AZZ Inc (NYSE:AZZ) stock rose 0.63% (As on January 10, 11:29:40 AM UTC-4, Source: Google Finance) after the company surpasses market’s expectations for both topline and bottom-line for the third quarter of FY 24. The Company generated significant operating cash of $180.9 million for the year’s first nine months through improved earnings and disciplined working capital management.  At the end of the third quarter, net leverage was 3.1x TTM EBITDA.  During the year-to-date period ended November 30, 2023, the Company paid down debt of $85 million and returned cash to common shareholders through cash dividend payments totaling $12.8 million.  Capital expenditures were $66.9 million year-to-date, and full fiscal year capital expenditures are expected to be approximately $119 million. Further, the company’s greenfield plant construction in Washington, Missouri, is progressing, and is continuing to track to the timeline and budget. Additionally, the company has recently repriced the terms of the Senior Secured Revolver Credit Agreement, resulting in lower interest costs moving forward.

Moreover, AZZ Metal Coatings sales increased year-over-year by 3.1% to $163.2 million, due to the progression of infrastructure spending and value-pricing strategies.  Adjusted EBITDA of $49.0 million, or 30.0% of sales, reflects results within the 25-30% targeted Adjusted EBITDA range.   AZZ Precoat Metals sales of $218.4 million increased year-over-year by 1.6% despite lower volume in HVAC, transportation, and container end markets.  Average selling price increased 4% compared to the same quarter last year, driven by value-pricing initiatives and a shift in sales mix.  EBITDA of $40.3 million, or 18.4% of sales, increased 240 basis points from the prior year quarter and within the targeted range of 17-22%.

AZZ in the third quarter of FY 24 has reported the adjusted earnings per share of $1.19, beating the analysts’ estimates for the adjusted earnings per share of 99 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 22 percent to $381.6 million in the third quarter of FY 24, beating the analysts’ estimates for revenue of $378 million. Consolidated Adjusted EBITDA margin grew to 22.6%, driven by a favorable mix and a continuation of improvements in operational efficiencies over the prior year.

AZZ expects full-year earnings to be in the range of $4.15 to $4.35 per share, with revenue in the range of $1.45 billion to $1.55 billion. FY 24 Adjusted EBITDA is now expected to be in the range of $315 – $335 million.