AZZ (NYSE:AZZ) reported record fiscal 2027 second-quarter sales of $486.9 million, up 16.7% from the prior-year period, as both its Metal Coatings and Precoat Metals segments posted double-digit revenue growth. The company also raised its full-year outlook, citing demand in construction, industrial and infrastructure markets, operational execution and contributions from recently completed investments.
For the quarter ended Aug. 31, 2026, AZZ recorded GAAP net income of $58.5 million and adjusted diluted earnings per share of $2.00, up 29% year over year. Consolidated adjusted EBITDA was $110.9 million, representing 22.8% of sales, while operating cash flow totaled $102.8 million.
Segment Sales and Margins Advance
Tom Ferguson, AZZ’s president and chief executive officer, said the company’s zinc-pricing model and surcharge mechanisms continued to mitigate volatility in London Metal Exchange zinc prices. He also said Metal Coatings was seeing favorable demand in infrastructure and industrial markets across multiple regions.
Precoat Metals sales increased 11.5%, supported by higher coil-coating volume, the ramp-up of the company’s Washington, Missouri, facility and pricing initiatives intended to offset increased paint and other input costs. Its adjusted EBITDA margin expanded 100 basis points to 21.2%.
Jason Crawford, AZZ’s chief financial officer, said softer HVAC and appliance demand partly offset gains in Precoat Metals. Those end markets declined a combined 10% during the quarter amid continuing weakness in new residential construction.
Companywide gross profit was $122.1 million, or 25.1% of sales, an 80-basis-point improvement from the prior-year period. Operating income rose to $83.8 million, or 17.2% of sales. SG&A expenses included $2.8 million of acquisition-related costs, primarily connected to the Seattle Galvanizing transaction.
Seattle Acquisition and Capacity Investments
During the quarter, AZZ completed and integrated its acquisition of Seattle Galvanizing Company, establishing a presence in the Pacific Northwest. The acquired platform includes multiple sites, the region’s largest hot-dip galvanizing kettle and a newer spin-galvanizing facility, expanding AZZ’s reach into a five-state region.
Crawford said Seattle Galvanizing contributed for only one month during the quarter and accounted for a limited portion of Metal Coatings’ growth. Ferguson said the business is positioned toward the higher end of AZZ’s facility network in volume and margin profile, though the company did not disclose acquisition-specific revenue or financial results.
AZZ is also pursuing organic capacity expansions. Its recently expanded Crowley, Texas, site is adding capacity in a growing market, while the company has initiated a new hot-dip galvanizing facility in the Tulsa area adjacent to an existing AZZ operation. Ferguson described the Tulsa project as a brownfield expansion tied to a major anchor customer and said similar opportunities are being evaluated.
The company said a typical new galvanizing plant requires roughly $35 million to $50 million of investment, depending on plant type and real estate costs. AZZ also cited expansions in Kansas City and Reno, including groundline-coating capacity in Reno. Crawford said the company’s Metal Coatings network remains at approximately 60% to 70% utilization overall, leaving room for growth while targeted projects address local capacity needs.
At Precoat Metals, Washington, Missouri, continues to ramp in line with expectations. The site has achieved its expected contribution-margin target for the year, according to Ferguson, and AZZ expects it to continue contributing to revenue and profitability in the second half. The facility is working toward targeted utilization with an anchor customer expected to account for 75% of volume, while the company seeks customers for the remaining capacity.
End-Market Trends and Supply Conditions
David Nark, AZZ’s chief marketing, communications and investor relations officer, said construction-related sales increased 15.5%, supported by manufacturing projects including semiconductor and large data-center developments. Industrial sales climbed 39.6% amid utility-scale power demand, while infrastructure sales grew 7.2% on electrical and transmission-and-distribution activity. Transportation sales, including bus and semi-trailer activity, rose about 4%.
Container sales increased 153%, benefiting from the Washington facility’s performance in beer and beverage packaging.
Management said it continues to monitor higher interest rates and concerns surrounding data-center development, but has not seen cancellations or project delays. Ferguson noted that data centers remain a relatively small component of AZZ’s overall business, while transmission, distribution, power-generation and grid-modernization spending continue to support demand.
AZZ also discussed tight flat-roll steel and galvanized-sheet availability affecting customers in its Precoat Metals business. The company does not purchase substrate itself, but it stores customer-owned material and has dedicated resources to help customers locate available supply through mills, service centers and distributors.
Outlook Raised, Debt Reduction Target Updated
Based on its first-half performance and market conditions, AZZ raised its fiscal 2027 outlook. The company now expects:
- Sales of $1.825 billion to $1.875 billion;
- Adjusted EBITDA of $380 million to $420 million;
- Adjusted diluted EPS of $7.00 to $7.30; and
- Debt reduction of $100 million to $140 million during the fiscal year.
The debt-reduction outlook was revised from the company’s prior target primarily because of the Seattle Galvanizing acquisition, Crawford said. AZZ reduced debt by $15 million during the quarter and ended the period with net leverage of 1.3 times trailing 12-month adjusted EBITDA.
Available liquidity stood at $376.4 million as of Aug. 31. The company spent $18.5 million on capital expenditures, repurchased $20 million of stock at an average price of $146.71 per share and increased its quarterly dividend to $0.24 per share.
Ferguson said AZZ expects to continue pursuing bolt-on acquisitions and organic projects in coil coating and hot-dip galvanizing, while maintaining a disciplined approach to capital deployment.
About AZZ (NYSE:AZZ)
AZZ Inc is a provider of metal coating solutions serving customers primarily in North America. The company operates through its Metal Coatings and Precoat Metals segments, helping protect and enhance the performance, appearance, and durability of steel and other metal products used across a range of industries.
Through its Metal Coatings segment, AZZ provides hot-dip galvanizing, powder coating, anodizing, plating, and related coating services. These treatments are used for corrosion protection and finishing applications involving infrastructure, construction, industrial, transportation, and other metal products.
Precoat Metals provides coil coating services for steel and aluminum products before they are fabricated.
