AZZ Inc (NYSE:AZZ) stock fell 1.05% (As on July 12, 11:47:00 AM UTC-4, Source: Google Finance) though the company posted better than expected results for the first quarter of FY 23.  Operating income increased to $39.9 million, or by $9.2 million, compared to operating income of $30.7 million during last year’s comparable first quarter period.  Net income for the first quarter increased $1.7 million to $24.1 million, compared to net income of $22.3 million for the first quarter in the prior fiscal year, driven by stronger operational performance in each of the segments, partially offset by higher interest expense, higher depreciation and amortization, and $12.6 million in acquisition and divestiture-related corporate costs. Bookings for the three-month period increased to $317.3 million, compared to $229.8 million for the first quarter last year. The book-to-sales ratio improved to 1.01, compared to 1.00 in last year’s comparable period.  Backlog at the end of the first quarter was $307.4 million, an increase of 65.2% as compared to backlog at the end of the first quarter in the prior year. The increase in backlog of $121.3 million, to $307.4 million versus prior year is largely attributable to growing demand for the electrical products.

AZZ in the first quarter of FY 23 has reported the adjusted earnings per share of $1.40, beating the analysts’ estimates for the adjusted earnings per share of $1.03. The company had reported the adjusted revenue growth of 36.8 percent to $314.4 million in the first quarter of FY 23, beating the analysts’ estimates for revenue of $268.09 million.

Meanwhile, on June 23, 2022, AZZ and Fernweh Group LLC, had jointly announced that they entered into a definitive agreement whereby AZZ will contribute its AZZ Infrastructure Solutions segment to AIS Investment Holdings LLC (the “AIS JV”), and sell a 60% interest in the AIS JV to Fernweh at an implied enterprise value of $300 million. The valuation represents approximately 8.1x AIS LTM 2/28/2022 adjusted EBITDA of roughly $37 million, and is expected to result in cash proceeds to AZZ of approximately $228 million. The transaction is expected to close before the end of 2022, and is subject to certain purchase price adjustments, obtaining the requisite governmental approvals and other customary closing conditions and approvals.

The company anticipates 2nd quarter sales to be within the range of $485 million and $510 million, and EBITDA to be within the range of $90 million to $110 million.