AZZ Reports Mixed Q2 Results, Cuts Top End Of FY22 Revenue Outlook

AZZ Inc AZZ reported second-quarter FY22 sales growth of 6.4% year-over-year to $216.4 million, missing the consensus of $219.95 million.
Sales by segments: Metal Coatings $129.6 million (+10.7% Y/Y) and Infrastructure Solutions $86.9 million (+0.6% Y/Y).
EPS improved to $0.76 compared to $(0.07) in 2Q21, beating the consensus of $0.62.
The gross margin expanded by 280 bps to 25.5%. EBITDA was $36.7 million, up by $6 million, compared to 2Q21.
The operating income increased to $26.53 million compared to $0.652 million a year ago, and the margin expanded by 1194 bps to 12.3%.
Metal Coatings' operating margin improved by 140 bps to 24.4%, and Infrastructure Solutions improved by 460 bps to 8.1%.
AZZ generated cash from operating activities year-to-date of $37.76 million, compared to $32.17 million a year ago. The company held $15.5 million in cash and equivalents as of August 31, 2021.
Bookings increased at $231.8 million from $208.6 million a year ago. The book-to-sales ratio improved to 1.07, compared to 1.03 in 2Q21. Backlog was at $201.5 million, a decrease of 4.3% Y/Y.
AZZ said it continues to explore a few specific opportunities related to Infrastructure Solutions, with a predominant focus on metal coatings.
FY22 Outlook: AZZ expects sales of $865 million - $925 million (prior view $855 million - $935 million) versus consensus of $924.4 million.
The company expects EPS of $2.90 - $3.20 (previous $2.65 - $3.05) versus consensus of $3.03.
Price Action: AZZ shares closed lower by 0.49% at $54.67 on Monday.

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