Azz Inc. · NYSE:AZZ
Azz — Q3 FY2019 Earnings Presentation
11 slides from Azz's earnings presentation, Jan 8, 2019
Slide 1: Fiscal Year 2019 Third Quarter Earnings Release Conference Call
Fiscal Year 2019 Third Quarter Earnings Release Conference Call January 8, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements herein about our expectations of future events or results constitute forward- looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology suc
Slide 3: Q3 Fiscal 2019 Upturn
Q3 Fiscal 2019 Upturn • Revenue growth through customer focus and new opportunities • Top-line revenue growth of 15.1% • Levering newly acquired facilities in Electrical Group • Finalized WOFE in China and Joint Venture in Saudi Arabia • Remain highly active on M&A opportunities • Metal Coatings Seg
Slide 4: Fiscal 2019 Markets
Fiscal 2019 Markets • Solid demand in Metal Coatings Segment • Infrastructure spend increasing throughout year • Powder Coating regional demand is growing • Increasing demand for Galvabar, scouting for second site to match demand and increase critical mass • Energy Segment full year outlook good • I
Slide 5: Total Company Revenue by Market
Total Company Revenue by Market Industrial - General Industry, Oil & Gas, Construction Transmission & Distribution Power Generation 17% FY 2019 Expectation 25% 22% Industrial 61% 15% 60% T&D Power Gen Q3 FY2018 Q3 FY2019 $208.2 million $239.5 million 5
Slide 6: Q3 Fiscal 2019 Consolidated Results
Q3 Fiscal 2019 Consolidated Results (Millions Except for EPS and %) Q3 FY 2019 Q3 FY 2018 % change Revenue $239.5 $208.2 15.1% Gross Profit $49.8 $31.1 59.9% Gross Margin 20.8% 14.9% Operating Profit $22.8 $1.6 1,365.3% Operating Margin 9.5 % 0.7% Net Income (Loss) $15.4 $(0.2) Diluted EPS $0.59 $ (
Slide 7: YTD FY 2019 Cash Flow Highlights
YTD FY 2019 Cash Flow Highlights (Millions except for %) YTD FY19 YTD FY18 Cash flows provided by operating activities $60.4 $38.7 Less: Capital Expenditures $(13.7) $(21.5) Free Cash Flow $46.7 $17.2 Net Income $42.4 $21.7 Free Cash Flow/Net Income 110.1% 79.3% Acquisition of subsidiaries, net of c
Slide 8: Q3 FY 2019 Segment Results
Q3 FY 2019 Segment Results (Millions except for %) Energy Metal Coatings Segment Segment Q3 FY 2019 Revenue $132.0 $107.5 Operating Income $11.5 $18.3 Operating Margin 8.7% 17.0% Q3 FY 2018 Revenue $107.0 $101.1 Operating Income (Loss) $(12.1) $21.7 Operating Margin (11.3)% 21.4% 8
Slide 9: Updated FY2019 Guidance
Updated FY2019 Guidance FY 2019 Revenue $940 - $960 million Earnings per share $1.95 - $2.20 Updated from previous guidance of Revenue of $930- $970 million and EPS of $1.90-$2.25 per annum • Narrowing our guidance as we close out the fiscal year with confidence in our fourth quarter expectations •
Slide 10: FY2019 Risks
FY2019 Risks • Metal Coatings cannot offset zinc and direct labor cost increases with price, and operational execution efforts falter • Q4 shipments experience customer-driven delays, pushing earnings into FY 2020 • AZZ’s ongoing recruiting and retention efforts fail to provide enough skilled and se
Slide 11: Q&A
Q&A