AZZ Inc.

Good day and welcome to the AZZ third quarter fiscal 2025 conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. 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.

Sandy Martin Thank you, operator. Good morning, and thank you for joining us today to review AZZ's financial results for the fiscal 2025 third quarter, which ended November 30, 2024. Joining the call today are Tom Ferguson, President and Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Senior Vice President of Marketing, Communications, and Investor Relations Officer. After today's prepared remarks, we will open the call for questions. Please note the live webcast for today's call 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. By their nature, forward-looking statements 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 supplemental to, not a substitute for, GAAP measures. We refer to the reconciliation from GAAP to non-GAAP measures in today's earnings press release. I would now like to turn the call over to Tom Ferguson.

Good morning. Thank you for joining us, and Happy New Year to you all. Today I will discuss AZZ's third quarter and cover our outlook for the rest of the year. Jason Crawford will review our financial results, and David Nark will provide an industry update on sales to our end markets. Then we'll open up the call for questions. The third quarter's results exceeded our expectations versus how we were feeling as we had entered the quarter. I give our teams tremendous credit for their focus, discipline, and great execution in both segments. We are pleased with both segment teams' ability to sustain margins while generating solid sales growth. Fiscal 2025 sales through the first nine months have been driven mainly by construction projects related to highways, new bridge construction, and infrastructure renovations throughout the U.S. In addition, spending on data centers, reshoring of manufacturing, clean energy initiatives, and power transitions accelerated in calendar 2024, resulting in positive impacts for our business. Our consolidated third quarter sales of $404 million increased by 5.8% versus the prior year's quarter, and this was all organic growth. The metal coating segment increased overall sales by 3.3%, but grew galvanizing at 5.2% when compared to the prior year's third quarter, while the pre-coat metal segment grew sales by 7.6%. Sales momentum in the third quarter was almost entirely based on volume, with higher tonnage processed in both fabricated steel and coil coating. Metal coatings delivered EBITDA margin of 31.5 percent, again exceeding the prior year and our targeted range of 25 to 30 percent, primarily due to higher volume and improved zinc productivity. Pre-coated metals EBITDA margin of 19.1 percent also exceeded the prior year and demonstrated strength primarily due to higher volume, more profitable mix of business, and improved operational performance. In addition, Strong EBITDA resulted in cash flow from operations of $186 million for the first nine months of the fiscal year, which allowed us to make substantial debt repayments of $80 million. Jason will discuss this in more detail, but the strong free cash flow this year allowed us to further deleverage our balance sheet while investing in operations for the future. We continue to hold lean market positions in our galvanized metal coatings and coil coating pre-coat segments. As a specialized metal coatings provider, our strong and enduring competitive mode gives us an advantage through trusted, repeated customer relationships, economies of scale, and innovative customer-centric technology solutions. Our reputation for reliability and excellence in customer service further enhances our value proposition. We are committed to both organic growth and strategic bolt-on acquisitions to maintain and grow our leadership positions. Importantly, We do not own the steel process through our facilities, so we avoid exposure to commodity price risk associated with it. Operating as a highly profitable tolling model, we will continue to strengthen our significant economic moat in metal coatings and pre-coated metals. We plan to continue investing in ATZ's proprietary customer-facing technologies that are utilized at all of our facilities. Our innovative technology platform provide paperless real-time access and improved service transparency. positioning our company as a highly differentiated metal coatings provider and strategic partner to customers throughout North America. Jason will discuss our disciplined approach to capital deployment in a moment. But first, I want to underscore that we continue to pay down debt and return capital to shareholders by consistently paying quarterly cash dividends. As noted previously, we expect to reduce our debt by over $100 million for the fiscal year ending in February. As I mentioned earlier, for the first nine months of our fiscal year, our growth has been 100% organic compared to the prior year. We continue to work the M&A pipeline by carefully evaluating potential acquisition targets to add inorganic growth in each segment. We'll remain patient while considering the best timing, target valuations, and ACC's optimal leverage. Finally, in pursuit of our high ROI capital allocation strategy, We have invested in a durable secular trend supporting the beverage industry's plastic to aluminum conversions. We are finalizing construction milestones of our new aluminum coatings facility in Washington, Missouri. We are currently doing equipment certifications and testing and expect to ramp up the new facility during the first quarter, which begins in March 2025. We're excited about our spring launch of this new facility, particularly as this new facility also demonstrates AZZ's commitment to support a greener future for generations to come. With that, I'll turn it over to Jason.