency Yes, our you

So at changes of some at – made plants. we have some management those

made while We pricing some gone have of just also margin really adjustments in improving been have lower organizational for It’s a changes we productivity. type of category customers have the of things some for business. the It’s not kind focus consistently. help customers. efficiencies that just on a on support to and that And some made

that. the a So value, want plants to well focus Precoat anything we it’s specific, focus vast just deliver do majority want exactly not on to more perform of on and we to general

John Franzreb

last million maybe any Got one $XX the and get X updated it. does question how years now of just coil back status in that kind a aluminum plant in new CapEx and into this at year, the of the queue, from CapEx And built? look

Tom Ferguson

they event the dreary Missouri – doing site. fun was ceremony the had excavation we a are on quite that day. bit of a were Ye, already frankly, a that more of on work And groundbreaking cold Governor was the they groundbreaking of with quite –

So, official on. groundbreaking going but things been have

secured. got the and delivery have We equipment order on

items got We the have under long lead control.

good we going We it that have to with hit the – float a enough are really targets. it’s in schedule

at point. I about feel good real it So this

facility, especially to that the want that about pretty Coatings in. spend drops into, we open. $XX which range. still construction the spend both to this that equipment, and Precoat higher on we we to going million ‘XX facility sure critical get is are also items under somewhat We are That like slightly that think I say significantly normal is drifts having get get I’d back things down million that year in on off as than make CapEx nicely normalized calendar Metal in that $XX payments both I we say

play to some improvements. is improve we out efficiencies go remarks productivity, facility deployed improve start controls doing I both and just drive my for digitization. being So continue We investments the some us things And to to in are operational mentioned – and this things away. drive MMC those but had CapEx expansion. to that’s other helping

John Franzreb

Thanks. Great. I into will it. back queue. Got get

Operator

comes question from ahead. Thomson Davis. Please next go of The Thalhimer Adam

Adam Thalhimer

solid Hey, morning, guys. QX. good Congrats the on

Tom Ferguson

Thanks.

Philip Schlom

you. Thank

Adam Thalhimer

QX? wanted for a don’t to growth thoughts You Precoat history just sequential lot had at at Coatings, – what have commented and QX get to are growth you I your sequential we of on the Metal revenue because expectations, revenue a on

Tom Ferguson

Precoat. it’s – It’s far pretty the quarter It’s is winter significant, the because by slowest QX for months.

when So can. and they construction doing up construction is slows just are the inside they

you check better? I’m I’d least are at have the have quarter-over-quarter. spring, XX%, Philip, to better going XX% percentage, which anything weather frankly, I We into construction. quite but more now to say

Philip Schlom

XX think XX year. or their No, about It’s, the fourth Yes. weeks of quarter is, right. slowest I that’s

see QX. So uptick a nice we will in

Adam Thalhimer

the had in Okay. a And the a that the sequential QX comment about highest or then higher you press EPS a comment year? quarter. Was for release seasonally first is

Tom Ferguson

sometimes quarters thing. quarter weather, strong sometimes good secondly QX are we said going really seasonality just and historically, good They on its talking third and – its general spring, infrastructure. XX Coating, more are in construction we I strong north. about quarter. for be get for particularly a – winter, Philip mainly if be And the as that you look weeks heavy winter, serve as we just out both up coming it’s entered somewhat you And seasonality QX think but of and we reasonably then some as quarters. fall a fourth the get are quarter, Metal But dependent QX. tends you XX two both areas Then of the to now QX, to just tend of course into the of in particularly

to Our up little quarter Metal be in stronger most of in have tend do than things and tends the the so… South business Midwest we are a – Canada, they because in facilities to other Coatings third our

Adam Thalhimer

you EPS and preferred and am dividends. trying be share And I it then but the get if and off within something the for Okay. preferred your revenue EPS, EPS. Philip, assuming count are right EBITDA, I range And guide, wondering to what within the count might is to am dividends? for just on share

Philip Schlom

Yes, dilutive and year. is the for it’s on preferred be X.X there with conversion will shares Blackstone the the equity, preferred $XX.XX. associated dividends, And XXX million price million the the is preferred

into So to consideration. need take that you

Adam Thalhimer

from operations then high And in thoughts cash level Okay. one last fiscal on flow ‘XX?

Philip Schlom

CapEx in barometer you cash at good look our I for a EBITDA the generate line our When less with flow. guidance, to think is it’s ability

Tom Ferguson

Yes.

hopefully ramping just things million payouts this we like move is we for QX, on, us it’s or some in down more debt noted, is $XX not when inventory are some we have the have consume debt we that. two we of also big paid to paying And we of and cash so QX down to As do bonus be help $XXX as targeting, a are because to lot likely up season. of things, just

into significant see we where the then pay-down. So debt quarters get can to expect you more

Adam Thalhimer

it Thanks, guys. turn over. I’ll

Tom Ferguson

you. Thank

Operator

question go comes from Capital. ahead. John next The Braatz Kansas of Please City

John Braatz

Good morning, everyone.

Tom Ferguson

morning, Good John.

John Braatz

be Tom, be is, on they and the some and so might and say improvement it terms see on productivity versus on kind better on at gets seems any forth. What in at thoughts maybe complete so I of much efficiency? incremental where of so focus improve will volume you How the better could Precoat? those year and projects of incremental or guess like once improving margins Precoat margins and margins we complete as this that? the question And let’s were before my those

Tom Ferguson

I think that there impacted. is a particularly things of variety

I think explain AZZ we of they used profit a kind we how this our I try know, of hits pretty have – badly their had and fiscal spread of presentation Precoat done to margins across quarters. terms year in better to and to

is margins have this getting our So, are committed improvements them by which year. to EBITDA to quickly. pretty means and the fiscal inflicted get we But XX% to still we need

Kurt I think the structural they good some team, and actions have organizationally. taken

that understate can’t of that In terms struggling, I on inventory this plants Precoat. customer of the of were some the impact

that’s of gone. most So,

rid of issues, to about accommodate down gotten when to pretty a outside that road that’s the leased outside and their all creates lot, an almost the of you to much on have think just having quality material, gone. move We miles to warehouses warehouse, go the cost some you time, impact several are be that And efficiencies, that. had

of XX% we goes there of their margins to into actions taken. have that. about, the returning So, to work lot talked it But been is vast a that majority have the the do – obviously

get going quickly are pretty So, this year. see we we as into to that

John Braatz

line? then get does St. to the begin contribute how Louis and secondly, going and to facility, And the quickly that bottom Okay. up

Tom Ferguson

is with believe we it gets measurable but construction up coinciding not – and demand I impact are it’s any And see going it’s, the as until – that’s it to the customers well. It for and going XXXX.

John Braatz

Alright. Okay. Thank you.

Tom Ferguson

Thanks. Alright.

Operator

go a is of Sidoti Franzreb & follow-up Company. next The question from John ahead. Please

John Franzreb

like Precoat, in as field has of seems separate of far got I Guys, halves. kind tale But ton good it into as it two everyone of a metal Yes. we business. a coatings think

first year, versus second calendar will the your of on much how guys Precoat half year revenue of into fiscal the you the half? For fall

Philip Schlom

To about XX%.

Tom Ferguson

Yes.

Philip Schlom

earlier, our and you slower And at think look weighted over our as then year, I to charts, seasonality seasonally. working more QX look if fewer they heavily if be the QX, fourth tend the you X-year than the fiscal Tom in quarter days QX. a history, in in explained

Tom Ferguson

Yes.

that’s enough in XX-XX, there particularly is in to I And sensitivity think it’s these harder – labor. skilled days, get XX-XX. where

hold So, and on our tendency capacity drive through to – the tendency this. to the is

get you kind movement in levels. So, absorption of that

pretty You get when shift. volume kind get that flow we quickly through a lot of of

John Franzreb

have the fourth quarter, in seasonality in And impact the Do registered, that Precoat of it. that…? rebalancing the normal margins much Got quarter? you the inventory versus how that sense impact was a

Tom Ferguson

say when on look drop, you materially Yes. than but normal. it’s greater the it, would at because I revenue about not XX-XX seasonality,

the terms the move can’t of and I as by was have toured I season, this warehouses was, that plants, In just constraints dramatic. created understate rest in it. the outside between the phenomena, and

it’s, So, the why that’s being are that sequentially gone, talking fact about pop mostly big a going to see quarter-over-quarter. are you we

John Franzreb

one like light X guidance looks and maybe thoughts And It you the last you low, Great. at that? can about talk year of that your why didn’t printing in just reassess about zinc’s your question.

Philip Schlom

we our pretty separated talked much of we as Well, have cost this can zinc. we pricing as much about before have the from

the hit focused before That our that to are cost kettles. six on us, zinc for this take price cost sustains months delivering lower we lower these So, levels. it will starts another value the –

And well hitting so cost we this before our year the this benefit kettles. we of are of any into see lower

offer that. have we to to and first the cost before two, in to that can will of sure we deeper that at But our cycle got as it’s got kettles months inventory that terms make our of a we we it to hold get six call that in year. So, then sustain on And services the into have lower we see take of just continue that move we that. the the again look in prices average value

John Franzreb

zinc months, like And in Right. looks the knows right? what six who

Philip Schlom

with a quarter. started over a quite bit just this We within Exactly.

John Franzreb

Yes.

my taking Okay, for it. Appreciate guys. Thanks follow-ups.

Tom Ferguson

Thanks.

Operator

The next Anthony Bill of comes ahead. question go from Please Baldwin Securities. Baldwin

Bill Baldwin

Yes. thanks taking for my and Good gentlemen morning call.

Tom Ferguson

Sure, Bill.

Bill Baldwin

far oversight to new first the contribute Just as XX as to a at income? of full far that up and gets be running, as that in looking on feet. plant operation months XX,XXX operating it accretive should quick accretive When as this

Tom Ferguson

It be will get is is XX completed full but first committed. the goes to volumes There fairly in that operation, that lot that because operation, quickly. Yes. of months ramp the into process yes, up testing full it once of a are on then the volumes

Bill Baldwin

And for to remind this far beginning the me, plant Tom, of what’s the beginning and type thing as as testing scheduled date the operate?

Tom Ferguson

It’s I the as brought in am should am so apologize. me, we about. I next thinking to – ‘XX. going have early with I it’s fiscal But early I in say schedule year,

Philip Schlom

believe ramps the what up for fiscal because ‘XX, FDA testing. I Yes. about Tom schedule and require it the some is it current Early will talking that, was approval, that’s

approvals, we will ramp a then ramp get year rate, is those to up accretive. So, full if will we which up, we

Bill Baldwin

assume you you to reasonable operating be sufficient design? second to ‘XX, demand your by fiscal you be up, is gave say, it would that half of months to capacity that would that the the six ramp And allows to that close

Tom Ferguson

year. ramps be the on is going But is than I part to how depending of the I with towards a latter part would demand customer – more say little that. say it. of would longer bit it’s this There up the also

Bill Baldwin

with quarter. job. too the performance Nice good. Good latest Very Okay.

Tom Ferguson

Alright.

Philip Schlom

Bill. Thanks

Operator

go question Funds. Kearney comes of Brett Gabelli Please next ahead. The from

Brett Kearney

my for Good question. guys. morning. Thanks Hi taking

Tom Ferguson

Brett. morning Good

Philip Schlom

Brett. morning Good

Brett Kearney

pretty the the some for you guess thinking galvanizing have into the that visibility activity, utility and could and side, on How highway portfolio? and that the CapEx you any the that Precoat side dislocations that the side behind of fiscal channel municipal from bridge about we seen about I of feels sources that and tailwinds were like, guess financing feels good. the mentioned provides Government, the banking we Metals support pretty happen U.S. support, how familiar I from from how of your on funding it fiscal businesses. plays that, good particularly budgets, have Tom, it

Tom Ferguson

That’s a great question.

some have steel, I some been of and think to Precoat trends they But that. aluminum to I the offset convert of residential on think slower activity. by underlying side, these impacted pre-painted some of the

this On there. still all chips and investments, of are activity I manufacturing part re-shoring stuff. the guess And non-commercial is we things technically of stuff. of That’s call the, seeing good it good we will like

factories being those constructed all several seeing here Texas, pre-painted in a sheet. particularly, of use of ton are We

of now, continuing. that wish fine. we ball, that’s high. a capital to continue is outlook And activity Right kind continuing I So, also hopefully, I are how had remain better with is going those, more infrastructure opportunities, some new us, that heavy for which the crystal long find deal a about to we that. like costs talked things of big like and support, the because focuses fairly is, gauge. that’s Expanding facility culverts that on

continue making something at Precoat. dramatic it from unless those happens, to benefit So, been investments we hopefully steps, those taking we and have

Brett Kearney

moving a energy, kind of, guess, of the portions Excellent. labor question markets are two are cost base. acid, in your is one, how then trending about And How peaked labor, zinc availability then other those active lot And you talked pieces, second we thinking probably favorable I in about, prices, I the you guess of in? how your the kettles.

Tom Ferguson

Yes. This labor is kind tight. generally, is of the – still

So, I bet we down. are

process the It retain for It’s and made outrageous went company. majority had labor had the I level review to XXX, went of any labor down labor. cover for which that’s merit just that. think is, things of as like adjustments shifts a wasn’t and through extra we overtime the on at are we our couple day, year the we on peak can XXX we to probably we with attract openings and probably given a

a point on – not It’s increased good. on pretty feel we in So, ramp increase terms this of costs high labor. at

still more things country, uses doing better and retain. certain to and once That’s labor. – have it the highly done efficiently. attract we tight we retain are in implemented labor of have programs We manage skilled, Precoat but to more some parts skilled and again,

things and impacted that that In of things paint. acid chemicals, like that these of was the some really the chemicals terms and Precoat outside of were additives

got the the that’s latter So, cost part of behind we kind the there towards why year. curve of

side, managing coating we and better disposal are I doing and – metal acid. our focuses of the On big acid is a on one acid mean

costs least though to price been even to were able have So, up curve maintain staying it. from with on everything acid, wire at the even we

competition been do customers availability So, our of able been when our making our we all has that. sure on and some service to have and can we focus of can’t

Brett Kearney

much very helpful. That’s Thanks Excellent. so Tom.

Tom Ferguson

Alright. Thank you.

Operator

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

Tom Ferguson

for today. updating much. I confident environment that further AZZ’s joining we you in you I all weeks. have on diverse investments Thank value capitalize us in XXXX am you our first as in few markets on just demand year and fiscal strong results look Thank the result And creation that made. a very will quarter to forward we

Operator

is and presentation The conference now disconnect. now Thank you attending today’s concluded. you may for

AZZ (AZZ) 26 Apr 232023 Q4 Earnings call transcript