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DATE

Thursday, April 23, 2026 at 11 a.m. ET

Call participants

  • President and Chief Executive Officer — Tom Ferguson
  • Chief Financial Officer — Jason Crawford
  • Senior Vice President, Marketing and Communications — David Nark

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Risks

  • Management said, "We expect the softness in both non-residential and residential construction may provide a headwind for our Precoat Metals segment in the current fiscal year," indicating risk of subdued performance in this segment.
  • Ongoing inflation pressures on input costs (zinc, paint, acids, chemicals, and transportation) are partially mitigated by value pricing, but "Hardly a day goes by anymore that we do not get some price increase from suppliers," highlighting continuing margin risks.
  • Constraints in substrate availability caused by tariffs and ramping domestic supply lead to unpredictable demand and increased project costs, with Tom Ferguson stating, "With tariffs on imports and domestic supply ramping up, there are some constraints in terms of available substrate to be painted. Some of our customers are experiencing that, which drives them to wait and probably to inventory less—wait until it is closer to the demand for the season, then go ahead and place orders to be able to best utilize the substrate that is available. That is one of the things we are seeing, which tends to drive us to—this fits our profile—quick turnarounds, small lots, lots of customization. That is a little bit of an underlying trend, which does increase costs on projects and also makes demand a little harder to predict because they are not buying to normal inventory trends."

Takeaways

  • Full year revenue -- $1.65 billion, up 4.6%, driven by diversified segment performance.
  • Adjusted EBITDA (full year) -- $367.6 million, or 22.3% of sales, improving from 22% last year.
  • Adjusted diluted EPS (full year) -- $6.19, an increase of 19% over the prior year.
  • Metal Coatings segment sales -- Rose 14.1%, delivering EBITDA of over $235 million, or 31% of segment sales.
  • Precoat Metals segment sales -- Declined 2.3% for the year and 2.4% in the fourth quarter due to weakness in construction, transportation, and HVAC end markets; EBITDA reached $176 million, 19.8% of segment sales.
  • Gross margin (full year) -- 23.9% consolidated, indicating continued operational discipline.
  • Operating income (full year) -- $265 million, up 12% year over year.
  • Avail joint venture equity in earnings (full year) -- $210 million, reflecting proceeds from divestitures; $287 million cash distributions received.
  • Fourth quarter revenue -- $385.1 million, 9.4% growth from the prior year, led by 25.7% Metal Coatings sales increase.
  • Fourth quarter adjusted diluted EPS -- $1.34, up 36.7%.
  • Fourth quarter gross profit -- $87.6 million, 22.7% of sales, up 30 basis points from the year-ago quarter.
  • Fourth quarter operating income -- $57.1 million, or 14.8% of sales; improved 330 basis points from last year's fourth quarter.
  • Fourth quarter interest expense -- $11.2 million, a $6.2 million reduction attributed to debt paydown and better loan pricing.
  • Fourth quarter adjusted EBITDA -- $81.3 million, 21.1% of sales, up from 20.2% last year.
  • Net debt to EBITDA -- 1.4x at year-end, after $385 million in debt reduction.
  • Capital expenditures -- $80.8 million for the year, including $7.9 million for the new Washington, Missouri aluminum coil coating facility.
  • Shareholder returns -- $23 million in dividends paid, and $20 million in shares repurchased at $99.28 average price per share.
  • Guidance for next fiscal year -- Sales projected at $1.725 billion (upper end inaudible), adjusted EBITDA of $360 million to $400 million, and adjusted diluted EPS of $6.50 to $7.00; debt reduction estimate ranges from $130 million to $170 million.
  • Metal Coatings segment guidance -- Expected mid-single-digit to upper-single-digit sales growth for the next year.
  • Precoat Metals guidance -- Anticipated flat year-over-year performance with 75% construction market exposure, including about one-third to residential.
  • M&A activity pipeline -- Three to four Metal Coatings targets in active discussion, including one near closing; Precoat Metals has one small active deal.
  • Capacity investments -- Planned kettle additions at North Texas and other locations, expected to generate incremental EBITDA impact upon commissioning.

Summary

AZZ (AZZ +8.82%) reported record sales and profitability, highlighted by strong Metal Coatings growth and strategic execution of targeted capital investments. AZZ completed construction and ramp-up of its new Washington, Missouri facility, expanding its reach in aluminum coil coatings. Management affirmed fiscal 2027 guidance, reflecting continued infrastructure demand and ongoing capacity expansion initiatives. The Avail joint venture contributed significant equity income and cash flow following business divestitures. Capital allocation remained balanced across debt reduction, organic investment, bolt-on acquisitions, and shareholder returns, positioning AZZ for further broad-based end market participation.

  • Infrastructure, data center, and power generation demand—cited as "structural, multi-year" trends by management—are central to AZZ's volume outlook.
  • Construction end markets, especially residential, are expected to remain flat or decline slightly, with 30-year mortgage rates projected above 6%, creating affordability challenges for Precoat Metals customers.
  • The acquisition pipeline is "looking good," with multiple bolt-on Metal Coatings transactions in discussion and additional capacity expansions planned for rapid deployment, indicating active growth initiatives.
  • AZZ took advantage of favorable loan repricing and cash distributions from the Avail joint venture to meaningfully reduce leverage, enhancing balance sheet flexibility.

Industry glossary

  • Hot-dip galvanizing: A corrosion-protection process in which steel is immersed in molten zinc to create a durable, rust-resistant coating, widely used in infrastructure and industrial markets.
  • Avail joint venture: AZZ's 40% equity-interest partnership holding assets in electrical and welding services, whose financial results are reported as equity in earnings from unconsolidated subsidiaries.
  • Coil coating: A continuous, automated process where metal coils (often aluminum or steel) are cleaned, treated, and coated with protective or decorative layers before fabrication.
  • Kettle addition: Expansion of galvanizing capacity by installing additional zinc baths (“kettles”) at fabrication sites to meet heightened or anticipated demand.

Full Conference Call Transcript

Tom Ferguson: Thanks, Phillip. Good morning, everyone, and thank you for joining us today. We delivered a strong close to the year and achieved record sales and profitability for the third consecutive year. I am especially proud of how our teams recovered from the major winter storm in late January to finish a strong fourth quarter. Full year sales totaled $1.65 billion, adjusted EBITDA surpassed $367 million, and adjusted earnings per share grew 19% year-over-year to $6.19. Our performance reflects the strength of our strategy, disciplined execution, operational excellence, and commitment to teamwork and a values-based culture across the organization. During fiscal 2026, we further fortified our competitive position by driving market share gains across our segments.

AZZ Inc. continued to win by delivering superior customer service and operating with discipline and consistency, while leveraging our proprietary technologies and galvanizing research capabilities to create differentiated value. Throughout the year, we made organic investments across both of our segments to enhance operating efficiencies and support our long-term growth. A key milestone was the completion of our greenfield Precoat Metals facility in Washington, Missouri. This investment advances our organic growth strategy and strengthens our Precoat Metals segment, expanding AZZ Inc.'s participation in the growing aluminum coatings and beverage-related end markets.

We further expanded our Metal Coatings platform last year through the acquisition of a galvanizing facility in Canton, Ohio, which extended our footprint and broadened our service offering for new and existing customers. At the same time, we continue to evaluate acquisition opportunities through a disciplined capital allocation framework while growing an active strategic pipeline of deals. Jason will cover our fourth quarter results in detail, so I will focus my remaining comments on the significant secular tailwinds that continue to propel our long-term growth. We are seeing momentum across our end markets driven by infrastructure-related investment themes that are reshaping the industrial landscape.

These include industrial reshoring, bridge and highway investments, hyperscale data center expansion, investments in power generation, transmission and distribution, and continued growth in renewable energy. Each of these trends is structural, multi-year, and increasingly central to our customers' capital spending priorities. As we have seen throughout the year, these markets rely heavily on galvanized steel and coated metal solutions—areas where AZZ Inc. brings meaningful scale, deep coating experience, operational reliability, and exceptional value. Our diversified portfolio positions us uniquely to be able to support large-scale, complex projects across multiple end markets and states, often simultaneously, and to do so with consistency and speed.

Together, these demand drivers and our differentiated operating model allow AZZ Inc. to capture market share and deepen existing customer relationships. Dave will share additional details on how industry dynamics translate into project activity in just a moment. We continue to drive incremental improvements across our network using our digital galvanizing system and Metal Coatings plants, and CooloZone in Precoat Metals. These systems strengthen customer engagement while driving productivity and margin improvement across our operations. Together, these custom digital capabilities reinforce our competitive advantages and support consistent, profitable growth. With that, I will turn it over to Jason.

Jason Crawford: Thank you, Tom, and good morning. Starting with a summary of results for the year, in fiscal 2026, which ended 02/28/2026, we reported record sales of $1.65 billion, up 4.6% from the prior year. For our core segments, we increased Metal Coatings sales 14.1% and generated strong EBITDA of over $235 million, or 31% of sales. For Precoat Metals, despite a modest 2.3% sales decline driven by industry-wide softness in residential and other key markets, we generated solid EBITDA of $176 million, 19.8% of sales. Consolidated gross margins remained robust at 23.9%, and operating income for the year rose by 12% to $265 million. Also for the full year, GAAP net income comparisons included two noteworthy matters.

First, in 2026, our Avail joint venture generated equity in earnings from unconsolidated subsidiaries totaling $210 million, primarily driven by successfully divesting businesses within the joint venture, which I will discuss in more detail in a moment. Second, for fiscal year 2025, GAAP net income available to common shareholders included a preferred stock redemption premium expense totaling $75 million. Adjusted net income, excluding these items plus intangible asset amortization and restructuring charges, resulted in adjusted EPS of $6.19, an increase of 19% on the prior year. In addition, consolidated adjusted EBITDA increased year-over-year to $367.6 million, or 22.3% of sales, up from 22% of sales a year ago.

Shifting to our quarterly results, we reported record fourth quarter sales of $385.1 million, representing a 9.4% increase from $351.9 million in the prior-year period. This was supported by strong double-digit sales growth from our Metal Coatings segment, up 25.7% year-over-year. Compared to the prior year, Q4 results benefited from continued momentum from higher infrastructure-related demand and less impact from inclement weather. Precoat Metals sales were down 2.4% for the same quarter of the prior year, primarily due to continued lower end market demand in pockets of construction, transportation, and HVAC. The company's fourth quarter gross profit was $87.6 million, or 22.7% of sales, up 30 basis points from 22.4% of sales in the same quarter of the prior year.

Selling, general and administrative expenses totaled $30.5 million in the fourth quarter, or 7.9% of sales. This compares favorably with last year's fourth quarter, which reported $38.3 million, or 10.9% of sales, inclusive of $6.7 million in accrued costs related to legal, retirement, and severance expenses. Operating income for the quarter was $57.1 million, or 14.8% of sales—an exceptional 330 basis point improvement compared with $40.4 million, or 11.5% of sales in the fourth quarter of the prior year. Also in the fourth quarter, we reported a net loss from the Avail joint venture equity in earnings of $21.7 million, primarily reflecting a loss on the sale of the welding services businesses and an unfavorable prior-period adjustment from Avail.

Excluding the loss on sale and prior-period adjustment transactions, the Avail joint venture's equity in earnings for the quarter was approximately $700,000, compared with $3.7 million for the fourth quarter of the prior year. Interest expense for the fourth quarter was $11.2 million, an improvement of $6.2 million from the prior year, driven by debt paydown from continuing operations, debt paydown from the Avail joint venture distribution, the issuance of an AR securitization loan with favorable pricing, and a favorable repricing of the term loan. The fourth quarter's income tax expense was $8.7 million and GAAP net income was $50.9 million, compared to GAAP net income of $20.2 million for the fourth quarter of the prior year.

We reported adjusted net income of $40.4 million, excluding intangible asset amortization and the Avail equity loss discussed earlier, resulting in adjusted diluted EPS of $1.34, up 36.7% versus a year ago. Fourth quarter adjusted EBITDA was $81.3 million, or 21.1% of sales, compared to $71.2 million, or 20.2% of sales for the same period last year. Turning to our financial position and balance sheet, consistent with our capital allocation priorities for the year, we executed with discipline across our balance sheet, growth investment, and shareholder returns. We reduced debt by $385 million and ended the year with a net debt to EBITDA ratio of 1.4x, providing significant financial flexibility moving forward.

We continue to invest in the foundations of the core businesses. During the year, we invested $80.8 million in capital expenditures, a growing portion of which was dedicated to internal growth initiatives. Also included within our capital expenditures was approximately $7.9 million on our new Washington, Missouri facility. Over the past three years, we have invested approximately $125 million in this aluminum coil coating facility, with the team delivering the project on time and on budget. With the facility now fully operational, volume continues to ramp in alignment with our partner customer and was profitable at the contribution margin level in Q4.

Finally, rounding off our investments for the year, we further strengthened our Metal Coatings segment by acquiring a galvanizing facility in Canton, Ohio for approximately $13 million, demonstrating our commitment to grow the core businesses organically and inorganically. At the same time, we remain committed to returning capital to our shareholders. During the year, we paid $23 million in cash dividends and repurchased $20 million in shares at an average price of $99.28 per share. Together, these actions reflect a disciplined approach to capital deployment and our focus on creating long-term shareholder value. For the remaining Avail joint venture investment, we account for our 40% interest as equity in earnings of unconsolidated subsidiaries, which also constitutes a separate operating segment.

In 2026, Avail generated equity in earnings of $210 million, which includes the sale of its electrical and welding businesses, and provided cash distributions of $287 million during the year. AZZ Inc.'s cash flows from operations of $525 million include $273 million of cash distributions from Avail, net of the associated taxes paid. The remaining $14 million of cash distributions from Avail were classified as cash flows from investing activities. Finally, as expected, 2026 cash taxes were higher in the year associated with higher equity earnings from Avail, offset somewhat by positive effects from the One Big Beautiful Bill Act on depreciation, R&D expenses, and interest expense. With that, I will turn the call over to David.

David Nark: Thank you, Jason. Good morning, everyone. Consistent with our disclosures found in the company's 10-Ks, total sales for the full year grew at 5% as compared to the prior fiscal year. Construction, our largest end market, grew at 3%, while electrical and industrial delivered strong double-digit sales growth resulting in 1715% growth rates, respectively. As Tom noted, AZZ Inc. continues to benefit from early stages of a longer investment cycle driven by sustained U.S. infrastructure-related spending and the continued expansion of large data centers. These often pair with the construction of significant co-located power generation, driving our electrical, industrial, and construction end market results.

Our consumer end market performed well, growing at 6% on higher volume of coated aluminum, driven by the shift from plastic to aluminum in the beverage market and the continued ramp of the new Washington, Missouri facility, while our transportation category declined by 3% due to weaker overall end demand for semi-trailers. Looking forward, industry research characterizes the AI data center build-out as more structural rather than cyclical, and the U.S. data center electricity demand is expected to roughly double by the end of the decade. Despite ongoing geopolitical and interest rate uncertainties, we believe AZZ Inc.'s demand is driven by fundamental shifts in the economy rather than traditional construction cycles.

External forecasts indicate that U.S. hyperscale data-related spending will be approximately $700 billion in calendar year 2026, with AI investments accounting for the majority of that capital. This infrastructure-heavy spending environment aligns well with our end markets. Modern data center construction requires advanced corrosion protection and usually drives significant investments in on-site power generation, grid reinforcement, and transmission infrastructure. These are complex multiyear projects that require substantial hot-dip galvanized content. As a result, our Metal Coatings segment is well positioned to support this expanding market. Excluding data centers, we anticipate non-residential construction will continue to remain subdued in fiscal year 2027, primarily driven by interest rate, geopolitical, and lingering tariff-related uncertainties.

Within the residential housing market, current industry research indicates that single-family housing starts are expected to be flat to down low single digits as a large stock of homes already under construction dampens new starts. Additionally, current estimates project 30-year fixed mortgage rates will remain above 6%, limiting affordability and slowing demand for new construction. As a result, builders are increasingly focused on finishing existing projects and offering incentives to reduce current inventory. We expect the softness in both non-residential and residential construction may provide a headwind for our Precoat Metals segment in the current fiscal year. With that, I will now turn the call back over to Tom.

Tom Ferguson: Thank you, Dave. We anticipate the number of data center projects entering the construction phase in 2026 will increase, which will drive further infrastructure build-out. Importantly, our customer demand is not isolated to data centers. We are seeing continued strength across key end markets, including bridge and highway construction, power generation, and electrical transmission and distribution, all of which are supported by long-term secular tailwinds. These projects drive sustained demand for hot-dip galvanizing services and may create incremental opportunities for Precoat Metals solutions. We win in competitive markets because we provide delivery reliability, high quality, and speed of execution. While we are off to a good start in the first quarter, it is early in the year.

So today, we are reiterating our fiscal 2027 guidance. Sales are expected to be in the range of $1.725 billion to [inaudible], adjusted EBITDA in the range of $360 million to $400 million, and adjusted diluted earnings per share in the range of $6.50 to $7.00. We estimate debt reduction to range from $130 million to $170 million in fiscal 2027. We are confident that our strong financial and market positions will enable us to capitalize on strategic growth opportunities while executing on our broader capital allocation plans. Due to our strong balance sheet and desire to provide above-market growth, we will remain selectively aggressive in our approach to M&A opportunities.

We focus on investments to strengthen our Metal Coatings and Precoat Metals segments, expand our geographic reach, and deepen customer relationships. Using a proven disciplined playbook, we are pursuing opportunities that reinforce our competitive advantages and deliver sustainable returns for our shareholders. As we look ahead, we are confident in AZZ Inc.'s ability to consistently improve performance and execute at a high level while delivering profitable growth and long-term value for our shareholders. Finally, I am proud to recognize AZZ Inc.'s thirty-ninth consecutive year of growth and profitability from continuing operations. This achievement is a direct result of the dedication, expertise, and commitment of our employees across the organization.

Our focus on safety, quality, customer service, and execution continues to differentiate AZZ Inc., and I want to sincerely thank our teams for the outstanding work they do every single day. Now, operator, we would like to open the call for questions.

Operator: We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please signal at this time. We will pause momentarily to assemble our roster. The first question today comes from Ghansham Panjabi with Baird. Please go ahead.

Ghansham Panjabi: Thanks, operator. Good morning, everybody. I guess first off on Metal Coatings—obviously very big year last year from a volume standpoint, including what you delivered in the fourth quarter. If you could just share with us what you are embedding for growth specific to fiscal year 2027 for the segment? And then for Precoat, if I understood you correctly, I know you called out some headwinds as it relates to residential construction. Are you expecting a worsening of the trend in terms of volumes or just headwinds that may be offset with other tailwinds, including your Washington, Missouri plant?

Jason Crawford: Morning. I can pick that up. From a Metal Coatings point of view, if you look at the projections for next year, we are somewhere in the mid-single to upper-single digits for that business, obviously ending the year very strongly, and that builds momentum coming into the year. As you look at the Precoat Metals business, it is in and around where we have seen them—so relatively flat year-on-year as you look at the overall market. Where they have the benefit is they have a better comp year-on-year to compare against versus the Metal Coatings business, which has a little bit more difficult comps. So one is mid- to high-single digits; the other is relatively flat.

Ghansham Panjabi: Okay. And then for Precoat, just to clarify, what is your exposure towards residential construction for that segment?

Jason Crawford: Yes. I think as you look at the overall market that they cover, around 75% of their end markets are driven by construction. Then round about a third of that has that residential exposure.

Ghansham Panjabi: Okay. Thank you for that. Then just for my second question, as it relates to zinc prices—and maybe you can comment on your run-of-the-mill basket trends in context of what has been happening with commodities more broadly, obviously the events in the Middle East, etc. What are you seeing at this point, and how are you managing through that?

Tom Ferguson: Yes. I think from a zinc perspective, there has not been much effect. Prices were trending up before all of the disruption and, as you know, that is about six to eight months in our kettles and we were feeling that coming into the year anyway. There is also general inflation going on within both segments—whether it is paint prices going up, which is more of a pass-through on the Precoat side—but on the galvanizing side, it is acids, caustics, chemicals, as I like to call it, soap, rope, and dope. All that stuff is inflating, and we, you know, that is why we call it value pricing. We try to keep up with pricing.

The one thing we are doing from a surcharge perspective is in relation to transportation, fuel costs, things like that, because we do have a large fleet of our own trucks and trailers. So there we are using surcharges to offset that and make sure we protect our margins. We are not seeing that change. Hardly a day goes by anymore that we do not get some price increase from suppliers. And so both segments are pushing price to offset that and maintain margin, and it seems to be expected in the marketplace now because everybody is facing the same issues.

Operator: The next question comes from Daniel Rizzo with Jefferies. Please go ahead.

Daniel Rizzo: Thank you for taking my questions. So just thinking about the Precoat market, obviously higher interest rates are an issue, but are there other meaningful affordability issues that you can pinpoint for the commercial market? I mean, I think we all understand what happens with residential, but for non-res, I was wondering if there are other things that are kind of a factor that are a hindrance besides, again, high interest rates.

David Nark: Yes, Daniel. Really pretty much everything we described in the remarks. When you think about non-residential, we have seen project costs overall in some of our end markets and customers go slightly up and get inflated due to some of the things Tom mentioned. Obviously, when we put our budget together, the war in Iran had not started yet, but we have seen some escalation there. And again, interest rate uncertainties, I think, are going to be the main thing on the residential side.

Tom Ferguson: And I would add that one of the things we are facing is availability of substrate. With tariffs on imports and domestic supply ramping up, there are some constraints in terms of available substrate to be painted. Some of our customers are experiencing that, which drives them to wait and probably to inventory less—wait until it is closer to the demand for the season, then go ahead and place orders to be able to best utilize the substrate that is available. That is one of the things we are seeing, which tends to drive us to—this fits our profile—quick turnarounds, small lots, lots of customization.

That is a little bit of an underlying trend, which does increase costs on projects and also makes demand a little harder to predict because they are not buying to normal inventory trends.

Daniel Rizzo: More so for Metal Coatings, is backlog a thing just given the size of your projects and what people are planning out? I assume years ahead, but I was wondering if you have a sizable backlog, or is that just something that is not part of your business?

Tom Ferguson: Yes, it is really not part of our business. I say this jokingly: a lot of our sites look out on the yard and then that is their demand and backlog for the week. We are really good at turning stuff, and so our customers depend on the fact that we are very, very reliable—they get it to us on Monday, we are going to have it back to them on Friday. We are aware of it because in our sales process we are forecasting it. As customers are communicating to us, their demand is going to be month in, month out, and even week in, week out. We feel really good on the Metal Coatings side right now.

Most of our customers show a broad-based growth profile in infrastructure, so it is not any one thing—whether it is data centers, poles, towers, substations—and then all of the stuff that has to go in, whether it is roads, lighting, electrical systems to support data centers and substations and things like that. It is a really broad-based market, and our network of facilities plays well to it. We do not record backlog that way, but we can look forward and say our customers are bullish on demand in the Metal Coatings space.

Operator: The next question comes from Adam Thalhimer with Thompson Davis & Co. Please go ahead.

Adam Thalhimer: Hey. Good morning, guys. Congrats on the strong quarter and the strong year. On the data center piece, how are you guys handling the demand? I mean, do you have certain facilities that seem to be dedicated towards those projects? And then from a disaggregated sales standpoint, do you put that revenue into construction or into industrial or some other bucket?

Tom Ferguson: I will let David answer the second part of it. On the first part, we just had our annual Metal Coatings plant managers and sales managers meeting, and we had about 120 folks in there. There was hardly a single plant manager or sales manager I talked to that is not working on one, two, or three data center projects at any given time right now. So it is very, very broad-based. What customers like about us is we have a network of facilities, and so we can handle large projects across multiple facilities, or in many cases one facility can handle the entire project.

That gives them surety of delivery, reliability of execution—all those kinds of things that just play well for picking AZZ Inc. for your galvanizing.

David Nark: In terms of how we code it, that gets a little dicier. There is some variation in how it gets coded based upon how the order really comes to us—whether it is from a general or a dedicated project development team, etc. Sometimes we will see that show up, as you can see in our end results, by electrical and industrial because we can visually see it and we know that, for instance, it is a monopole and that is obviously going to be in electrical.

Whereas some of the structures—and you have been to some of our plants, Adam, so you have seen some of the things that we are working with—it can be a little more unclear as to whether it is going into a data center or if it is going into an LNG project, for instance. So that sometimes will get a little bit more clouded and will go into either construction or industrial as a result.

Adam Thalhimer: Okay. Good color on that. And then I wanted to ask about M&A—potential M&A. You mentioned the pipeline of deals. Can you just update us on what the pipeline looks like and potential timing?

Tom Ferguson: The pipeline is looking good. On the Metal Coatings side, mostly what we are looking at are one-off sites. If you just kind of take our average fleet sales and EBITDA, call it $15 million in sales and $4 million to $6 million in EBITDA—that is the size we are looking at in terms of bolt-ons. We have three or four in fairly active discussions and have one underway in due diligence. I would love to get one closed before we talk again and see if David and his team can get a couple more closed this year. On the Precoat side, we have one that I will call in active discussions.

It is not a big one, so it is kind of a single-line sort of thing. That about sums it up. There are obviously the bigger things that we are looking at, but they are going to be further out. I do not know that I would project any of the larger ones for this year.

Operator: The next question comes from Nick Giles with B. Riley. Please go ahead.

Nick Giles: Thanks. Good morning, guys. My first question was just CapEx—CapEx is around $90 million at the midpoint. I saw in the assumptions that hot-dip capacity expansions are part of that. Can you speak to what the potential EBITDA impact could be and how much of those expansions are embedded in this year's guide versus something that may be more visible next year?

Tom Ferguson: Thanks. We are looking at adding kettles. We are adding one here in North Texas because of demand. It will be starting up here in the next month or so, so it is going to have some impact. I am struggling to want to publicly say what a new kettle is worth in terms of EBITDA, but it is going to have an impact. It is at a large site, so it is going to give us incremental capacity. We are also looking at other locations to add kettles. Those are fairly quick—we approved the one I talked about just a few months ago, and it will be up and running this quarter, or by June 1.

So not long cycle times on these things. Hopefully it has a couple million impact in EBITDA. If you ask the Metal Coatings team, they would say it is embedded in their forecast. If you ask me, I would say maybe, maybe not. Other things we are doing include in-ground line coating—that is common with poles and towers and things like that—so we are doing more of that just because of transmission distribution.