Azz Inc. · NYSE:AZZ
Azz — Q1 FY2019 Earnings Presentation
11 slides from Azz's earnings presentation, Jul 3, 2018
Slide 1: Fiscal Year 2019 First Quarter Earnings Release Conference Call
Fiscal Year 2019 First Quarter Earnings Release Conference Call July 3, 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: Q1 Fiscal 2019 Upturn
Q1 Fiscal 2019 Upturn • Regained traction in Q1 to start the new fiscal year • Integrated recent acquisitions of Rogers Brothers into Metal Coatings and Lectrus into the Energy segment • Solid Metal Coatings quarter • Record quarterly sales of $115.3 million • Executed operational improvement and pr
Slide 4: Q1 Fiscal 2019 Markets
Q1 Fiscal 2019 Markets • Solid demand in Metal Coatings • Increased pricing on higher zinc and direct labor costs • Focused on improving productivity and efficiency • Closed one small, underutilized plant in West Virginia • Increasing demand for Galvabar, currently scouting for second site • Powder
Slide 5: Q1 Fiscal 2019 Results
Q1 Fiscal 2019 Results (Millions Except for EPS and %) Q1 FY 2019 Q1 FY 2018 % change Revenue $ 262.2 $ 205.3 27.7% Gross Profit $ 58.7 $ 47.4 23.9% Gross Margin 22.4% 23.1% Operating Profit $ 23.7 $ 20.0 18.3% Operating Margin 9.0% 9.8% Net Income $ 15.7 $ 12.1 30.3% Diluted EPS $ 0.60 $ 0.46 30.4%
Slide 6: Q1 Total Company Revenue by Market
Q1 Total Company Revenue by Market Industrial - General Industry, Oil & Gas, Construction Transmission & Distribution Power Generation FY 2019 Expectation 21% 16% Industrial 54% T&D 57% 22% 30% Power Gen Q1 FY2018 Q1 FY2019 $205 million $262 million 6
Slide 7: Q1 FY 2019 Cash Flow Highlights
Q1 FY 2019 Cash Flow Highlights (Millions except for %) Q1 FY 2019 Q1 FY 2018 Cash flows used in operating activities $(12.4) $(15.8) Less: Capital Expenditures $2.8 $10.1 Free Cash Flow $(15.2) $(25.9) Net Income $15.7 $12.1 Free Cash Flow/Net Income (96.8)% (214.0)% Acquisition of subsidiaries, ne
Slide 8: Q1 FY 2019 Segment Results
Q1 FY 2019 Segment Results (Millions except for %) Energy Metal Coatings Segment Segment Q1 FY 2019 Revenue $147.0 $115.3 Operating Income $10.0 $25.2 Operating Margin 6.8% 21.9% Q1 FY 2018 Revenue $113.2 $92.1 Operating Income $6.7 $21.2 Operating Margin 5.9% 23.1% 8
Slide 9: FY2019 Guidance
FY2019 Guidance FY 2019 Revenue $900 - $960 million Earnings per share $1.75 - $2.25 Driven by: • Metal Coatings will have stronger revenue due to inflation, a stronger selling effort, and improved traction on operational improvement initiatives • Metal Coatings income will benefit from stronger emp
Slide 10: FY2019 Risks
FY2019 Risks • Refinery turnarounds for the Fall season do not materialize • Metal Coatings cannot offset zinc and direct labor cost increases with price, and operational execution efforts falter • AZZ’s ongoing recruiting and retention efforts fail to provide enough skilled and semi-skilled craft t
Slide 11: Q&A
Q&A