🧾 What This Document Is

This is an 8-K filing from AZZ Inc., acting as a press release to announce their fourth quarter and full-year fiscal 2026 results (the year ending February 28, 2026). It includes the official, audited financial statements that will be in their annual 10-K report. Think of it as the company's formal "report card" for investors.

🏢 What The Company Does

👉 In simple terms, AZZ is the leading independent company in North America that protects and finishes metal. They have two main businesses:

• Metal Coatings: They hot-dip galvanize steel (dip it in molten zinc to prevent rust). This is crucial for construction, electrical towers, and industrial structures.
• Precoat Metals: They coil coat steel and aluminum (apply a finish to metal coils before they're formed into products). This is used in buildings, appliances, and HVAC systems. Essentially, they make essential metal products last longer and look better.

💰 Financial Highlights: A Record Year

This was a landmark year for AZZ, with record sales and profits.

Full Year FY2026 vs. FY2025:

• Total Sales: $1.65 billion, up 4.6%.
• Segment Sales:
  • Metal Coatings: $758.7 million (↑14.1% 🔥) – Strong growth from infrastructure demand.
  • Precoat Metals: $891.4 million (↓2.3%) – Impacted by weaker construction and HVAC markets.
• Profitability (GAAP): Net Income was $317.3 million, a huge 146% jump. But this number is messy. It was inflated by a one-time gain from selling their stake in the AVAIL joint venture.
• Profitability (Adjusted): To see the true core business, look at Adjusted Net Income of $187.1 million (↑19.3%) and Adjusted Diluted EPS of $6.19 (↑19.0%).
• Cash Engine (Adjusted EBITDA): The company generated $367.6 million in cash from operations before interest and taxes, a solid 22.3% margin on sales.

Why it matters: The headline GAAP number is distorted by a one-time event. The adjusted figures tell the real story: solid, mid-teens growth in the core business, powered by the Metal Coatings segment.

🚀 Key Moves & Capital Allocation

AZZ used its strong cash flow to significantly strengthen its financial foundation.

• Debt Crusher: They paid down $385.3 million in debt. This slashed their "net leverage ratio" (a key measure of debt burden) from 2.5x down to a very healthy 1.4x.
• Returning Cash: They bought back $20.0 million of their own stock and paid $23.1 million in cash dividends.
• Strategic Investment: They spent $30.1 million on a small acquisition and $80.8 million on capital expenditures, including finishing a new plant in Washington, Missouri.
• Cash Windfall: A huge portion of their cash came from $273.2 million in final distributions from selling their stake in the AVAIL joint venture.

👉 The big picture: Management used the windfall from the JV sale to fortify the balance sheet (debt down) and reward shareholders, while still investing in growth.

⚖️ Segment Breakdown: Two Different Stories

AZZ’s performance was a tale of two businesses.

• 🔥 Metal Coatings (The Star): Sales soared 14.1% to $758.7 million. Its EBITDA margin was 31.0%, meaning it keeps 31 cents of every dollar as cash profit. This was driven by strong demand for infrastructure projects.
• 📊 Precoat Metals (The Steady Player): Sales dipped 2.3% to $891.4 million. Its EBITDA margin was 19.8%. This segment is more exposed to cyclical markets like residential construction and HVAC, which were soft.

Why it matters: Metal Coatings is the high-growth, high-margin engine right now. Precoat Metals, while stable, is facing headwinds from its end markets.

🔮 What's Next: Fiscal 2027 Guidance

AZZ is confident and provided full-year guidance for FY2027:

• Sales: $1.725 - $1.775 billion
• Adjusted EBITDA: $360 - $400 million
• Adjusted Diluted EPS: $6.50 - $7.00

Key assumptions include:

• The new Washington plant will boost profits.
• They will spend $80 - $100 million on more growth projects (new galvanizing capacity).
• They plan to pay down $130 - $170 million more in debt.
• Guidance excludes any potential mergers or acquisitions.

👉 What this signals: Management expects continued growth, fueled by U.S. infrastructure spending and their recent investments. They are prioritizing growth and financial discipline.

🧠 The Analogy

AZZ is like a specialized highway maintenance and armor-plating company for the industrial world. This year, their "armor-plating" division (Metal Coatings) boomed as new bridges and power lines were built. Their "highway striping" division (Precoat Metals) slowed a bit as fewer new housing developments started. Management took a big one-time bonus from selling an old partnership, used it to pay off their mortgage, and then went back to focusing on their core, growing business.

🧩 Final Takeaway

AZZ delivered a record year driven by strong infrastructure demand for its core metal coatings. Management smartly used a large cash windfall to drastically reduce debt and strengthen the company's financial foundation, all while guiding for continued, disciplined growth in the year ahead. The star performer is the Metal Coatings segment.