AZZ Inc.

Good day and welcome to the AZZ Incorporated Second Quarter Fiscal Year 2027 Earnings Conference Call and Webcast. 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 a touch-tone phone. 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 Philip Cooper with three-part advisors. Please go ahead.

Good morning. Thank you for joining us today to review AZC's fiscal 2027 second quarter results for the period ended August 31st, 2026. 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 of today's call is available at www.azz.com forward slash investor dash events. Before we begin, I would like to remind everyone that our discussion today will include forward-looking statements made in accordance with 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 time-to-time in documents filed by AZZ with the Securities and Exchange Commission, including the latest annual report on Form 10-K. 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, which should be considered supplemental and not as a substitute for GAAP financial measures. We refer shareholders to our reconciliations from GAAP to non-GAAP measures contained in today's earnings press release. I would now like to turn the call over to Tom Ferguson.

Thank you, Philip, and good morning. We delivered record second quarter sales up 16.7% from the prior year. Reflecting strong execution, a resilient business model, and the strength of our growth strategy. Our performance and market demand continue to validate the investments we made to expand capacity, strengthen customer partnerships, and enhance our market positions. Our segments achieved record quarterly sales. Metal coating sales increased 22.9%, driven by higher volumes across the construction, industrial, infrastructure, and transportation end markets. along with inflationary price increases passed through by our team. Segment adjusted EBITDA margin remains strong at 30.7%, benefiting from operating leverage on record sales and volume. While LME Zinc prices have increased, our pricing model and associated surcharge mechanisms continue to mitigate raw material price volatility. Preco metal sales increased 11.5%, driven by volume growth from the continued ramp of our Washington, Missouri facility, and value-added pricing initiatives, primarily to offset inflationary pressures on paint and other items. Segment-adjusted EBITDA margin expanded 100 basis points to 21.2%, reflecting higher throughput and solid operational execution. During the second quarter, we completed the acquisition and integration of Seattle Galvanizing Company, establishing AZZ's presence in the Pacific Northwest. This acquisition expands our position in an attractive region that is experiencing favorable demand in the infrastructure, industrial, and construction markets. The acquisition has a high-quality multi-site platform, including the region's largest hot-dip galvanizing kettle and a new spin galvanizing facility, extending our footprint into a new five-state region. Our growth strategy balances disciplined acquisitions with value-accretive organic investments that strengthen our competitive position. In metal coatings, we continue to expand capacity where demand fundamentals remain strong and returns are attractive. Our recently expanded Crowley, Texas facility is providing additional capacity in a strong growth market, reinforcing our ability to capture demand and generate attractive returns on invested capital. We'll discuss USN market demand in more detail in a moment. We have also initiated a new greenfield hot dip galvanizing plant in the Tulsa area linked to a major Anchor customer. We have other greenfields in the works and hope to be able to discuss those in more detail later this fiscal year. The strength in infrastructure and the long-term outlook is creating opportunities for us to partner with major customers as they expand their capacity. We also continue to advance strategic business development initiatives through our de-fragilization opportunities. These partnerships allow manufacturers to divest non-core galvanizing and coal coating operations while securing a long-term relationship with AZZ. These opportunities offer AZZ a capital-efficient pathway to expand capacity, deepen customer relationships, and gain market share. Our pipeline remains active and provides a meaningful opportunity for future value creation. At Pre-Coat Metals, the Washington, Missouri facility continues to ramp as planned. We remain on track to reach targeted utilization levels with our strategic partner while commercializing the remaining capacity. The facility has already achieved its expected contribution margin targets for the year, and performance within the beer and beverage packaging category remains solid. Washington has already become an important contributor to PreCode's future earnings growth, and we look forward to its continued progress. Technology remains a key enabler of our strategy. We are leveraging AI and proprietary digital tools to enhance productivity, improve operational efficiency, and scale our businesses more effectively. By integrating AI into our enterprise platforms, we are streamlining software development and operational workflows while accelerating better data-driven decisions. Across both segments, our digital platforms are increasing visibility and improving operational consistency. Our metal coatings digital galvanizing system and Precoke Metals' CoilZone platform strengthen the customer experience while reinforcing our competitive advantages and operational excellence. We will continue investing in value-accretive opportunities, allocating capital with discipline, expanding our market leadership and delivering exceptional customer service. With a strong balance sheet, differentiated capabilities and a proven operating model, we believe we have the right platform to benefit from the long-term investment trends shaping our end markets. These trends provide a meaningful opportunity to drive profitable growth and create long-term shareholder value. With that, I'll turn it over to Jason.