The company attributed the increase to higher coil-coating volumes and average selling prices, including vendor price increases passed through to customers. Additional sales from the Washington facility also contributed to growth.

These gains were partially offset by lower volumes in HVAC and appliances, transportation and other end markets.

Segment adjusted EBITDA increased to $53.8 million, producing an adjusted EBITDA margin of 21.2%, an improvement of 100 basis points from the comparable quarter.

Companywide Results

AZZ reported record second-quarter sales of $486.9 million, an increase of 16.7% from the prior-year period.

Its Metal Coatings segment, which includes hot-dip galvanizing operations, reported sales of $233.5 million, up 22.9%.

Metal Coatings growth reflected higher steel-processing volumes across construction, industrial, infrastructure and transportation markets, along with higher average selling prices.

The segment generated adjusted EBITDA of $71.6 million and an adjusted EBITDA margin of 30.7%.

Companywide operating income increased 22.4% to $83.8 million.

Adjusted diluted earnings per share increased 29% to $2.00, while adjusted net income increased 28.1% to $60.1 million.

Reported net income declined to $58.5 million from $89.3 million. AZZ attributed the year-over-year decline primarily to a prior-year gain associated with its investment in AVAIL.

Consolidated adjusted EBITDA increased to $110.9 million, representing 22.8% of sales, compared with $88.7 million and 21.3% of sales in the prior-year quarter.

Manufacturing Investments and Outlook

AZZ said it continues to ramp production at its Washington, Missouri, coil-coating facility.

The company also completed its previously announced $57.5 million acquisition of Seattle Galvanizing during the quarter.

For the first six months of fiscal 2027, AZZ generated $140 million in operating cash flow and invested $37.2 million in capital expenditures.

Full-year capital expenditures are expected to total approximately $80 million to $100 million, including investments in galvanizing capacity and technology improvements across its operating segments.

Following the quarter, AZZ increased its fiscal 2027 financial guidance.

The company now expects annual sales of $1.825 billion to $1.875 billion, compared with its previous outlook of $1.80 billion to $1.85 billion.

Adjusted EBITDA is expected to range from $380 million to $420 million, up from the previous $375 million to $415 million forecast.

Adjusted diluted earnings per share are expected to range from $7.00 to $7.30, compared with the previous $6.75 to $7.15 outlook.

AZZ said the updated guidance reflects its expectations for continued operational performance and contributions from recent investments. 

AZZ's results provide an indicator of demand, pricing and operating conditions in the North American coil coatings market. Higher volumes and improved profitability at Precoat Metals are particularly relevant to industrial coatings suppliers and metal-finishing operations.