Friday, July 12, 2024
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter financial results. For the fiscal year 2025, AZZ reported adjusted first quarter net income of $44.0 million or $1.46 per share compared to $33.4 million or $1.14 per share during the prior year period and our estimate of $38.9 million or $1.32. The consensus EPS estimate was $1.30. Adjusted EBITDA increased 10.2% to $94.1 million representing 22.8% of sales versus 21.8% of sales during the first quarter of FY 2024. Sales of $413.2 million exceeded our $402.6 million estimate and the 24.8% gross margin as a percentage of sales exceeded our estimate of 24.1%.
Balance sheet continues to strengthen. During the first quarter, AZZ generated strong operating cash flows of $71.9 million and further reduced debt by $25 million and is on track to achieve its goal of reducing debt by $60 million to $90 million during the fiscal year. At quarter end, the company’s net leverage was 2.8x trailing twelve months EBITDA. Cash and cash equivalents amounted to $10.5 million. During the quarter, AZZ returned capital to common shareholders in the form of cash dividend payments totaling $4.3 million.
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