(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Exhibit | Description | ||||
99.1 | |||||
AZZ Inc. | ||||||||||||||
Date: | October 10, 2023 | By: | /s/ Philip A. Schlom | |||||||||||
Philip A. Schlom Chief Financial Officer |
AZZ Inc. | ||||||||||||||||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
Three Months Ended August 31, | Six Months Ended August 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Sales | $ | 398,542 | $ | 406,710 | $ | 789,415 | $ | 613,844 | ||||||||||||||||||
Cost of sales | 301,296 | 305,155 | 595,150 | 452,236 | ||||||||||||||||||||||
Gross margin | 97,246 | 101,555 | 194,265 | 161,608 | ||||||||||||||||||||||
Selling, general and administrative | 36,239 | 37,414 | 67,762 | 69,558 | ||||||||||||||||||||||
Operating income | 61,007 | 64,141 | 126,503 | 92,050 | ||||||||||||||||||||||
Interest expense | 27,770 | 28,144 | 56,476 | 35,615 | ||||||||||||||||||||||
Equity in (earnings) of unconsolidated subsidiaries | (974) | — | (2,394) | — | ||||||||||||||||||||||
Other (income) expense, net | (88) | 55 | (50) | 28 | ||||||||||||||||||||||
Income from continuing operations before income taxes | 34,299 | 35,942 | 72,471 | 56,407 | ||||||||||||||||||||||
Income tax expense | 5,967 | 10,822 | 15,617 | 15,922 | ||||||||||||||||||||||
Net income from continuing operations | 28,332 | 25,120 | 56,854 | 40,485 | ||||||||||||||||||||||
Income from discontinued operations, net of tax | — | 6,737 | — | 15,449 | ||||||||||||||||||||||
Loss on disposal of discontinued operations, net of tax | — | (89,427) | — | (89,427) | ||||||||||||||||||||||
Net loss from discontinued operations | — | (82,690) | — | (73,978) | ||||||||||||||||||||||
Net income (loss) | 28,332 | (57,570) | 56,854 | (33,493) | ||||||||||||||||||||||
Dividends on preferred stock | (3,600) | (1,040) | (7,200) | (1,040) | ||||||||||||||||||||||
Net income (loss) available to common shareholders | $ | 24,732 | $ | (58,610) | $ | 49,654 | $ | (34,533) | ||||||||||||||||||
Basic earnings (loss) per share | ||||||||||||||||||||||||||
Earnings per common share from continuing operations | $ | 0.99 | $ | 0.97 | $ | 1.99 | $ | 1.59 | ||||||||||||||||||
Loss per common share from discontinued operations | $ | — | $ | (3.33) | $ | — | $ | (2.99) | ||||||||||||||||||
Earnings (loss) per common share | $ | 0.99 | $ | (2.36) | $ | 1.99 | $ | (1.39) | ||||||||||||||||||
Diluted earnings (loss) per share | ||||||||||||||||||||||||||
Earnings per common share from continuing operations | $ | 0.97 | $ | 0.93 | $ | 1.95 | $ | 1.57 | ||||||||||||||||||
Loss per common share from discontinued operations | $ | — | $ | (2.85) | $ | — | $ | (2.70) | ||||||||||||||||||
Earnings (loss) per common share | $ | 0.97 | $ | (1.91) | $ | 1.95 | $ | (1.13) | ||||||||||||||||||
Weighted average shares outstanding - Basic | 25,054 | 24,836 | 24,997 | 24,772 | ||||||||||||||||||||||
Weighted average shares outstanding - Diluted | 29,210 | 29,059 | 29,196 | 27,428 |
AZZ Inc. | |||||||||||||||||||||||
Segment Reporting | |||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
Three Months Ended August 31, | Six Months Ended August 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||
Sales: | |||||||||||||||||||||||
Metal Coatings | $ | 169,837 | $ | 165,849 | $ | 338,631 | $ | 329,293 | |||||||||||||||
Precoat Metals | 228,705 | 240,861 | 450,784 | 284,551 | |||||||||||||||||||
Total sales | $ | 398,542 | $ | 406,710 | $ | 789,415 | $ | 613,844 | |||||||||||||||
EBITDA(1) | |||||||||||||||||||||||
Metal Coatings | $ | 51,647 | $ | 53,026 | $ | 103,510 | $ | 106,695 | |||||||||||||||
Precoat Metals | 46,446 | 49,583 | 89,601 | 59,412 | |||||||||||||||||||
Infrastructure Solutions(2) | 792 | — | 2,190 | — | |||||||||||||||||||
Total Segment EBITDA(3) | $ | 98,885 | $ | 102,609 | $ | 195,301 | $ | 166,107 | |||||||||||||||
(1) See the Non-GAAP disclosure section below for a reconciliation between the various measures calculated in accordance with GAAP to the non-GAAP financial measures. | |||||||||||||||||||||||
(2) Represents Adjusted EBITDA, which includes a settlement for a litigation matter related to the AIS segment recognized during the three months ended August 31, 2023. Infrastructure Solutions segment includes the Company’s equity in earnings from its investment in the AVAIL joint venture, as well as other expenses related to receivables that were retained by the Company following the sale of the AIS business. | |||||||||||||||||||||||
(3) Total segment EBITDA excludes Corporate EBITDA. |
AZZ Inc. | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
(dollars in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
As of | ||||||||||||||
August 31, 2023 | February 28, 2023 | |||||||||||||
Assets: | ||||||||||||||
Current assets | $ | 409,869 | $ | 417,416 | ||||||||||
Property, plant and equipment, net | 516,499 | 498,503 | ||||||||||||
Other assets, net | 1,288,193 | 1,305,560 | ||||||||||||
Total assets | $ | 2,214,561 | $ | 2,221,479 | ||||||||||
Liabilities and Shareholders’ Equity: | ||||||||||||||
Current liabilities | $ | 206,317 | $ | 187,240 | ||||||||||
Long-term debt, net | 1,002,364 | 1,058,120 | ||||||||||||
Other liabilities | 107,803 | 122,659 | ||||||||||||
Shareholders' Equity | 898,077 | 853,460 | ||||||||||||
Total liabilities and shareholders' equity | $ | 2,214,561 | $ | 2,221,479 | ||||||||||
AZZ Inc. | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||
(dollars in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
Six Months Ended August 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net cash provided by operating activities of continuing operations | $ | 118,340 | $ | 42,011 | ||||||||||
Net cash used in investing activities of continuing operations | (42,706) | (1,313,120) | ||||||||||||
Net cash provided by (used in) financing activities of continuing operations | (76,379) | 1,245,096 | ||||||||||||
Cash used in discontinued operations | — | 22,770 | ||||||||||||
Effect of exchange rate changes on cash | 33 | 2,501 | ||||||||||||
Net increase in cash and cash equivalents | (712) | (742) | ||||||||||||
Cash and cash equivalents at beginning of period | 2,820 | 15,082 | ||||||||||||
Less: Cash and cash equivalents from discontinued operations at end of year | — | (3,000) | ||||||||||||
Cash and cash equivalents from continuing operations at end of period | $ | 2,108 | $ | 11,340 |
Three Months Ended August 31, | Six Months Ended August 31, | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | Per Diluted Share(1) | Amount | Per Diluted Share(1) | Amount | Per Diluted Share(1) | Amount | Per Diluted Share(1) | ||||||||||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 28,332 | $ | 25,120 | $ | 56,854 | $ | 40,485 | |||||||||||||||||||||||||||||||||||||||
Less: preferred stock dividends | (3,600) | (1,040) | (7,200) | (1,040) | |||||||||||||||||||||||||||||||||||||||||||
Net income from continuing operations available to common shareholders | 24,732 | 24,080 | 49,654 | 39,445 | |||||||||||||||||||||||||||||||||||||||||||
Impact of after-tax interest expense for convertible notes | — | 2,006 | — | 2,554 | |||||||||||||||||||||||||||||||||||||||||||
Impact of preferred stock dividends | 3,600 | 1,040 | 7,200 | 1,040 | |||||||||||||||||||||||||||||||||||||||||||
Net income and diluted earnings per share from continuing operations | 28,332 | $ | 0.97 | 27,126 | $ | 0.93 | 56,854 | $ | 1.95 | 43,039 | $ | 1.57 | |||||||||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||||||||||||||
Acquisition and transaction-related expenditures(2) | — | — | 2,706 | 0.09 | — | — | 15,320 | 0.56 | |||||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 5,882 | 0.20 | 7,941 | 0.27 | 12,236 | 0.42 | 11,482 | 0.42 | |||||||||||||||||||||||||||||||||||||||
Legal settlement(3) | 5,750 | 0.20 | — | — | 5,750 | 0.20 | — | — | |||||||||||||||||||||||||||||||||||||||
Subtotal | 11,632 | 0.40 | 10,647 | 0.37 | 17,986 | 0.62 | 26,802 | 0.98 | |||||||||||||||||||||||||||||||||||||||
Tax impact(4) | (2,792) | (0.10) | (2,555) | (0.09) | (4,317) | (0.15) | (6,432) | (0.23) | |||||||||||||||||||||||||||||||||||||||
Total adjustments | 8,840 | 0.30 | 8,092 | 0.28 | 13,669 | 0.47 | 20,370 | 0.74 | |||||||||||||||||||||||||||||||||||||||
Adjusted net income and adjusted earnings per share from continuing operations(5) | $ | 37,172 | $ | 1.27 | $ | 35,218 | $ | 1.21 | $ | 70,523 | $ | 2.42 | $ | 63,409 | $ | 2.31 | |||||||||||||||||||||||||||||||
Weighted average shares outstanding - Diluted | 29,210 | 29,059 | 29,196 | 27,428 | |||||||||||||||||||||||||||||||||||||||||||
(1) Earnings per share amounts included in the table above may not sum due to rounding differences. Year-to- date earnings per share does not always represent the sum of the quarters’ earnings per share when the preferred shares for any quarter in the year-to-date period are anti-dilutive. | |||||||||||||||||||||||||||||||||||||||||||||||
(2) Includes expenses related to the Precoat Metals acquisition and the divestiture of 60% of the AVAIL joint venture. | |||||||||||||||||||||||||||||||||||||||||||||||
(3) Related to a settlement for a litigation matter related to the AIS segment that was retained following the sale of the AIS business. | |||||||||||||||||||||||||||||||||||||||||||||||
(4) The non-GAAP effective tax rate for each of the periods presented is estimated at 24.0%. | |||||||||||||||||||||||||||||||||||||||||||||||
(5) Adjusted net income from continuing operations includes $1.0 million and $2.4 million of equity in earnings from the AVAIL joint venture for the three and six months ended August 31, 2023, respectively. |
Three Months Ended August 31, | Six Months Ended August 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income from continuing operations | $ | 28,332 | $ | 25,120 | $ | 56,854 | $ | 40,485 | |||||||||||||||
Interest expense | 27,770 | 28,144 | 56,476 | 35,615 | |||||||||||||||||||
Income tax expense | 5,967 | 10,822 | 15,617 | 15,922 | |||||||||||||||||||
Depreciation and amortization | 20,153 | 21,902 | 38,677 | 33,875 | |||||||||||||||||||
Acquisition and transaction-related expenditures | — | 2,706 | — | 15,320 | |||||||||||||||||||
Legal settlement | 5,750 | — | 5,750 | — | |||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 87,972 | $ | 88,694 | $ | 173,374 | $ | 141,217 |
Three Months Ended August 31, | Six Months Ended August 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Metal Coatings | |||||||||||||||||||||||
Operating income | $ | 45,081 | $ | 44,996 | $ | 90,552 | $ | 90,266 | |||||||||||||||
Depreciation and amortization expense | 6,553 | 8,171 | 12,969 | 16,560 | |||||||||||||||||||
Other income (expense) | 13 | (141) | (11) | (131) | |||||||||||||||||||
EBITDA | $ | 51,647 | $ | 53,026 | $ | 103,510 | $ | 106,695 | |||||||||||||||
Precoat Metals | |||||||||||||||||||||||
Operating income | $ | 39,006 | $ | 36,213 | $ | 76,696 | $ | 42,861 | |||||||||||||||
Depreciation and amortization expense | 7,440 | 13,329 | 12,905 | 16,510 | |||||||||||||||||||
Other income (expense) | — | 41 | — | 41 | |||||||||||||||||||
EBITDA | $ | 46,446 | $ | 49,583 | $ | 89,601 | $ | 59,412 | |||||||||||||||
Infrastructure Solutions | |||||||||||||||||||||||
Operating loss | $ | (5,932) | $ | — | $ | (5,954) | $ | — | |||||||||||||||
Equity in earnings of unconsolidated subsidiaries | 974 | — | 2,394 | — | |||||||||||||||||||
Legal Settlement | 5,750 | — | 5,750 | — | |||||||||||||||||||
Adjusted EBITDA | $ | 792 | $ | — | $ | 2,190 | $ | — | |||||||||||||||
Document and Entity Information Document and Entity Information |
Oct. 10, 2023 |
---|---|
Document & Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | Oct. 10, 2023 |
Entity Registrant Name | AZZ Inc. |
Entity File Number | 1-12777 |
Entity Tax Identification Number | 75-0948250 |
Entity Address, Address Line One | One Museum Place, Suite 500 |
Entity Address, Address Line Two | 3100 West 7th Street |
Entity Address, City or Town | Fort Worth |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 76107 |
City Area Code | 817 |
Local Phone Number | 810-0095 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock |
Trading Symbol | AZZ |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000008947 |
Amendment Flag | false |
Entity Incorporation, State or Country Code | TX |
Document Information [Line Items] | |
Document Period End Date | Oct. 10, 2023 |
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