azz-20200821
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
August 21, 2020
Date of Report (Date of earliest event reported)
AZZ Inc.
(Exact name of Registrant as specified in its charter)
Texas1-1277775-0948250
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
One Museum Place, Suite 500
3100 West 7th Street
Fort Worth, Texas 76107
(Address of principal executive offices) (Zip Code)
(817) 810-0095
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class  Trading SymbolName of each exchange on which registered
Common Stock  AZZNew York Stock Exchange
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 7.01 Regulation FD Disclosure.

AZZ Inc. (the "Company") has prepared presentation materials (the "Presentation Materials") that management intends to use from time to time on and after August 22, 2020 in presentations about the Company's performance and operations. The Company may use the Presentation Materials in presentations to current and potential investors, lenders, creditors, insurers, vendors, customers, employees and others with an interest in the Company and its business. A copy of the Presentation Materials is furnished as Exhibit 99.1 hereto and incorporated herein by reference into this Item 7.01.

The information in the Presentation Materials is summary information that should be considered within the context of the Company's filings with the Securities and Exchange Commission and other public announcements that the Company may make by press release or otherwise from time to time. The Presentation Materials speak as of the date of this Current Report on Form 8-K. While the Company may elect to update the Presentation Materials in the future to reflect events and circumstances occurring or existing after the date of this Current Report, the Company specifically disclaims any obligation to do so.

The information in this Item 7.01 is being furnished and shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

The following exhibit is filed as part of this report.
ExhibitDescription
99.1



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AZZ Inc.
Date: August 21, 2020

By: /s/ Philip A. Schlom
Philip A. Schlom
Chief Accounting Officer and Interim Chief Financial Officer








 azzinvestorrelationsdeck
AZZ Inc. Investor Presentation August 2020

 
INVESTOR PRESENTATION Safe Harbor Statement Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Certain factors could affect the outcome of the matters described herein. This presentation may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our products and services, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the metal coatings markets. In addition, within each of the markets we serve, our customers and our operations could potentially be adversely impacted by the ongoing COVID-19 pandemic. We could also experience fluctuations in prices and raw material cost, including zinc and natural gas which are used in the hot dip galvanizing process; delays in our supply chain vendors; customer requested delays of our products or services; delays in additional acquisition opportunities; currency exchange rates; adequacy of financing; availability of experienced management and employees to implement AZZ’s growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; economic volatility or changes in the political stability in the United States and other foreign markets in which we operate; acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business in AZZ’s Annual Report on Form 10-K for the fiscal year ended February 29, 2020 and other filings with the Securities and Exchange Commission (“SEC”), available for viewing on AZZ’s website at www.azz.com and on the SEC’s website at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. 2

 
INVESTOR PRESENTATION Overview AZZ is a global provider of galvanizing and metal coating services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. Significant Barriers to Solid Operating History Strong Performance Valuation Entry • 33 Consecutive Years of Profitability • Largest North American Galvanizer • Double Digit Top- and Bottom-Line • Trading Discount to Comparable • Revenue 10-year CAGR – 12% • 48 Metal Coatings Plants Growth Group: • Significant Cash Generation • Large Network of Plants – Economies • Record Fiscal Year 2020 Revenue: $1.1 • EV/EBITDA: 33% • Industry Leading Operating Margins of Scale and Quick Turnarounds Billion, up 14.5% • EV/Sales: 25% • Solid Balance Sheet (<24hrs) • Adjusted Net Income: $71.3 million, up 39% • Debt to Equity Ratio: 0.32x • ~4,000 Customers • DGS: High-tech Solutions Outperform • Adjusted EBITDA: $156.3 million, up *Data as of July 6, 2020 Competitors 22% 3

 
INVESTOR PRESENTATION AZZ at a Glance Company Profile Fiscal Year 2020 Results Headquarters Ft. Worth, Texas By Sales By Operating Income (in millions) (in millions) FY2020 Sales $1.06 Billion $32,845 23% Market Cap* $910 million $562,828 $498,989 53% 47% $107,926 77% Facilities 65 Total Metal Coatings Energy Metal Coatings Energy 3,923 Employees* *As of August 13, 2020 4

 
INVESTOR PRESENTATION COVID-19 Update Impact on Financial  Suspended previously issued FY2021 guidance Results  Energy platform has been negatively affected by turnaround deferrals and lower project bookings due to customer slow-downs  Cash balance of $26.4 million as of Q1 FY 2021 Balance Sheet /  Debt balance of $219.0 million at end of Q1 FY2021, EBITDA of $24.5 million at end of Q1 FY2021 Liquidity  Available debt capacity of $342.3 million on revolving credit facility at end of Q1 FY2021  North America – All plants remain open and operating  Continued travel limitations Operational Impacts  Monitoring and adhering to WHO, CDC, and state agency guidelines for cleaning and disinfecting, social distancing, health and safety, PPE  Temporarily suspended revolving debt payments during Q1 FY2021 to accumulate cash on Balance Sheet Mitigation  Adjusted personnel to align to reduced customer volume utilizing state work-share programs, furloughs and where necessary Efforts reductions in force  Accessed Cares Act provision for deferrals of employer portion of FICA taxes to 2022 and 2023  Paid quarterly dividends in Q4 FY2020, and Q1 FY2021 Capital Allocation  No share repurchases during Q1 FY2021 Decisions  Continuing to support capital expenditures for safety and growth initiative projects Situational  AZZ’s Leadership team continues to be direct contact with the White House, CDC, and other state and governmental agencies. Awareness 5

 
INVESTOR PRESENTATION Strategic Direction • Long term strategy to grow Metal Coatings organically and with a robust acquisition program, while targeting 21-23% Operating Margins • Focus on operating excellence and providing outstanding customer service • Assumes continued inorganic growth in both Galvanizing and Surface Technologies • Energy will focus on operational excellence (target operating margins 10-15% range) and profitable growth in its core businesses while divesting or exiting the non-core • Specialty Welding will grow through international expansion, offering the best customized welding technology, and reducing dependence on the nuclear market space • Electrical businesses will focus on improving profitability and focus more on domestic market growth 6

 
INVESTOR PRESENTATION Metal Coatings Energy Segment Galvanizing, Surface Technologies Electrical Products Industrial Solutions 1 2 3 Multiple Infrastructure Markets Industrial, T&D, Power, Electric Utility Refinery & Power Hot Dip Galvanizing E-houses, Switchgear, Medium and Specialty Welding, Powder Coating, Plating, Anodizing High Voltage Bus Duct, Hazardous Duty Maintenance & Repair Services Lighting, Tubular Products 7

 
INVESTOR PRESENTATION Metal Coatings The Metal Coatings Segment provides hot-dip 1 galvanizing, powder coating, plating and other metal coatings to the steel fabrication industry through 48 facilities located throughout the United States and Canada 8

 
INVESTOR PRESENTATION Electrical Utilities Industrial OEMs Recreation Petrochemical Agriculture Bridge & Highway Construction 9

 
INVESTOR PRESENTATION Metal Coatings’ leading hot-dip galvanizing market position in North America offers adjacency opportunities in corrosion protection. North America’s largest galvanizer • 41 locations throughout the U.S. and Canada • Differentiate on service & quality Expand into market Inorganic growth: adjacencies in North America: • Grow share of wallet by offering • Continue to acquire Hot-Dip galvanizing additional services: and Surface Technologies capabilities in select markets within North America. • Powder coating, plating, anodizing, spinning, etc. • Several opportunities in the pipeline. New Product Introduction • Leverage galvanizing expertise to launch new products to support North American infrastructure renewal. • Spin galvanizing. 10

 
INVESTOR PRESENTATION The Energy Segment is a manufacturer of specialty electrical equipment focusing on safe and reliable transmission of power from generation sources to end customers, and a specialty welding service provider that ensures the safety and reliability of critical infrastructure in the energy markets worldwide 11

 
INVESTOR PRESENTATION 2 AZZ builds, maintains, rehabilitates and strengthens electrical and industrial infrastructure globally Enclosure Systems Switchgear Systems High Voltage Bus Medium Voltage Bus Hazardous Duty Lighting Tubular Products • Manufacturer of custom • Leading independent • Global leader in high-voltage • Innovative medium voltage • Harsh and Hazardous Duty • Producer of API tubular modular electrical buildings provider of 38kV switchgear SF6 gas insulated bus bus duct products to meet a Lighting manufacturer with products from 1” through 2 (“e-houses”), as well as relay products variety of demands 75 year history 1/16” • Integration of customer panels furnished equipment • Voltage ranges from 115kV • Product line includes isolated • LED, HID, and incandescant • Full length tubing as well as • Ballistic, HEMP options to 1,200kV phase duct, segregated and product lines pup-joints • Padmount and Arc-Resistant non-segregated phase duct • 3 U.S. locations (Pittsburg, Switchgear • Location in Medway, • Manufacturing location in • Manufacturing location in Kansas, Chattanooga, Massachusetts and China • Manufacturing location in Houston, Texas serving the Crowley, Texas serving the • 2 U.S. locations (Fulton, Tennessee, and Millington, serving worldwide market Jackson, Mississippi worldwide market worldwide market Missouri and Oshkosh, Maryland) serving 48 Wisconsin) serving 48 contiguous states and contiguous states and Canada Canada • Utility • Utility • Transmission & Distribution • Power Generation • Food Processing • Oil and gas drilling • Transmission & Distribution • Transmission & Distribution • Transmission & Distribution • Oil and gas drilling • Industrial • Industrial • Industrial • Industrial • Data Center • Energy Storage 12

 
INVESTOR PRESENTATION Worldwide leader in developing and delivering specialized maintenance solutions through automated welding, weld cladding and weld overlay technologies that extend the lifetime and 3 maximize the value of assets throughout the energy industry. Coke Drum Repair Waterwall Services Heater and Furnace Services Boiler Services Pressure Vessel Services Pipe and Piping Services • Industry leading life • World's largest • Specialized machine • Boiler life extension • Permanent repair • The largest provider extension and repair installed base for the welding solutions solutions that are solutions that extend of machine orbital processes to address mitigation of fireside specifically configured industry standards. operational lifespan of pipe welding services low cycle fatigue corrosion. to address difficult U- a wide range of for refineries and failure in coke drums. bend welds found in pressure vessels. other power heaters and furnaces. generation plants. 13

 
Financial Overview 14

 
INVESTOR PRESENTATION Capital Allocation Focused on Growth In millions FY2020 Capital Deployment • New business and product lines $60.6 Capital • Systems and technology Expenditures • Safety, Health and Environmental • Strategic fit Growth • Accretive within the first year Acquisitions • North American market focus $35.0 • Resumed share purchases in fourth Share quarter of FY2020 • Suspended share repurchases $17.8 Repurchases during Q1 FY2021 $5.8 • Continued to pay quarterly Dividends dividends in Q4 FY2020, and Q1 FY2021 Shareholder Return Shareholder Capital Expenditures Acquisitions Share Repurchases Dividends 15

 
INVESTOR PRESENTATION Full Year Financial Guidance FY2021 Range Key Drivers: In millions , except for EPS Metal Coatings:  COVID-19 impact on future quarters Revenue $970-$1,060  Lower zinc costs & Digital Galvanizing System Suspended FY2021 Guidance Energy: $2.65-$3.15  Fall refining turnaround uncertainty Earnings Per Share  Refinery utilization remains low  Order uncertainty for Electrical equipment 16

 
INVESTOR PRESENTATION Q1 FY2021 Summary - Consolidated In $millions, except per share amounts Revenue Net Income Diluted EPS -26.2% -74.0% -73.9% $289.1 $0.81 $213.3 $21.3 $0.21 $5.5 FY2020 FY2021 FY2020 FY2021 FY 2020 FY2021 • Lack of spring refining turnarounds • Industrial operating leverage • Improved use of cash • Slowing electrical product demand • Low demand for Surface Technologies • Working Capital consistency • Lower Surface Technologies activity • Reduced corporate expenditures • Continued payment of dividends 17

 
INVESTOR PRESENTATION Q1 FY2021 Segment Results – Metal Coatings In millions $ except percentages Revenue Operating Income Operating Margin Key Statistics -2.6% -14.7% -300 bps $122.2 $122.2 FY2020 Revenue $119.0 $29.4 24.1% $25.1 21.1% Organic $(7.6) Acquisitions $4.4 FY2021 Revenue $119.0 FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 Segment Summary: • Galvanizing business remained open for business as “essential infrastructure” • Revenue decline driven by COVID-19 impact – Surface Technologies customers temporarily shuttered operations • Lower zinc costs in Galvanizing were offset by lower productivity levels at Surface Technologies • Operating Margins of 21.1%, compared to 24.1% for same quarter in the prior year result of inefficiencies due to COVID-19 18

 
INVESTOR PRESENTATION Q1 FY2021 Segment Results – Energy In millions $ except percentages Revenue Operating Income Operating Margin Key Statistics -43.5% -108.3% -860 bps $167.0 FY 2020 Revenue $167.0 $12.6 7.5% FY2020 Book to Ship .82 to 1 $94.3 FY2021 Revenue $94.3 FY2021 Book to Ship .89 to 1 -$1.0 -1.1% FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 Segment Summary: • Industrial Platform impacted by delay of spring turnarounds • Unable to reduce costs in line with significantly lower demand in Industrial sector • Electrical orders down due to lower demand for our products as customers delayed placing orders • China backlog shipped at a slower pace due to COVID-19 restrictions 19

 
INVESTOR PRESENTATION 20

 
Thank You

 
v3.20.2
Document and Entity Information Document and Entity Information
Aug. 21, 2020
Document & Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Aug. 21, 2020
Entity Registrant Name AZZ Inc.
Entity Incorporation, State or Country Code TX
Entity File Number 1-12777
Entity Tax Identification Number 75-0948250
Entity Address, Address Line One One Museum Place, Suite 500
Entity Address, Address Line Two 3100 West 7th Street
Entity Address, City or Town Fort Worth
Entity Address, State or Province TX
Entity Address, Postal Zip Code 76107
City Area Code 817
Local Phone Number 810-0095
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol AZZ
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000008947
Amendment Flag false
Document Information [Line Items]  
Document Period End Date Aug. 21, 2020