AZZ Inc.

Good day and welcome to the AZZ Incorporated Q4 FY 2025 Earnings Conference Call and Webcast. All participants will be in the 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.

Thank you, operator. Good morning. Thank you for joining us today to review AZZ's financial results for the fourth quarter and full fiscal year that ended February 28th, 2025. Joining the call today are Tom Ferguson, President and Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Chief Marketing, Communications, and Investor Relations Officer. After today's prepared remarks, we will open the call for questions. Please note that 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 the company's control. Except for actual results, AZZ's 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 ended February. 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 as a substitute for GAAP financial measures. We refer investors 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, and thank you for joining us. Today, we will discuss AZZ's fiscal 2025 financial results and achievements, as well as our outlook for fiscal 2026. Then we will open up the call for questions. I am pleased to report that our coating segments delivered record sales and profitability for fiscal 2025 due to a combination of business momentum and disciplined execution of our growth initiatives. Metal coatings generated fiscal year 2025 sales of $665 million, while pre-coat metals generated $912 million. Strong sales for the full year were largely based on increased volume as we processed higher tonnage in both fabricated steel and coal coatings. For the full year, our top-line results were primarily driven by infrastructure investments to support community growth, urban expansion, and economic development. More specifically, AZZ's record-breaking performance was driven by growth in bridge and highway construction, including new projects and renovation projects across the U.S., the continued expansion in transmission and distribution, including solar projects, and general construction, which for AZZ includes data centers. Jason will cover our fourth quarter financial results in a moment, but as a reminder, the fourth quarter is typically our weakest season due to the winter holidays and inclement weather that hampers construction activity. During our fourth quarter, which ended February 28, 2025, the construction activity was impacted by significantly more inclement weather days than in a typical year. Collectively, we experienced over 200 days of lost production in the fourth quarter due to adverse weather conditions. David will provide more color on this shortly. In fiscal 2025, metal coatings delivered an EBITDA margin of 30.9%, primarily due to better operating leverage on expanding volumes and improved zinc productivity. As discussed previously, we believe our new margin range for AMC of 27 to 32% is sustainable. Preco metals EBITDA margin of 19.6% exceeded its prior year comparable. demonstrating strength based on increased volume, a more profitable business mix, and improved operational performance. Our strong EBITDA generated in fiscal 2025 converted to cash from operations of $250 million. This robust cash generation allowed us to pay down $110 million of debt and fund our new Greenfield facility near St. Louis, Missouri, which is currently ramping up commercial production as we speak. This year, we plan to continue to pay down debt and strengthen the balance sheet while prioritizing other capital allocation strategies, including paying quarterly cash dividends. We also plan to invest in AZZ's enterprise-wide technologies by enhancing DGS, which is our digital galvanizing system in our galvanizing plants, and CoilZone in the coil coating facilities. These customer-centric technologies continue to elevate service levels and enhance our unique value proposition. as well as provide effective business intelligence reporting for better decision-making, particularly in relation to improving operating productivity and efficiency. AZZ's pipeline of acquisition targets continues to grow, and we are carefully evaluating M&A in markets throughout the United States. We focus on synergistic targets that present attractive risk-adjusted returns for enhancing long-term shareholder value. We are disciplined in our approach, and decide on acquisitions based on timing, targeted valuation, and appropriate balance sheet leverage. After solely focusing on debt reduction, we anticipate closing the single-side bolt-on galvanizing deal during the first quarter. AZZ continues to differentiate with industry-leading market share positions in both segments. We believe our geographic footprint and scale across the U.S. and Canada, as well as technical expertise, reputation for customer service excellence, and longstanding customer relationships, create a durable competitive mode for AZZ. Our three to five year strategy is anchored on organic market share growth, as well as inorganic acquisition growth that we are pursuing for both segments. Under the Trump administration's current tariff mandates, we expect demand for coating solutions of both steel and aluminum, produced domestically, to accelerate. Additionally, in the fiscal of 2026, we will continue to benefit from our tolling model, which insulates us from commodity risks since we do not take ownership of steel or aluminum processed through our facilities. Currently, our zinc and paint supplies have not been impacted by the tariffs. With that, I will turn it over to Jason.