Q3 2024 AZZ Inc Earnings Call
Good morning, and welcome to the AZZ, Inc. Third quarter 'twenty 'twenty four earnings conference call.
Good morning and welcome to the AZZ Inc. third quarter 2024 earnings conference call. All participants will be in
All participants will be in listen only mode.
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Speaker Change: I would now like to turn the conference over to Sandy Martin of Report Advisors, please go ahead.
I'd now like to turn the conference over to Sandy Martin reported advisors. Please go ahead.
Sandy Martin: Thank you, Operator. Good morning, and thank you for joining us today to review AZZ's financial results for the fiscal 2024 third quarter, which ended November 30, 2023. Joining the call today are Tom Ferguson, President and Chief Executive Officer, Philip Schlamm, Chief Financial Officer, and David Nark, Senior Vice President of Marketing, Communications, and Investor Relations.
Thank you operator, good morning, and thank you for joining us today to review a Z financial results for the fiscal 'twenty 'twenty four third quarter, which ended November 32000 twenty-three joining the call today are Tom Ferguson, President and Chief Executive Officer, Phillip Swan Chief Financial Office.
Sure Ann.
David <unk> Senior Vice President of marketing Communications and Investor Relations. After today's prepared remarks, we will open the call for questions. Please note. The live webcast for today's call, which can be found at www Dot AZZ dot com slash investor cash events before we begin I want to.
Sandy Martin: After today's prepared remarks, we will open the call for questions. Please note the live webcast for today's call, which can be found at www.azz.com slash investor dash event.
Sandy Martin: Before we begin, I want to remind everyone that our discussion today will include forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Remind everyone that our discussion today will include forward looking statements made under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Sandy Martin: Forward-looking statements, by their nature, are uncertain and outside of the company's control. Except for actual results, our comments containing forward-looking statements may involve risks and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year. These statements are not guarantees of future performance. Therefore, undue reliance should not be placed upon them.
Forward looking statements by their nature are uncertain and outside of the company's control except for actual results or comments containing forward looking statements may involve risks and uncertainties. Some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on form.
10-K for the fiscal year. These statements are not guarantees of future performance. Therefore undue reliance should not be placed upon them actual results could differ materially from these expectations. In addition, today's call, we'll discuss non-GAAP financial measures non-GAAP financial measures should be considered a supplement to and knowledge.
Sandy Martin: Actual results could differ materially from these expectations.
Sandy Martin: In addition, today's call will discuss non-GAAP financial measures. non-GAAP financial measures should be considered a supplement to and not a substitute for GAAP financial measures. We refer you to the reconciliation from GAAP to non-GAAP measures included in today's earnings press release. I would now like to turn the call over to Tom Ferguson. Tom? Thank you, Sandy.
Substitute for GAAP financial measures, we refer you to the reconciliation from GAAP to non-GAAP measures included in today's earnings press release, I would now like to turn the call over to Tom Ferguson, Tom. Thank you Sandy.
Thomas E. Ferguson: Good morning and thank you for joining us to review our fiscal 2024 third quarter results. Today I'll start by covering company highlights for the quarter before passing it over to Philip to discuss AZZ's detailed financial results and our balance sheet.
Good morning, and thank you for joining us to review our fiscal 2024 third quarter results today I'll start by covering company highlights for the quarter before passing it over to Philip to discuss Azz's detailed financial results and our balance sheet then.
Philip Schlamm: Then Dave will provide industry commentary on our end markets, and I will conclude our presentation by covering our sustainability efforts and AZZ's full year outlook before opening the line.
And then Dave will provide industry commentary on our end markets and I will conclude our presentation by covering our sustainability efforts in AZZ is full year outlook before opening the line for questions.
Dave: AZZ is North America's market leader in hot-dip galvanizing and cold-coating solutions, leveraging our scale and strategic footprint to better serve customers with excellence and expertise.
AZZ as North America's market leader in Hot dip galvanizing, Nicole coated solutions, leveraging our scale and strategic footprint to better serve customers with excellence and expertise.
Dave: Our leadership has been focused on strong execution this year, and I am pleased to report that the segments have performed exceptionally well through the third quarter. These results are a testament to the strength of our company, talented teams, effective strategic plan, and ongoing commitment to operational excellence.
Our leadership has been focused on strong execution. This year and I am pleased to report that the segments that performed exceptionally well through the third quarter. These results are a testament to the strength of our company talented teams effective strategic plan and ongoing commitment to operational excellence collectively.
Dave: Collectively, these attributes contribute to our ability to provide valuable differentiated solutions and services to our customers.
Collectively these attributes contribute to our ability to provide valuable differentiated solutions and services to our customers.
Dave: Turning to our results, total sales for the quarter were $382 million, up 2.2%, momentum continued for metal coatings with third quarter sales of $163 million, up 3.1% versus last year's quarter. Pre-coat metals also grew during the quarter to $218 million, up 1.6% from a year ago.
Turning to our results total sales for the quarter were 380 to 82 million up two 2% momentum continued for metal coatings with third quarter sales of $163 million up three 1% versus last year's quarter breakout metals also grew during the quarter to $218 million up one 6%.
From a year ago, we grew sales organically and improve profitability in the quarter and I am pleased to report that we continued to effectively secure market share without sacrificing our value pricing discipline.
Dave: We grew sales organically and improved profitability in the quarter. And I am pleased to report that we continue to effectively secure market share without sacrificing our value pricing distance.
Dave: We increased adjusted earnings per share for the quarter by 53% to $1.19 and grew adjusted EBITDA by 23% to $86 million versus prior year.
We increased adjusted earnings per share for the quarter by 53% to $1.19 and grew adjusted EBITDA by 23% to $86 million versus prior year.
Dave: This led to strong cash from operations for the quarter of 63 million.
This led to strong cash from operations for the quarter of $63 million as a result, EBITDA margins were 30% for metal coatings, and 18, 4% freak out metals during the quarter.
Dave: As a result, EBITDA margins were 30% for metal coatings and 18.4% for pre-coat metals during the quarter.
Dave: both within the stated targeted ranges for each segment. In short, our dedication to delivering best in class customer service and ongoing enhancements and operations led to increased sales, improved profitability, and significant cash flow, this quarter.
Both within the stated targeted ranges for each segment in short our dedication to delivering best in class customer service and ongoing enhancements in operations led to increased sales improved profitability and significant cash flow this quarter.
Dave: We continue to develop and enhance our operational technologies which sets us apart from the competition. Our digital galvanizing system or DGS is AZZ's proprietary technology that connects our 41 galvanizing facilities to the company's ERP system and provides real-time visibility and order tracking to allow superior customer service.
We continue to develop and enhance our operational technologies, which sets us apart from the competition, our digital galvanizing system or D. G. S is azz's proprietary technology that connects our 41 galvanizing facilities to the company's ERP system that provides real time visibility and we're tracking.
To allow superior customer service. Similarly in pre code 13 facilities closed and attracts customers inventory provides real time access to project schedule. These advanced platforms, along with our outstanding teams focused on providing excellent service position AZZ is a highly differentiated metal coatings provider to customers throughout north.
Dave: Similarly, in PRECO's 13 facilities, CoilZone tracks customer's inventory and provides real-time access to project scheduling. These advanced platforms, along with our outstanding teams focused on providing excellent service, position AZZ as a highly differentiated metal coatings provider to customers throughout North America.
America.
Dave: As Philip would discuss more in a moment, we are strengthening the balance sheet and plan to continue to deploy capital care.
As Philip will discuss more in a moment, we're strengthening the balance sheet and plan to continue to deploy capital carefully we have worked diligently to reduce debt and improve our leverage ratio and reprice, our term loan a revolver to lower interest costs.
Philip Schlamm: We have worked diligently to reduce debt, improve our leverage ratio, and reprice our term loan at Revolver to lower interest costs.
Philip Schlamm: which continues to reinforce our decision to self-hon the Greenfield Pre-Cut Metal's facility in Washington, Missouri. Instead of going with a sale of the
Which continues to reinforce our decision to self fund the Greenfield pre kept metals facility in Washington, Missouri, instead of going with a sale leaseback.
Philip Schlamm: We're highly focused on long-term value creation through our sustainable solutions. We believe that by continually investing in our people and relentlessly executing our strategy, we will accelerate AZZ's value creation and ensure sustainability.
We're highly focused on long term value creation through our sustainable solutions, we believe that by continually investing in our people are relentlessly executing our strategy, we will accelerate azz's value creation and ensures sustainability.
Philip Schlamm: Our strategic transformation over the last 18 months has been a catalyst for generating significantly higher run rate EBITDA and cash flow.
Our strategic transformation over the last 18 months has been a catalyst for generating significantly higher at run rate EBITDA and cash flow. We will continue to scale our business through both organic and inorganic growth leveraging our highly differentiated value proposition to customers as we create long term value for our shareholders with that I'll turn it.
Philip Schlamm: We will continue to scale our business through both organic and inorganic growth, leveraging our highly differentiated value proposition to customers as we create long-term value for our share.
Philip Schlamm: With that, I'll turn it over to Philip. Thanks, Tom. Good morning and thank you for participating in our third quarter update. All numbers referenced today are results from our continuing operation.
Over to Philip Thanks, Tom Good morning, and thank you for participating in our third quarter update all numbers referenced today our results from our continuing operations as Tom mentioned, we reported fiscal year 2024, third quarter sales of $381.6 million compared to $373 $3 million and last year.
Philip Schlamm: As Tom mentioned, we reported fiscal year 2024 third-quarter sales of $381.6 million compared to $373.3 million in last year's third quarter. Total sales increased by 2.2% from a year ago on higher metal coding sales of 3.1% and pre-codes sales up 1.6%.
Third quarter total sales increased by two 2% from a year ago on higher metal coating sales of three 1% and pre code sales up one 6%.
Philip Schlamm: Third quarter gross profit was $8.1 million or $23.1 percent of sales compared to $73.1 million or $19.6 percent of sales in the prior year same quarter. The 350 basis point improvement in gross margin was a result of lower zinc and overhead costs
Third quarter gross profit was $88 $1 million or 23, 1% of sales compared to $73 1 million or 19.6% of sales in the prior year same quarter. The 350 basis point improvement in gross margin was a result of lower zinc and overhead cost and an accounting reclassification to corporate or intangible assets.
Philip Schlamm: and an accounting reclassification to corporate of intangible assets amortization, partially offset by...
Amortization, partially offset by increased labor costs.
Philip Schlamm: selling general and administrative expenses were $35.3 million in the third quarter, which included a $4.5 million legal accrual related to a long outstanding commercial dispute with a metal coatings customer.
Selling general and administrative expenses were $35 3 million in the third quarter, which included a $4 $5 million legal accrual related to a long outstanding commercial dispute with a metal coatings customer.
Philip Schlamm: Excluding the third quarter legal accrual, SG&A expenses for the fiscal 2024 third quarter would have been $30.8 million or 8.1% of sales compared to $27.7 million or 7.4% of sales in the prior year.
Excluding the third quarter legal accrual SG&A expenses for the fiscal 'twenty 'twenty four third quarter would have been $30 8 million or eight 1% of sales compared to $27 7 million or seven 4% of sales in the prior year.
Philip Schlamm: We reported third quarter adjusted EBITDA of $86.4 million or 22.6% of sales compared with 68.9 million or 18.5% of sales last year.
We reported third quarter, adjusted EBITDA of $86 $4 million or 22, 6% of sales compared with $68 9 million or 18, 5% of sales last year. This 410 basis point improvement in adjusted EBITDA margin was primarily driven by favorable mix and improved operational efficiencies and both are.
Philip Schlamm: This 410 basis point improvement in adjusted EBITDA margin was primarily driven by favorable mix and improved operational efficiencies in both of our segments.
Of our segments.
Philip Schlamm: interest expense for the third quarter was $26 million compared to $26 million in the prior year. Mostly due to lower-out sanity debt and the effect of our repricing of the term loan in August .
Interest expense for the third quarter was $26 million compared to $26 million in the prior year, mostly due to lower outstanding debt and the effect of our repricing of the term loan in August in a moment I will discuss the recent repricing of our revolver.
Philip Schlamm: In a moment, I will discuss the recent repricing of our revolver.
Philip Schlamm: Income tax expense was $8.8 million, which reflects an effective tax rate of 24.6% in the quarter.
Income tax expense was $8 $8 million, which reflects an effective tax rate of 24, 6% in the quarter compared to 11, 7% in the third quarter of the prior year.
Philip Schlamm: compared to 11.7% in the third quarter of the prior year.
Philip Schlamm: The prior year was favorably impacted by recognizing tax basis differences related to the avail joint venture that were not repeated in the current quarter.
The prior was favorably impacted by recognizing tax basis differences related to the avail joint venture that were not repeated in the current quarter.
Philip Schlamm: We expect full year fiscal 2024 effective tax rate to be around 23% with the longer term tax rate expected to remain in the 24% range.
We expect full year fiscal 2024 effective tax rate to be around 23% with the longer term tax rate expected to remain in the 24% range.
Philip Schlamm: Adjusted net income for the third quarter was $34.8 million compared to $19.5 million in the prior year, up 78.3%. As Tom mentioned, our adjusted diluted earnings per share of $1.19 was 52.6% above the adjusted diluted earnings of 78 cents reported in the prior year's same quarter.
Adjusted net income for the third quarter was $34 $8 million compared to $19 $5 million in the prior year up 78, 3% as Tom mentioned, our adjusted diluted earnings per share of $1 19 was 52.6% above the adjusted diluted earnings of 78 reported in the prior year.
Quarter.
Philip Schlamm: Since the preferred convertible shares are dilutive in the current quarter, the preferred dividends are added back to the earnings for the company's computation of EPS.
Since the preferred convertible shares are dilutive in the current quarter. The preferred dividends are added back to the earnings for the company's computation of EPS.
Philip Schlamm: Under a full conversion assumption for the preferred convertible shares, weighted average shares outstanding in the quarter and for the nine months are approximately 29.3 million shares.
Under a full conversion assumption for the preferred convertible shares weighted average shares outstanding in the quarter and for the nine months or approximately $29 3 million shares.
Philip Schlamm: Turning to our financial position and balance sheet. For the first nine months of the year, we generated strong cash from operations of $180.9 million and free cash flow of $114 million. Free cash flow is computed based on cash from operations less capable expenditures and was more than double from a year ago on improved segment performance with higher sales and improved EBITDA dollars and margins. And we benefited from our focus on working capital reduction.
Turning to our financial position and balance sheet.
For the first nine months of the year, we generated strong cash from operations of $189 million and free cash flow of $114 million free cash flow is computed based on cash from operations less capital expenditures and was more than double from a year ago on improved segment performance with higher sales and improved EBITDA dollars and margins.
And we benefited from our focus on working capital reduction.
Philip Schlamm: Capital expenditures for the first nine months were $66.9 million including typical safety maintenance and growth spending as well as about $34 million related to the new green field of coil coding plan under construction and Washington Missouri. The building construction is near completion and we are beginning to receive equipment scheduled to be installed in the upcoming month.
Capital expenditures for the first nine months were $66 $9 million, including typical safety maintenance and growth spending as well as about $34 million related to the new Greenfield coil coating plant under construction in Washington, Missouri.
The building construction is near completion and we are beginning to receive equipment scheduled to be installed in the upcoming months.
Philip Schlamm: Our construction progress remains on target and we will continue to provide progress update each quarter.
Our construction progress remains on target and we will continue to provide progress updates each quarter.
Philip Schlamm: Our full year forecast 2024 capital expenditure is approximately $119,000.
Our full year forecast twenty-twenty for capital expenditure.
It was approximately $119 million.
Philip Schlamm: I'm sorry, our full year fiscal 2024 capital expenditures projection, including $70 million for our new plant, are expected to be $119 million.
I'm, sorry, our full year fiscal 'twenty 'twenty, four capital expenditures projection, including $70 million for our new plant are expected to be $119 million.
Philip Schlamm: And heavier spending will continue through the first quarter of fiscal year 2025 as we receive, install, and ready the facility for operational testing later next year.
And heavier spending will continue through the first quarter of fiscal year 2025, as we receive installed and ready the facility for operational testing later next year.
During the third quarter, we further reduced our debt by $25 million through the first three quarters, we paid down $85 million of debt within our previously communicated targeted debt reduction estimate of $75 million to $200 million.
Speaker Change: During the third quarter, we further reduced our debt by $25 million. Through the first three quarters, we paid down $85 million of debt within our previously communicated targeted debt reduction estimate of $75 to $100 million.
Speaker Change: As Tom noted, strong operational performance and focus working capital management allowed us to reduce our net debt to leverage ratio to 3.1 times closer to achieving our target of 3.0 times or lower.
As Tom noted strong operational performance and focused working capital management allowed us to reduce our net debt to leverage ratio to three one times closer to achieving our target of 3.0 times or lower.
Speaker Change: In addition to repricing our term LUMB during our second quarter of the fiscal year, we also successfully repriced our $400 million senior security over last month. The most recent repricing reduced our interest rate margin across all leverage base pricing tiers from a fixed SOFR plus 425 to our current effective rate of SOFR plus 300 basis points.
In addition to repricing our term loan b during our second quarter. The fiscal year. We also successfully repriced our $400 million senior secured revolver last month. The most recent repricing reduced our interest rate margin across all leverage based pricing tiers from a fixed sofa plus 425 to our current effective rate of Sofer, plus 300 <unk>.
This points and we also were able to remove the existing credit spread adjustment of 10 basis points.
Speaker Change: And we also were able to remove the existing predispat adjustment of 10 basis points.
Speaker Change: We will see a benefit going forward of lower interest costs through the maturity of our facility and plan to balance borrowings between the term loan and revolving credit facility to minimize interest costs. We have no maturities of debt.
We will see a benefit going forward of lower interest costs through the maturity of our facility and plan to balance borrowings between the term loan and revolving credit facility to minimize interest costs.
We have no maturities of debt until 2027.
Speaker Change: We remain confident in our ability to generate positive cash flows and support our growth plans while continuing to strengthen our balance sheet and reduce debt and leverage.
We remain confident in our ability to generate positive cash flows and support our growth plans, while continuing to strengthen our balance sheet and reduce debt and leverage.
As a reminder.
Speaker Change: We are in a three-year swap arrangement that fixes roughly half of the variable rate debt, and that arrangement expires in September 2025.
We are in a three year swap arrangement in fixed is roughly half of the variable rate debt and that arrangement expires in September 2025.
Speaker Change: During the first nine months of the fiscal year, we paid cash dividends to common shareholders of $12.8 million and also paid $10.8 million in dividends to our Series A preferred holders.
During the first nine months of the fiscal year, we paid cash dividends to common shareholders of $12 $8 million and also paid $10.8 million in dividends to our series a preferred holders.
Speaker Change: We made no-share repurchases during the quarter or year-to-date as debt reductions continues to be our top priority. Before turning it over to David, I want to provide
We made no share repurchases during the quarter or year to date as debt reduction continues to be our top priority.
Before turning it over to David I want to provide an update on two matters.
David Nark: Number one, equity and earnings of our unconsolidated subsidiaries for the current quarter increased to $8.7 million compared to $1.0 million in the prior year quarter.
Number one equity in earnings of our unconsolidated subsidiaries for the current quarter increased $8 7 million compared to 1.1 million in the prior year quarter.
David Nark: The increase is primarily due to higher earnings from the avail of JV.
The increase was primarily due to higher earnings from the avail of JV.
David Nark: a release of a reserve for liquidated damages on a large project they had and three months of equity and earnings in the current quarter compared to only one month in the prior third quarter.
A release of a reserve for liquidated damages on a large project they had and three months of equity and earnings in the current quarter compared to only one month in the prior year third quarter we.
David Nark: We do not expect to see near-term earnings levels this high during our fourth quarter or into fiscal year 2025.
We do not expect to see near term earnings levels. This high during our fourth quarter or into fiscal year 2025.
David Nark: Lastly, earlier this morning, the company filed a form S3 registration statement with the Securities and Exchange Commission as a universal shelf registration.
Lastly earlier this morning, the company filed a form S. Three registration statement with the Securities and Exchange Commission as a universal shelf registration.
David Nark: that will provide future funding options to the company. Coming out of our annual strategic planning sessions earlier this year, we determined that a universal self registration is both prudent and good housekeeping for a business our size.
That will provide future funding options to the company.
Coming out of our annual strategic planning sessions earlier. This year, we determined that a universal shelf registration is both prudent and good housekeeping for a business our size.
Speaker Change: With that, I'd like to turn the call over today. Thank you, Philip. Good morning, everyone. As Tom covered, our strategic growth plan includes a combination of organic and inorganic expansion throughout North America.
With that I'd like to turn the call over to Dave.
Thank you Philip and good morning, everyone as Tom covered our strategic growth plan includes a combination of organic and inorganic expansion throughout North America, we plan to utilize our large footprint to leverage market leading positions in both segments Azz's trusted business partnership within our nationwide network is built on a growing base of AUM.
Speaker Change: We plan to utilize our large footprint to leverage market leading positions in both segments.
Speaker Change: AZZ's trusted business partnership within our nationwide network is built on a growing base of over 3,000 customers, many of whom are long-standing blue-chip customers. Additionally, we continue to attract and retain customers based on our deep technical expertise, customer-centric technologies, superior customer service, and highly specialized solutions and services.
For 3000 customers, many of whom are long standing blue chip customers. Additionally, we continue to attract and retain customers based on our deep technical expertise customer centric technologies superior customer service and highly specialized solutions and services metal coatings benefited this quarter from continued.
Speaker Change: Metal coatings benefited this quarter from continued strength in transmission and distribution, as well as bridge and highway projects.
Strength in transmission and distribution as well as bridge and highway projects pre coat metal sales performance has recently trended better than the market and are growing volumes continue to improve from intentional conversion selling mix and value pricing.
Speaker Change: Pre-coat metal sales performance has recently trended better than the market and our growing volumes continue to improve from intentional conversion selling, mix, and value pricing.
Speaker Change: Secular growth trends, including plastics to aluminum conversions, are important for pre-code, coupled with the team's ability to convert captive paint lines inside other companies. Tom sometimes refers to this as our de-verticalization sales strategy, which is a growth area for AZZ, as companies decide to cut costs or outsource their role-coding needs.
Secular growth trends, including plastics to aluminum conversions are important for pre coat, coupled with the team's ability to convert captive paint lines inside other companies Tom sometimes refers to this as our D verticals Asian sales strategy, which is a growth area for AZZ as companies decided to cut costs or outsource their role.
Coating needs.
Speaker Change: We expect transmission and distribution to continue to be strong in the coming months and are seeing continued evidence of infrastructure spending, including work on data centers and microchip plants.
We expect transmission and distribution to continue to be strong in the coming months and are seeing continued evidence of infrastructure spending including work on datacenters and microchip plants.
Speaker Change: We continue to see long-term secular tailwinds associated with infrastructure projects tied to the AIIJA and CHIPS Act.
We continue to see long term secular tailwind associated with infrastructure projects tied to the a I J E and chipsets, which we expect to positively impact our results in calendar 'twenty 'twenty four.
Speaker Change: which we expect to positively impact our results in calendar 2024.
Speaker Change: Although solar and renewables and markets have recently weakened, we are seeing pockets of regional strength across the U.S. for these projects.
Although solar and renewables and markets have recently weakened we're seeing pockets of regional strength across the U S for these projects.
Speaker Change: Finally, although our business this year has seen softer demand in HVAC and transportation,
Finally, although our business. This year has seen softer demand in HVAC and transportation.
Speaker Change: Appliances and residential construction and markets are returning. Non-residential construction continues to perform well with strength in warehousing, manufacturing, and agriculture. We are also optimistic by the long-term expectations for manufacturing reshoring and the positive transition to pre-painted steel and aluminum.
Appliances and residential construction end markets are returning nonresidential construction continues to perform well with strength in warehousing manufacturing and agriculture. We are also optimistic by the long term expectations for manufacturing re shoring and a positive transition to pre painted steel and aluminum.
Speaker Change: And, as I mentioned, we are seeing the gradual movement in the container category from plastics to aluminum throughout North America.
And as I mentioned, we are seeing the gradual movement in the container category from plastics to aluminum throughout North America.
Speaker Change: Our metal coatings and pre-coat metals teams continue to make progress on market share gains and hot dip galvanizing, as well as pre-painted coil projects with key customers. With that, I'd like to turn it back over to
Our metal coatings and pre coat metals teams continue to make progress on market share gains in hot dip galvanizing as well as pre painted coil projects with key customers with that I'd like to turn it back over to Tom.
Thanks, Dave.
Speaker Change: One of the most rewarding aspects of being a part of AZC is the opportunity to work with over 3,900 incredibly talented people who strive to do the right thing for our employees, customers, partners, and communities where we live.
One of the most rewarding aspects of being a part of AZZ has the opportunity to work with over 3900 incredibly talented people, who strive to do the right thing for our employees customers partners and communities, where we live and work.
Speaker Change: We were recently recognized on Newsweek's 2024 America's Most Responsible Companies list based on our company-wide sustainability in the SGA.
We were recently recognized on Newsweek's 2020 for America's most responsible companies list based on our company wide sustainability and ESG efforts. We are grateful that this is the second year AZZ was named among this prestigious list of companies collectively our business segments provide sustainable unmatched metal coating solutions that enhance the longevity and appearance of.
Speaker Change: We are grateful that this is the second year AZZ was named among this prestigious list of companies.
Speaker Change: Collectively, our business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products, and infrastructure that are essential to everyday life. Our solutions and services are synonymous.
Buildings products and infrastructure that are essential to everyday life.
Our solutions and services are synonymous with sustainability.
Speaker Change: Regarding our business outlook in the fourth quarter ending in February , our fabrication customers continue to cite project backlogs and critical markets that Dave just discussed.
Regarding our business outlook in the fourth quarter ending in February our fabrication customers continued to site project backlogs in critical markets that that Dave just discussed labor availability and employee turnover have both improved from a year ago. We continue to execute on our working capital initiatives now are well positioned to adjust inventories of paint zinc when demand shifts.
Speaker Change: We continue to execute on our working capital initiatives and now are well positioned to adjust inventories of paint and zinc when demand shifts.
Speaker Change: whether due to our growth initiatives or other micro or macroeconomic impact.
Whether due to our growth initiatives or other micro or macro economic impacts.
Speaker Change: As Phillip mentioned, the construction of our Greenfield Aluminum Coil Coating Facility in Missouri is progressing. The building is substantially completed and equipment has begun to arrive and be installed in the facility. We remain excited about the growth opportunity this investment creates.
As Philip mentioned, the construction of our Greenfield aluminum coil coating facility in Missouri is progressing the building is substantially completed and equipment has begun to arrive and be installed in the facility. We remain excited about the growth opportunity this investment creates.
Speaker Change: We continue to anticipate a stronger fourth quarter compared to Q4 last year. Our metal coatings and preco teams have demonstrated their ability to drive operational efficiencies and sustained margins with superior quality and service level.
We continue to anticipate a stronger fourth quarter compared to Q4 last year, our metal coatings and pre Coe teams have demonstrated their ability to drive operational efficiencies and sustained margins with superior quality and service levels.
Speaker Change: We're narrowing and somewhat revising up our fiscal 2024 sales guidance of $1.45 to $1.55 billion. Adjusted EBITDA guidance of $315 million to $335 million and adjusted EPS guidance of $4.15 to $4.35.
We are narrowing and somewhat revising up our fiscal 'twenty 'twenty four sales guidance of $1.45 billion to $1.55 billion adjust.
Adjusted EBITDA guidance of 315 million to $335 million and adjusted EPS guidance of $4.15 to $4 35 sets and our capital expenditures for fiscal 'twenty 'twenty four estimated to be $119 million, which includes about $70 million. This year related to the Washington, Missouri Greenfield plant.
Speaker Change: And our capital expenditures for fiscal 2024 are estimated to be $119 million, which includes about $70 million this year related to the Washington, Missouri, Greenfield.
Speaker Change: Although interest rates have increased this year and interest expense ran significantly higher than we planned, we were able to pay down debt, reprice our term in revolving debt, and offset the EPS impact with incremental equity in earnings from our minority interest in the avail joint venture. And focused operating performance...
Although interest rates have increased this year and interest expense ran significantly higher than we plan, we were able to pay down debt reprice, our term and revolving debt and offset the EPS impact with incremental equity in earnings from our minority interest in the avail joint venture and focused operating performance from our business groups, we plan to provide our fiscal.
Speaker Change: We plan to provide our fiscal year 2025 guidance in a few weeks for the new year that begins March 1st.
The year 2025 guidance in a few weeks for the new year that begins March 1st.
Speaker Change: As always, I want to thank our hardworking and highly talented team who execute AZZ's shared vision of growth, profitability, and operational improvements every day.
As always I want to thank our hardworking and highly talented team with who execute AZZ shared vision of growth profitability and operational improvements every day our.
Speaker Change: Our mission is to create value in a culture where people can grow and traits really matter. Traits is an acronym for trust, respect, accountability, integrity, teamwork, and sustainability. These are AZZ's core behavioral values that continue to shape our future successes. Now operator, please exit.
Our mission is to create value in a culture, where people can grow and traits really matter trades is an acronym for trust respect accountability integrity teamwork and sustainability. These are azz's core behavioral values that continue to shape our future successes.
Now operator, please open up the call for questions.
Yeah.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star, then one, on your telephone keypad.
We will now begin the question and answer session.
Ask a question you May press Star then one on your telephone keypad.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the key to withdraw your question.
If you are using a speakerphone please pick up your handset before pressing the key.
To withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble the roster.
At this time, we will pause momentarily to assemble the roster.
And our first question comes from Lucas pipes of B Riley Security. Please go ahead.
Speaker Change: And our first question comes from Lucas Pipes of the Riley Security. Please go ahead.
Lucas Pipes: Thank you very much, operator. Good morning, everyone. My first question is on the leverage. You're within a stone's throw of your prior leverage target of three times. Is there a desire to reduce leverage beyond lower than three times, or do you think that kind of what you had outlined previously still stands today? Thank you very much. Yeah.
Thank you very much operator, good morning, everyone.
My first question, if it's under leverage.
You are within.
Stone's throw off.
Your prior leverage target of three times.
Is there.
Desire to reduce leverage beyond lower than three times or or or do you think that.
Kind of what you had outlined previously still stands today. Thank you very much.
Yeah Lucas good morning.
Speaker Change: I think, you know, two and a half to three times is our long-term target. So, you know, due to this great performance of our teams, focusing on working capital and some of the other initiatives we've had going, we've been able to pay down debt.
I think you know two two and a half to three times is our long term target. So you know due to just great performance of our teams are focused on our working capital and some of the other initiatives, we had going we've been able to pay down debt quicker than it did even we'd hoped a little bit.
Speaker Change: quicker than even we'd hoped a little bit. We're going to stay focused on that through the fourth quarter of this year. We do have a board meeting coming up next week to get our budgets for next year approved, where we'll talk more about capital deployment strategies and get our CAPX approved and things like that. So right now our focus is continuing to pay down debt this year. We still think we've got some that we can do.
We're going to stay focused on that through the first quarter or through the fourth quarter of this year, we do have a.
Our board meeting coming up next week to get our budgets for next year approved where we'll talk more about capital deployment strategies and get our Capex approved and things like that so right now our focus is continuing to pay down that debt. This year. We still think we've got get some that we can do.
Speaker Change: So I'd say, but artificially, we're not really trying to drive towards that 2 and 1 half, 2.75 times right now. We do not have any acquisitions in the pipeline, so we don't have that as a cash need at the moment. But as we look at some opportunities for investments next year, I like to delay that until we discuss it with our board first.
So I would say, but artificially where we're not really trying to drive towards that two and a half 2.75 times right now we do not have any acquisitions in the pipeline. So so we don't have that as a cash need at the moment.
But as we look at some opportunities for investments next year.
I'd like to delay that until we are we discuss it with our board first.
Speaker Change: Very helpful. Thank you. Then I want to ask about the guidance for fiscal 24, on the sales side.
Very helpful. Thank you and then I wanted to.
Yes.
About the guide for 'twenty fiscal 'twenty four.
You are on the sell side.
Speaker Change: increase the lower end of the range. But when I kind of look at year-to-date performance versus your full-year target, you can see
Increased the lower end of the range, but when I when I kind of look at year to date performance versus.
Our full year target.
Low end.
Speaker Change: 279 for the fiscal fourth quarter up to roughly flat at the high end, 379 million of sales. What would it take to come in at the low end?
<unk> 79 for the fourth fiscal fourth quarter up to like roughly.
Roughly flat at the highest 379 million of sale, but what would it take to comment at the low end is that a.
Speaker Change: really conservative look here or how would you frame that up? Thank you.
Really conservative.
Look here or how would how would you frame that up.
Speaker Change: Yeah, that's very good. Good catch, Lucas. I think that probably is very much so on the low end.
Yeah, that's very good yeah. Good good catch Lucas I think it probably is.
Very much so on the low end.
Speaker Change: Yeah, we're going to track much better than that. We're not tracking to the high end, either. But...
Yeah, we're going to we're going to track much much better than that we're.
We're not tracking to the high end either but.
Speaker Change: which I guess is why it's a range. I feel good, we're not chasing business over aggressively right now. You know, there is some price sensitivity out there. So we're trying to keep our powder dry and let the folks focus on the business that's attractive to us, taking good care of our customers and keep from chasing business.
Which I guess is why it's a range.
I feel good where we're not chasing business over aggressively right now.
There is some price sensitivity out there. So we're trying to keep our powder dry and let's let the folks focus on the business that's attractive to us.
Taking good care of our customers and and keep them chasing business.
Below price levels that we would not want to go after so.
Speaker Change: below price levels that we want to go after. So we're maintaining that discipline, which is why we set the range. But yeah, 279's definitely below what we would say we're going to have any shot at getting to the point.
We're maintaining that discipline, which is why we set the range, but be at 279.
Definitely definitely below what we what we would say we're going to have any shot at.
Getting to.
Speaker Change: That's helpful. Thank you. Then, a quick follow-up. I appreciate you'll issue guidance in a few weeks or so, but in terms of kind of the big trends that you're seeing heading into your next fiscal year, would you anticipate a slowdown when it comes?
Okay. That's helpful. Thank you then a quick follow up I appreciate your issue guidance in a few weeks or so but.
In terms of kind of the big trends that youre seeing heading into your next fiscal year.
Would you anticipate a slowdown when it comes.
Speaker Change: to Chips and Science Act, for example, or infrastructure, or do you think those key markets will still, on the construction side, will still be kind of trending higher year on year, and then, of course, you have organic and inorganic growth opportunities that you outlined?
At two chips and Science Act for example.
Or infrastructure or do you think those are.
Key markets will still on the construction side there'll be kind of trending higher year on year, and then of course, you have organic and inorganic growth opportunities that you outlined.
Speaker Change: in your prepared remarks, so just trying to get a little bit of a flavor as to what would be.
In your prepared remarks, so just trying to get a little bit of a flavor as to what would be.
Speaker Change: potentially tracking positive versus where you might anticipate a little bit more softness in your next fiscal year.
Potentially tracking positive versus where you might anticipate a little bit more softness in the next fiscal year. Thank you very much.
Speaker Change: Yeah, Lucas, this is Dave. I think what you'll see there, you know, we continue to see positive signs. Our metal coatings business in particular is galvanizing a lot of steel for new chip plants and utility T&D projects, bridge and highway.
Yeah. Lucas this is Dave I think what Youll see there. We you know we continue to see positive signs our metal coatings business in particular.
Is galvanizing a lot of steel for new chip plants, and utility T&D projects Bridge and highway.
Dave: and some solar for quite some time, so we think that's going to continue. We also think that the impact of government spending is going to result in multi-year demand for our solutions on both sides of the house, particularly those focused on critical infrastructure and energy transition initiatives, so we feel pretty good about the macro.
And some solar for quite some time. So we think that's going to continue we also think that the impact of government spending is going to result in multi year demand for our solutions on both sides of the house, particularly those focused on critical infrastructure and energy transition initiatives. So so we felt pretty good about the macro.
Speaker Change: Well, and I'd add in that, you know, on the pre-code side, I think both their organic growth initiatives and end as well.
Well and I'd add in the you know on the pre code side I think both their organic growth initiatives as in I'm just.
And as well as.
Speaker Change: I think residential construction is probably bottom, so hopefully that starts to trend up. Commercial construction is looking okay, and so I feel pretty good about the early part of the year and as we get into it. The nice part is, particularly for pre-cut metals, once those volumes start to pick up, we get some really, really good flow through pretty quickly as you...
I think residential construction is probably bottom so hopefully that starts to trend up commercial construction as you know look looking okay and insight.
I feel pretty good about the early part of the year and as we get into it.
The nice part is for particularly for pre co metals, you know what once those volumes start to pick up we get some really really good flow through pretty quickly as you start to as we come off the bottom so to speak because as we said last time, you know, we're down 10% to 12% on volume dependent on which market it happens to be which is.
Speaker Change: start to, as we come off the bottom, so to speak, because as we said last time, you know, we're down 10 to 12% on volume, depending on which market it happens to be, which is,
Which is.
Speaker Change: You know, we're outperforming the market itself, but still, we're, you know, we're tracking to where we should have improvement next year. We have not built, well, I shouldn't say that. We have not put our, of course, not put our guidance out. And these will all be good discussions about how aggressive we want to be next year and how we continue to maintain that focus on.
We're outperforming the market itself, but still we're.
We're tracking to where we should have an improvement next year.
We have not built well shouldn't say that we we have not put our guide of course, not put our guidance out.
And these are all I'll begin discussions about how aggressive we want to be next year and how we continue to maintain that that focus on.
Speaker Change: on our value pricing and maintain that discipline. So I feel pretty good about the first part of the year, and then the outlook just gets a little fuzzier as I look into fiscal 2021.
On our value pricing and meet and maintain that discipline. So.
I feel pretty good about the first part of the year and then the outlook. It just gets a little fuzzier.
As I look into fiscal 'twenty five.
Speaker Change: I appreciate the color. Thank you very much for all the details and insights, and continue the best work.
I appreciate the color. Thank you very much for all the detail and insight and continued best of luck.
Speaker Change: The next question comes from John Frenz Robb of Cedodian Company. Please go ahead. Good morning, guys.
The next question comes from John <unk> of Sidoti <unk> Company. Please go ahead.
Good morning, guys and congratulations on a very good quarter.
John E. Franzreb: I'd actually like to start with the the guidance. I'm curious whether you've started to include JV income in the forward guidance for fiscal 2024 or are you still excluding it in that outlook?
I'd actually like to start with the guidance.
I'm curious whether you've started to include JV income.
Forward guidance for fiscal 'twenty, 'twenty, four or you're still excluding in that outlook.
On the guidance we have.
John E. Franzreb: As we go forward, we will include that in our 2025 guidance for the Q4. We've included the realized
As we go forward. We will include that in our 2025 guidance for Q4, we've <unk>.
Included.
The realized yeah.
John E. Franzreb: Um, results to the three quarters, but no fourth quarter guidance.
Results through the three quarters, but no fourth cohort.
Guidance.
Speaker Change: Yeah, just so you know, John , part of our issue is we're one month in arrears and they're on a calendar year. So we actually have a board meeting with them coming up fairly soon to where we'll get a better feel for how the, how the 1st part of their.
Yes.
So I know John as part of our issue is we're one month in arrears in there on a calendar year. So we actually have a board meeting with them coming up fairly soon to where we'll get a better feel for how the.
Now the first part of their calendar years looking.
Speaker Change: No, just curious. I'm curious. I assume your negotiations with the zinc supplies for 2024 are now done. Can you update us with any changes in the pricing outlook, especially with the premiums being such a variable last year? How does that look for the year ahead?
No just curious.
I'm curious.
I assume your negotiations renegotiations with zinc supplies.
2024 are now done can you update us with any changes in the pricing outlook, especially with the premiums being such a variable last year, how does that look for the year ahead.
Speaker Change: Yeah, the premiums have come down. So, yeah, we've gone through the, you know, the kick-off-the-year negotiations and completed those. So, we feel good. One, we feel supply is more secure, which is why we've been able to adjust some of the on-yard inventories. So, that's one good thing. Two is the premiums are down, I think, about 10 cents. So, that's upside as that starts to flow through our kettles. And, of course, the rest is tied down.
Yeah, the premiums had come down so.
So yeah, we've gone through that.
The kick off the year negotiations and completed those so we feel good one one we feel supply is more secure which is why we've been able to adjust some of the on yard inventories.
So so that's one good thing two is the premiums are down I think about 10 cents. So so that's that's upside as that starts to flow through our kettles and of course the rest it's Todd Yeah, Let me.
Speaker Change: Got it. And regarding pre-coat, where do we stand on the pricing realization curve? You had some this quarter, you had some last quarter. Is all the low-hanging fruit gone or is there still available pricing to be realized there?
Got it and regarding pre coat, where do we stand on the pricing realization curve you had some this quarter you had some last quarter is the low hanging fruit gone or is that still available pricing to be realized there.
Speaker Change: Yeah, I think, you know, when we're talking about value pricing, part of it is the mix we focus on and the opportunities that we pursue.
Yeah, I think you know when we're talking about value pricing part of it is the mix, we focus on and the opportunities that we pursue.
Speaker Change: that tend to be both attractive in terms of long-standing customers and two, in terms of margin generated on some of those projects.
They tend to be both attractive in terms of long standing customers.
And two in terms of margin generated on some of those projects. So.
Speaker Change: I'd say we're still, you know, we're probably in the mid-innings compared to where we're at on the metal coating side. So there's still some room, Curt and the team, they're highly focused on growing their business profitably and we feel like we're having really, really good discussions on that topic.
I'd say, we're still you know we're probably in the mid innings are compared to where we're at on the metal coatings side. So theres still some room, Kurt and the team. They they are they're highly focused on growing their business profitably and we feel like we're haven't really really good discussions on that topic now.
Speaker Change: Right, that's great news. And one last question, I'll get back into queue. Regarding the Washington facility, should we anticipate startup costs as we start thinking about the revenue recognition and the timing of everything in late 25, early 26, or is that a booked revenue that will be immaterial?
Alright, that's great news.
One last question I'll get back into queue regarding to Washington.
Jody.
Should we anticipate.
We anticipate startup costs as we start thinking about the revenue recognition.
And the timing of everything in 'twenty 'twenty late 'twenty five 'twenty six or is it a booked revenue that will be immaterial.
Speaker Change: At this point, it will be booked revenue that's immaterial. We will continue to finish the plant on the schedule that we have laid out there. And then we have to get FDA testing. So as we can finish the construction in calendar 24, we'll start testing the facility. There may be some low revenues associated with that, but it's immaterial at this point. Great, thanks, Tate.
At this point it will be booked revenue that's immaterial we will.
We will continue to fill.
<unk> finished the plant on the schedule that we have laid out there and then we have to do yet F. DNA F. D. A testing so as we can finish the construction in calendar 'twenty four we will start testing the facility there may be some low revenues associated with that but it's immaterial.
Great. Thanks for taking my questions and congratulations again.
Hey, John.
Speaker Change: Once again, if you would like to ask a question, please press star, then 1.
Once again, if you would like to ask a question. Please press Star then one.
Speaker Change: And our next question will come from Adam Salheimer of Thompson Davis Co. Please go ahead.
And our next question will come from Adam Thalheimer of Thompson Davis <unk> co.
Please go ahead.
Hey, good morning, guys great quarter.
Adam Robert Thalhimer: Quick one on the avail JV, are we at the point where we should start baking in just a little bit of income every quarter, like maybe something in the million dollars?
I got a quick one on the on the <unk> JV are we at the point, where you can start baking in just a little bit of income every quarter.
Maybe something in the million dollar range.
Speaker Change: Yeah, we're to that point. Their accounting and all that is stabilized as they've completed their opening books.
Yeah, we are to that point, there their accounting and all that has stabilized as they've completed their opening books.
Speaker Change: You know, and I think we will include and give more, you know, more color both quantitatively and qualitatively as we put out the fiscal 2025 guidance.
And I think we will include and give them more more color.
Both quantitatively and qualitatively as we put out the fiscal 2025 guidance.
Speaker Change: Just it's coincidentally, but so we've got our board meeting and then their board meeting, and then hopefully we'll be able to put some guidance out and give some specific color around what to expect from avail.
Yeah, just coincidentally, but so we've got our board meeting and then their board meeting and then hopefully we'll be able to put some guidance out.
Give some specific color around what to expect.
From a base.
Speaker Change: They basically, we completed the transaction into September in 22, they went through a full year. I feel real good about it. They're performing well and so I am looking forward to be able to have y'all include some of that in each quarter.
They they basically.
<unk>, we completed the transaction in the September in 'twenty, two they went through a full year I I feel real good about it there are they're performing performing well and so I.
I am looking forward to be able to to.
To help you I'll include some of that in the in each quarter.
Okay.
Speaker Change: And then Phillip, you referenced a favorable mix in Q3, I think in both segments. I was just curious kind of what that was and if that continues into Q4.
And then Philip.
You referenced a favorable mix in Q3 I think in both segments. I was just curious kind of what that was and if that continues into Q4.
Phillip: The mix is really related to the different products.
The mixes is really related to the different products.
Phillip: you know, that we're servicing our customers with, and I think it will continue into the fourth quarter. When you look at our Q3 last year, we had production issues, supply chain issues, and we spent a lot of the fourth quarter into the first quarter last year improving that. I think you'll see that in the Q4, over Q4 change that we've really improved the operational efficiencies of these businesses. Okay. Lastly, are you guys anticipating additional debt payments?
That we're servicing our customers with and I think it will continue into the fourth quarter. When you look at our Q3 last year, we had production.
Issues supply chain issues, and we spent a lot of the fourth quarter into the first quarter of last year, improving that I think you'll see that in the Q4 over Q4 changed that we've really improved the operational efficiencies of these businesses.
Okay.
Lastly.
Are you guys going to be putting additional debt pay down in Q4.
We should have some additional debt pay down in Q4.
Speaker Change: Although there will be a little pressure.
Okay.
Though there will be global crush.
Speaker Change: But, sorry, there will be a little question. Oh yeah, I think it was a seasonally slower, yeah, quarter.
But sorry, but there will be a little question, a seasonally slower quarter for cash flow, yes, it's a seasonally slower and then we've got the Deja Blue project funding in Q4, and Q1 that were more of the equipments arriving.
Speaker Change: Yeah, it's a seasonally slower, and then we've got the Deja Blue project funding in Q4 and Q1 that were more of the equipments arriving, but we have done really well with $85 million in debt reduction through the first three quarters, and we are hopeful and focused on trying to reduce that further in Q4.
But what we have done really well of $85 million in debt reduction through the first three quarters and we are hopeful and focused on trying to reduce that further in Q4.
Great Okay perfect. Thanks, guys.
Speaker Change: The next question comes from John Broth of Kansas City Capitol. Please go ahead. Good morning everyone.
The next question comes from Jon Braatz of Kansas City Capital. Please go ahead.
Good morning, everyone.
John Broth: uh... tom uh... i guess michael or mc one of my questions is uh...
000, Tom I guess my one of my questions is.
John Brock: If you had the opportunity and at the right price, would you have any interest in selling your 40% interest in the, um, in, in your, um,
If you have the opportunity and at the right price would you have any interest in selling your 40%.
Interest in the and and your.
John Brock: in the uh... uh... your subsidiary reject your venture
And the Oh your subsidiary.
Venture.
Yeah, I think that's the.
First I'll say I like the avail team.
And but yeah. It's you know it's an investment that.
And we sold it to investors they they've got.
John Brock: you know, some transaction date in their mind and as they continue to hopefully grow and improve the business. But, yeah, it's an investment for us. We like the people over there, but, yeah, if we get the opportunity to do that, absolutely. We consider it both strategically and tactically as...
Some transaction date and in their mind and as they continue to hopefully grow and improve the business.
But yeah, it's it's.
It's an investment for us we we like the people over there, but but yeah, if we get the opportunity to to do that absolutely we consider it both strategically and tactically.
As.
Speaker Change: as we have these discussions with our board. Okay, okay. And also, Tom, you mentioned that you're seeing some, in the metal coating business, some price sensitivity out there. You know, relative maybe to where it was last quarter,
As we have these discussions with our board okay, Okay, and and also Tom you mentioned that you were seeing some in the metal coating business. Some price sensitivity out there you know relative maybe to where it was last quarter.
Thomas E. Ferguson: Has there been any movement in that price sensitivity, getting worse, getting better, any thoughts on that?
Hum.
Has there been any movement in that Oh that sounds it price sensitivity getting worse getting better any any any thoughts on that.
Speaker Change: You know, I think one of the things that happens to us, we we come in, you know, as the.
I think one of the things that happens too is we come in you know as the winter months hit in the construction slows down in infrastructure projects slow down I think we always kind of sense that there's there's more price sensitivity quite.
Speaker Change: as winter months hit and the construction slows down and infrastructure projects slow down, I think we always kind of sense that there's more price sensitivity. Quite frankly, I'm not so sure that what we're just feeling is
Quite frankly, I'm not so sure that what we're just feeling as you know the normal volume fall off as we get into winter months and slower construction.
Speaker Change: You know, the normal volume fall off as as we get into winter months and slower construction or because it's it hasn't worsened and and really hasn't changed much since since our last comments.
Because its it hasnt worsened in.
Really hasn't changed much since our since our last comments and in a lot of it does boil down to what's the mix of activity.
Speaker Change: And a lot of it does boil down to what's the mix of activity. I don't necessarily want to call out which pieces of our business are more profitable and alienate customers, but let's just say when that mix shifts and we move off of some of the stuff that's a little lower priced, not that we have bad.
Don't necessarily want to call out, which pieces of our business are more profitable and and alienate customers. So.
But but lets just say when that mix shifts and we move off of some of the stuff that's a little lower price.
Not that we have bad business by the way.
Speaker Change: Um, you know, so we do see the price move with that. So I have to say we're, we're holding our price points and our price multipliers, uh, very carefully and, uh, and then following the mix. So we have not seen any worsening of the signs and we haven't really seen any worsening of.
So we do see the price move with that so.
I have to say, we're holding our price points in our price multipliers very carefully.
Yeah, and then following the mix. So we have not seen any worsening of the science and we haven't really seen any worsening of our volumes, but but we're just coming through the holidays. So so our our folks actually had had a few days off rate change, which was which was probably nice for them and hopefully they're all rejuvenated as we fit the new.
Speaker Change: of volumes, but we're just coming through the holidays, so our folks actually had a few days off for a change, which was probably nice for them, and hopefully they're all rejuvenated as we fit the new year.
Sure Okay, alright, Thank you Tom.
Hi, Thanks.
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over to Tom Ferguson for any closing remarks.
This concludes our question and answer session I would like to turn the conference back over to Tom Ferguson for any closing remarks.
Thank you operator.
Thomas E. Ferguson: Thank you all for your time today. I really look forward to updating you on our fourth quarter and full year results in a few months and issuing fiscal 2025 guidance. So thank you for your time.
Thank you all for your time today, I really look forward to updating you on our fourth quarter and full year results in a few months and are initially in our fiscal 2025 guidance. So thank you for your time.
Okay.
Thomas E. Ferguson: conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Thomas E. Ferguson: .
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