AZZ Inc.

Good morning and welcome to the AZZ Inc. 3rd Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Sandy Martin of Three-Part Advisors. Please go ahead.

Thank you, operator. Good morning and thank you for joining us today to review AZZ's financial results for the fiscal 2024 third quarter, which ended November 30, 2023. Joining the call today are Tom Ferguson, President and Chief Executive Officer, Philip Schlaum, Chief Financial Officer, and David Nark, Senior Vice President of Marketing, Communications, and Investor Relations. After today's prepared remarks, we will open the call for questions. Please note the live webcast for today's call, which can be found at www.azz.com slash investor dash events. Before we begin, I want to remind everyone that our discussion today will include forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements by their nature are uncertain and outside of the company's control. Except for actual results, our comments containing forward-looking statements may involve risks and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year. These statements are not guarantees of future performance. Therefore, undue reliance should not be placed upon them. Actual results could differ materially from these expectations. In addition, today's call will discuss non-GAAP financial measures. Non-GAAP financial measures should be considered a supplement to and not a substitute for GAAP financial measures. We refer you to the reconciliation from GAAP to non-GAAP measures included in today's earnings press release. I would now like to turn the call over to Tom Ferguson. Tom?

Thank you, Sandy. Good morning, and thank you for joining us to review our fiscal 2024 third quarter results. Today, I'll start by covering company highlights for the quarter before passing it over to Philip to discuss AZZ's detailed financial results and our balance sheet. Then Dave will provide industry commentary on our end markets. And I will conclude our presentation by covering our sustainability efforts and AZZ's full-year outlook before opening the line for questions. AZZ is North America's market leader in hot-dip galvanizing and cold-coating solutions, leveraging our scale and strategic footprint to better serve customers with excellence and expertise. Our leadership has been focused on strong execution this year, and I am pleased to report that the segments have performed exceptionally well through the third quarter. These results are a testament to the strength of our company, talented teams, effective strategic plan, and ongoing commitment to operational excellence. Collectively, these attributes contribute to our ability to provide valuable, differentiated solutions and services to our customers. Turning to our results, total sales for the quarter were $382 million, up 2.2%. Momentum continued for metal coatings with third quarter sales of $163 million, up 3.1% versus last year's quarter. Pre-code metals also grew during the quarter to $218 million, up 1.6% from a year ago. We grew sales organically and improved profitability in the quarter, and I am pleased to report that we continue to effectively secure market share without sacrificing our value pricing discipline. We increased adjusted earnings per share for the quarter by 53% to $1.19 and grew adjusted EBITDA by 23% to $86 million versus prior year. This led to strong cash from operations for the quarter of $63 million. As a result, EBITDA margins were 30% for metal coatings and 18.4% for pre-coated metals during the quarter, both within the stated targeted ranges for each segment. In short, our dedication to delivering best-in-class customer service and ongoing enhancements in operations led to increased sales, improved profitability, and significant cash flow this quarter. We continue to develop and enhance our operational technologies, which sets us apart from the competition. Our digital galvanizing system, or DGS, is AZZ's proprietary technology that connects our 41 galvanizing facilities to the company's ERP system and provides real-time visibility and order tracking to allow superior customer service. Similarly, in PRECO's 13 facilities, CoilZone tracks customers' inventory and provides real-time access to project scheduling. These advanced platforms, along with our outstanding teams focused on providing excellent service, position AZZ as a highly differentiated metal coatings provider to customers throughout North America. As Philip will discuss more in a moment, we are strengthening the balance sheet and plan to continue to deploy capital carefully. We have worked diligently to reduce debt, improve our leverage ratio, and reprice our term loan or revolver to lower interest costs. which continues to reinforce our decision to self-fund the Greenfield Pre-Kept Metals facility in Washington, Missouri, instead of going with a sale-leaseback. We are highly focused on long-term value creation through our sustainable solutions. We believe that by continually investing in our people and relentlessly executing our strategy, we will accelerate AZZ's value creation and ensure sustainability. Our strategic transformation over the last 18 months has been a catalyst for generating significantly higher run rate EBITDA and cash flow. We will continue to scale our business through both organic and inorganic growth, leveraging our highly differentiated value proposition to customers as we create long-term value for our shareholders. With that, I'll turn it over to Philip.