Operator: Welcome to the First Quarter Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask a question, you may press star then 1 on a touch-tone phone. Please note this event is being recorded. I would now like to turn the conference over to Phillip Kupper, Managing Director of 3 Part Advisors. Please go ahead.
Phillip Kupper: Good morning. Thank you for joining us today to review AZZ's fiscal 27 first quarter results for the period ended 05/31/2026. Joining the call today are Tom Ferguson, President and Chief Executive Officer Jason Crawford, Chief Financial Officer and David Nark, Chief Marketing Communications and Investor Relations Officer. After today's prepared remarks, we will open the call for questions. Please note that the live webcast for today's call is available at www.azz.com. Forward slash investor dash events. Before we begin, I would like to remind everyone that our discussion today will include forward-looking statements made in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 2000. By their nature, forward-looking statements are uncertain and outside the company's control, Except for actual results, AZZ's 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 latest annual report on Form 10-K and quarterly reports On Form 10 Q. 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 will discuss non-GAAP financial measures, which should be considered supplemental and not as a substitute for GAAP financial measures. We refer shareholders to our reconciliations from GAAP to non-GAAP measures contained in today's earnings press release. Would now like to turn the call over to Tom Ferguson.
Thomas E. Ferguson: Thank you, Phillip. Good morning, everyone, and thank you for joining us today. We appreciate your interest in AZZ and the opportunity to discuss our first quarter fiscal 27 results. We are off to a strong start. For the first quarter, we delivered record sales in both segments generated solid cash flow, maintained a strong balance sheet, announced raising our dividend raised our full year guidance. These results reflect the strength of our strategy, the durability of our end markets and the continued execution of our teams. Our results consistently reflect our ability to convert demand into high quality profitable growth. We continue to leverage our market leadership positions in both metal coatings and Precoat metals to expand earnings and generate robust cash flow while investing strategically to extend our competitive advantages. In Metal Coatings, we are investing in added capacity where demand supports attractive returns. In North Texas, for instance, we successfully commissioned a new large kettle to meet growing regional demand for hot dip galvanizing. Effectively doubling our capacity at Crowley, Texas. This low risk, high return investment supports growing customer demand and strong market fundamentals. David will discuss U. S. End market demand in more detail in just a moment. Additionally, a key element of our growth strategy is identifying innovative ways to grow share and deepen customer partnerships. 1 example of this is a vertically integrated manufacturer who chose to partner with AZZ to divest its non core galvanizing operation to reduce complexity and cost. As part of this agreement, we acquired their galvanizing kettle and zinc. Providing them with immediate cash liquidity while securing a long term service agreement. We believe this de verticalization model creates value for our customers while delivering long term revenue streams for AZZ. We view this as a scalable blueprint for future partnerships. At PreCo Metals, our Washington, Missouri facility continues to ramp production as planned. We remain on track to reach targeted utilization with our strategic partner while actively seeking commercialization of the remaining capacity. The facility is approaching expected contribution margin levels for this year. And performance with our partner in this beer and beverage related container category has been very encouraging. Across both segments, our focus remains clear, increased share of wallet, capture incremental market share and deploy capital into high confidence organic and inorganic growth opportunities. These investments drive operational efficiencies and position us to deliver sustained long term growth. Underlying all this progress and momentum, are our structural advantages that differentiate AZZ. Including our proprietary technologies. In Metal Coatings, our digital galvanizing system drives consistency, efficiency, data-driven decision-making at scale. In Precoat Metals, CoilZone enhances customer visibility with real time insights that improve throughput and enable benchmarking across our footprint. These digital capabilities are not just operational tools, they are at-scale, strategic assets that strengthen customer relationships improve execution and are forming the basis for utilizing AI to improve customer intimacy, fine tune pricing decisions and support operating efficiency improvements and sustainability. Looking ahead, we remain confident in our ability to execute on our strategic priorities winning in our markets, deploying capital with discipline, investing in high value capacity expansion, delivering superior customer service and leveraging AZZ's differentiated capabilities. Collectively, these efforts position us to drive profitable growth enhance shareholder value, and reinforce our leadership across our end markets. With that, I will turn it over to Jason.
Jason Crawford: Thank you, Tom. We delivered record first quarter sales of $448.5 million, up 6.3% year over year driven by strong double-digit sales growth up 12.3%. This performance reflects continued momentum across construction, industrial and infrastructure end markets. Precoat Metal sales increased 1.5% year over year, supported by the pass through of higher paint and input costs and the continued ramp up at our Washington, Missouri facility. Partially offset by softer volume in certain construction, HVAC and appliance end markets. From a profitability standpoint, gross profit was $112.2 million or 25.0% of sales, representing a 30-basis-point improvement year over year. This reflects favorable mix pricing discipline and improved operational execution. SG&A expenses were $35.1 million, or 7.8% of sales compared to 8.2% last year. Even after excluding the $2.2 million non-cash retiree incentive charge in the prior year, we demonstrated good cost control while supporting growth. Operating income increased to $77 million or 17.2% of sales, an improvement of 70 basis points versus the prior year reflecting strong incremental margins on higher volumes. Turning briefly to the Avail JV, as a reminder, our first quarter of the prior year included $173.5 million of total equity and earnings of which a substantial portion was related to the divestiture of its Electrical Products Group. While this creates a difficult year over year comparison, it is important to note that our current results reflect our 40% interest in the remaining business. Our JV partner continues to pursue the divestiture of its remaining Avail operations. Interest expense improved to $11.3 million, down $7.3 million from the prior year driven by deliberate debt reduction following the Precoat distribution and financing optimization initiatives discussed in more detail in our SEC filings. This highlights the strength of our balance sheet, support from our capital market partners and our continued focus on reducing debt and the company's cost of capital. First quarter's income tax expense of $14.0 million reflects an effective tax rate of 21.2% compared to 22.2% last year when we exclude the impact of the JV equity earnings. GAAP net income was $52.0 million and adjusted diluted EPS was $1.85, up 3.9% year over year demonstrating continued earnings growth despite the absence of the prior year JV related earnings. Consolidated adjusted EBITDA was $99.5 million or 22.2% of sales. Infrastructure Solutions adjusted EBITDA dropped from $7.6 million in the prior year first quarter to a loss of $0.8 million in the current quarter. Reflecting the impact of the business divestitures in the Avail JV that occurred throughout fiscal year 26. In our Metal Coatings segment, an increase in large projects and the sale of land in the prior year quarter contributed to a drop in year-on-year margins. While margins in our Precoat Metal segment improved modestly, on operational performance and mix from our Washington, Missouri facility. Importantly, underlying margins remain strong and consistent with our long term expectations. As Tom noted, our Washington, Missouri facility volumes continued to ramp in line with expectations and remain on track to contribute meaningfully to revenue and profitability as we move through fiscal year 27. In addition, we are starting to make progress in commercializing the remaining capacity at this facility. Turning to our balance sheet and capital allocation. We generated $37.1 million of operating cash flow in the quarter driven by earnings growth and disciplined working capital management. Our net leverage remained low at 1.4x providing significant flexibility to fund growth and return capital to our shareholders. Capital expenditures totaled $18.7 million, with a growing focus on high return organic investments. We recently increased our quarterly cash dividend from $0.20 per share to $0.24 per share, representing a 20% increase and further underscoring our confidence and the sustainability of our earnings and cash flows. In addition, we continue to maintain a strong share repurchase program with $133.2 million available However, no shares were repurchased in the first quarter. Overall, our capital allocation priorities remain unchanged, that is, to maintain a strong balance sheet invest in high return growth opportunities and return excess capital to our shareholders. With that, I would like to turn the call over to David.
David Nark: Thank you, Jason, and good morning, everyone. This quarter, we have enhanced our disaggregated sales disclosure in the 10 Q to provide greater transparency and improved end-market comparability. Our reporting now reflects 6 primary categories. Construction, which remains our largest end market and includes commercial, residential, agriculture and data centers Industrial, mainly comprised of processing plants for a variety of applications including power, food and water as examples. Infrastructure includes electrical, transmission and distribution solar, petrochemical and bridge and highway projects. HVAC and appliances includes both residential and commercial HVAC as well as appliance. Transportation includes truck, trailer, bus and RVs, and finally container which represents food and beverage related end markets. Our other category represents all other miscellaneous sales. This updated framework better aligns our disclosures with how we manage and evaluate the business and no longer calls out consumer or electrical. Now, turning to performance. Consolidated sales grew 6.3% year over year. Construction grew at 3.9%, driven by continued strength in large data center and manufacturing related projects. Industrial sales increased by 7.8% supported by increased demand for utility scale power projects. Container was up 194% primarily resulting from the ramp at the new Washington, Missouri plant as mentioned by both Tom and Jason. While infrastructure was essentially flat compared to the same quarter in the prior year, with mixed results by segment. Offsetting our growth in construction, Industrial, and Container end markets were Transportation, down 1.2% on lower commercial trailer activity and HVAC and appliances down 2.4% on lower residential new construction. Looking ahead, we believe we are in early stages of a significant and sustained investment cycle. Modernizing the aging electric grid to support our nation's accelerating electricity demand will require a meaningful step up in capacity and capital deployment. This dynamic combined with ongoing investment in infrastructure, energy and industrial capacity supports our view that a once in a generation infrastructure rebuild is underway. Our thesis is that AZZ is well positioned to benefit from a multi decade capital investment cycle across utility, transmission, distribution and grid technology. Importantly, these trends are not cyclical. They are structural long duration drivers that are increasingly central to our customers' capital spending priorities. We continue to see strength at the customer level. For example, 1 of our largest galvanizing customers has recently reported a 35% growth in their utility related structures backlog. While we do not operate the business on a backlog basis, this customer's demand forecast along with others provides confidence in future activity and the durability of certain end markets. With that, I will turn the call over to Tom.
Thomas E. Ferguson: Thank you, David. Adding to David's commentary on industrial infrastructure and utility momentum, we are evaluating how our footprint aligns with anticipated demand. Regionally, the Southern U. S. Beginning with Texas, and expanding East through key growth states is expected to account for nearly half of the country's proposed utility capital spending. This reinforces our recently completed capacity expansion in North Texas. Which we believe is both well timed and strategically aligned with our growth priorities. Reflecting strong sales momentum, and operational resilience, we are confident in raising our fiscal 27 outlook. We now expect sales of $1.8 billion to $1.85 billion adjusted EBITDA of $375 million to $415 million adjusted diluted EPS of $6.75 to $7.15 As we drive growth, we also expect to reduce debt by $130 million to $170 million in fiscal 27. Demonstrating our continued commitment to balance sheet strength alongside expansion. Looking forward, our strategy remains clear and consistent. We are scaling the business through a combination of organic investments, market share gains, and a disciplined M&A approach. We are actively evaluating a robust pipeline of high quality acquisition targets that align with our core capabilities and meet our return thresholds. We expect to announce a deal later this month. We are also evaluating greenfield galvanizing opportunities where we can partner with strategic customers. These efforts position AZZ to capitalize on what we believe is a long duration secular growth cycle driven by increasing demand for infrastructure, electrification, data centers and grid modernization. At the same time, aging infrastructure across North America continues to require significant reinvestment. Further reinforcing the long term opportunity set. Our confidence is reflected in the Board's recent decision to increase our quarterly cash dividend to $0.24 per share. Finally, we believe AZZ is uniquely positioned operationally, strategically and financially to deliver sustained profitable growth and long term shareholder value. Before we open the call to questions, I would like to recognize and thank our employees. I am proud to work alongside such a talented and dedicated team that brings pride and passion to everything they do to serve our customers. Now, operator, we are ready to take questions from analysts.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1. If you are using a speakerphone, please pick up your handset before pressing the keys. To assemble our roster. The first question today comes from Ghansham Panjabi with Baird. Please go ahead.
Ghansham Panjabi: Hey, guys. Good morning. it is actually Josh Vesely on for Ghansham. Thanks for taking my question. Maybe Tom, if we could just start off on just the overall market conditions. Obviously, sounds like end market demand is pretty robust for you guys. But just in terms of the volatility over the past few months with energy costs from the Middle East, etcetera, Just curious how that is kind of translated into customer decision making, how they are thinking about going forward with projects? Are they getting delayed right now and getting pushed into the back half of the calendar year? Any way any thoughts on year end would be great.
Thomas E. Ferguson: Sure. Sure thing, Josh. You know, a couple of things. 1, on the metal coating side, I think, the markets are robust. You see it in the growth in the quarter and, and, you know, has taken our guidance up is because we see a lot of strength there going forward for at least the balance of this calendar year. there is been talk of project delays, you know, depending somewhat on interest rates or energy costs, things like that. But for the most part, the things that we are seeing they have got to put towers and poles in the ground. They have got to continue to improve the grid. And then data centers, there I would say the majority of our plants have at least 1 data center project going on at any given time lately. So we have not seen much in terms of headwinds there. Matter of fact, it is mostly stuff moving forward, customers converting capacity where they can focus more on poles, towers and things related to electrical infrastructure. On the Precoat side, I would say we have in, you know, we had encountered the tariff impact which has made substrate less available many ways or of higher cost. I think that is that is probably stabilized at this point as we are looking forward. So not much more impact on tariffs and the substrate prices have gone up. It could actually bring some imports back into play, which is generally good for our customers on the Precoat side. So I think everything we are looking at, it is pretty positive. And we feel like either like, on Precoat, we have bottomed and stabilized in terms of market conditions. We are benefiting from the container demand on the new especially for the new Washington site, which has ramped up according to schedule and then pretty much hitting its pace now. In almost at its run rates, you know, early. And on the metal coating side, there is just not a lot of not a lot of clouds on the horizon. Obviously, we battle it out at 48 sites every day, but most of those sites are I would say we are winning every day.
Ghansham Panjabi: that is great. Thank you for that. Maybe just for my second question, Tom, on that de verticalization that you are talking about with your customers. Just any more color on that would be great. I mean, it sounds like a lot of it is maybe customers that you kind of serve capacity for right now. Is that correct? And is this a trend that is kind of growing across your customer base? How should we think about that?
Thomas E. Ferguson: Yeah. it is something we talk about and we talk to a lot of our customers about it. If they have got a kettle and especially when that kettle goes down and they have got to replace it or repair it, that is a great time for our teams to be in there talking to them. Why do you want to go through this headache? We have got you know, plants within relatively short distances from you. We can negotiate a long term agreement, and we can take can take that furnace and kettle off your hands and give you a decent price for your sink. So we are having those conversations with customers all the time. there is, you know, a target list of those. We are happy that we finally got 1 closed. We had not done 1 of these since I would say about 5 or 6 years now. So, we would love to see this turn into and that is why we wanted to talk about it because we just want to make sure our customers we have got their attention that this is something we can do. And we are happy to deploy some of our capital towards you know, helping them with what we think is a better long term solution for them. And we just like to think we are a whole lot better at hot-dip galvanizing than they probably are, since it is not their focus. that is great. Thank you, guys.
Operator: The next question comes from Nick Giles with B. Riley. Please go ahead.
Nick Giles: Thank you, operator, and good morning, everyone. This is actually Gerry Hurl on for Nick Giles. Maybe to start off To start off on M&A, it is been in the background for a while now and you mentioned likely announcing 1 this month. I am just curious on what some of the gating factors might be willing sellers, sites that make sense geographically. Any color there would be really helpful. Thanks.
Thomas E. Ferguson: Yeah. I think, you know, we have the 1 I am hoping we are going to close, I would say we got a little bit rusty even though we did, a CAM and Galv last year. Normally, I would like to see us get these done at 45 to 75 days, and this 1's kind of dragged along for about 6 months now. So, particularly on a what I call a 1 off galvanizer. So you I think this is, us being disciplined and making sure that you know, it is not just that we are crossing the T's and dotting the i's. it is you know, that we have got to have a sense of urgency about getting these things done and because they are just dragging, of course, it costs us money to do that, but it also delays our ability to take them on and get them into our process and our playbook. So there is more out there. I think we are having a lot of conversations. The obviously, galvanizing market is fairly hot right now. So some of these owners, think they are kind of sitting on what they view as good demand at the moment and just not at that peak point where they are ready to transact something. But, I would say our guys are having conversations every week, every month with, you know, a pretty good number of these independent owners, and, I would like to see more of them break loose We are paying better multiples than probably we have historically, but it is, you know, part of that is just the our ability and our confidence in our ability to drive the synergies grow those businesses. So you know, I am hoping some more break loose. But it will be good to get this next flag on the map for us. And then on the Precoat side, we are also working some things. Obviously, those are typically bigger, but just they would still be a bolt on because we want to be able to bolt it on, drive the synergies, run the playbook and not disrupt anything. So we are not looking for anything like a third leg.
Nick Giles: Got you. that is very helpful color. And then just to confirm, would the 1 that might close at the end of this month, would that be the same 1 you mentioned on your last call that was in due diligence? that is correct. Okay. And then for my second question, Q1 came in really strong here. And your EBITDA run rate is now at the higher end of your updated guide. As we try to model, 2Q and 3Q knowing 4Q tends to be softer, are there any seasonality or other factors we should be keeping in mind? Thanks.
Thomas E. Ferguson: No, we are feeling pretty good. I mean, the things that affect us fourth quarter is usually tell us what the severity of the winter is going to be and we will tell you what our forecast is for that quarter. But I think which is why we will, you know, reforecast that as we get towards the as we can see what winter is stacking up to be. But in terms of summer and early fall right now, there is nothing on the horizon that gives us any concern. If a hurricane pops up, usually that unless it hits our sites directly, it is it is usually more positive than negative for us. So, not that we are projecting any. But, yeah, there is nothing within our control or that we are hearing from our customers that would indicate we are going to see anything unusual. So we would anticipate second and third quarters tracking. I will say we have you know, we are almost halfway through the second quarter and we got off to a really good start. So we are feeling good. Understood. Thanks a lot and continue the best of luck. Thank you.
Operator: The next question comes from Daniel Rizzo with Jefferies. Please go ahead.
Daniel Rizzo: Hey, guys. Thanks for taking my questions. Just you mentioned well, a couple of things. 1, you mentioned, like, potentially doing some greenfield facilities with customers. For you to build that, would there be, like, the customer have to be responsible for or agree to taking on 75% of EBITDA? How would it be structured Is it like a take or pay component I mean, any color? And I guess, what would be the cost to you guys in terms of CapEx?
Thomas E. Ferguson: Yes. On the galvanizing side, we typically on PreCoat, we went with the take or pay because it was a huge investment and particularly for AZZ, we were new into Precoat. So we wanted to make sure that we had the demand there and that we had a great partner customer committed. For galvanizing, we are just usually looking for anchor customers. So usually existing customers that we do a lot of business with, but maybe they have expanded the site. They have and they are investing in a new some new production capacity. And we want to be partnered with them. So we are not looking for a contractual arrangement. I would just say we probably have about a dozen sites that have that anchor customer that makes up anywhere from 10 to 25% of potential of volume. And as long as we have got that kind of knowledge and clearly the relationship yeah, we do not require a contract. We are typically probably with inflation the way it is been on materials, kettles, furnaces, everything else, which you have seen in our run rate CapEx. We are looking at $35 million to including real estate. Or even, say, somewhat dependent on the cost of the real estate in some cases. 18 months build out and then you know, ramp up. And because they are, you know, we are we are talking to what we would consider anchor customers. The ramp up should be much quicker than we did in Reno, which was our last greenfield plant. And the ramp up took longer. We did not have an anchor customer in the area. We did it just because it was a high growth region that had a lot of potential for the future, which we are very pleased with at this time.
Daniel Rizzo: Are there other high growth regions you could point to? I do not know if you can do that on public call or anything like that. But places you are looking within the US or wherever?
Thomas E. Ferguson: Yes. I think when yes, I am not going to point to anything specifically. When once we commit to some real estate, we will get an announcement out and let folks know where we are at and what we have committed to. there is quite a few. You know, when we look at a map, even though we have got 42 hot dip galvanizing plants, there is still quite a bit of open space out there with growth. You know, we tend to be either in the high growth states like Texas right now and some of the Southeast and but, yeah, there is there is several places where we think we could provide a better solution than some of the competitors and provide closer to some of the customer concentration. So it is and I would say this is this is a balanced strategy. If we could buy decent competitors in the area, we would love to do it. But these are areas where there is some competition, but not going to be willing to sell. So that brings forward greenfield opportunity. Particularly when we are talking to major customers who want to have that discussion. Thank you very much. Sure thing.
Operator: The next question comes from Adam Thalhimer with Thomas Davis Co. Please go ahead.
Adam Thalhimer: Hey, good morning, guys. Congrats on the strong Q1. Good morning. Hey, Tom, I wanted to ask and you have talked around this, but I still feel like it is worth asking. You guys beat the first quarter on the EBITDA line by $2 million, but you raised the full year guide by at the midpoint by $15 million, which is a pretty it is a strong move, and I am just curious what gave you the underlying confidence to do that.
Thomas E. Ferguson: Yes. Part of it is that the new Washington site, it is hit its dates and commitments and so we are feeling bullish about that new site and working with our partner and what they are telling us. So chunk of it is just tied to the new site getting to its run rate targets and we believe being sustainable at those run rates sooner than we had budgeted for, if you want to call it that. So that is 1 piece of it. As I mentioned on the Precoat side, there is a couple of things going on. We are seeing know, even though the markets in some areas are still soft because of the lack of substrate, Still, you have got paint price increases that have gone through. You have got and we have got our usual material burden and stuff we put on top of that. And then we have we are pushing price to either keep up with material inflation and in some cases we have added well, we are we are adding surcharges on the zinc because zinc has stayed high. So you factor all those things in, and we felt good about taking the EBITDA up significantly more than what we had generated in the first quarter. Awesome. Yeah. it is great to see.
Adam Thalhimer: And then on the expansion at Crowley, is that fully ramped yet? And I am curious if there are other facilities where you could do the same thing adding a kettle.
Thomas E. Ferguson: Yeah. So, you know, it is always nice when we can do that. it is not even really a brownfield. We are basically we were structured to be able to tuck in that second kettle and ramp it up. Had the demand for it. So we feel good about that. that is another piece as we look at the outlook for the for second half of the year that will be at full run rates. it is we have got others, you know, we look at this, Texas, it is just a hot market. I would say there is a probably couple others. The other thing we are doing is we talk about secondary services. So as we put in groundline coating and things like that, so we have done that in a couple of sites. Put in a spin kettle not that long ago. These are things we are continuing to look at. And I do not think we have another kettle ready to go for the balance of this year. But as we get to the planning process, we will start looking at that. This was 1 that we pulled forward, late last year, which is why we are able to get it ramped up this early in the year instead of waiting. So, you know, we will continue to look at that. I think we are we are feeling good. We had we talked about this. We put a team in place, call it operational excellence and support, which allows us to probably be more aggressive on some of these investments and get them in the ground faster and get the production from them. So we are feeling real good about what the team's doing in that regard. Alright. Perfect. Luck with the rest of Q2. Thanks. Alright. Thank you.
Operator: The next question comes from Timna Tanners with Wells Fargo. Please go ahead.
Timna Tanners: Hey. Good morning. I wanted to ask about the metal coating sales progress, so double digits for the last 4 quarters. And that is coincided with a really strong move, of course, upward in zinc at the same time. Can you just remind us how to think about what a flatter zinc outlook could mean for the sales growth in that segment?
Thomas E. Ferguson: Well, couple of things. 1, we do not unlike with pain on the Precoat side, we do not tie the pricing directly to generally, we do not tie the pricing directly to zinc. But with zinc where it is at now and where it is even if it does not continue to trend up, we would still move forward with the surcharges because of the level it is at. So unless it took a significant dip down, you are going to see the surcharge impact flowing through in sales. So I think that is 1 piece. In terms of the other typically the zinc we are buying today is going to flow through our kettles in 6 to 8 months out. So we are very confident that we understand what the cost is going to be going through those kettles. Also makes us confident in what we are going to be doing with the surcharges. We did do some general pricing, but Timna, as you probably remember, we priced individually at all 42 sites. Pretty much every day. So they are reacting to the market Obviously, we have some margin targets and pricing guidelines in place. And then when we put through a blanket or when we put through surcharges, those are mandated from the top. But in reaction to what is going on, in the local market. So we feel real good about sustainability of the actions we have taken and how that is going to flow through into continued sales and revenue. Okay. that is helpful. Thank you.
Timna Tanners: Can you elaborate on the comments you were making about some of the struggles to obtain substrate? What do you mean by that? I mean, I know there is higher tariffs on imported material, but and then you mentioned that there may be more coming in going forward. I think that is function of the higher prices maybe starting to attract supply. But can you elaborate on what that means for your business to understand that dynamic better, please?
Thomas E. Ferguson: Yeah. For our you know, because most of our customers are their choice is either buy from a mill or a mill who paints or buy their substrate from a mill or distributor. And then have us paint it. So the imports used to be, heavily when our customers were buying imports, imported substrate, that was a high percentage chance that we are obviously going to be 1 of the ones that paints it. Versus domestic, it is it is a little less so. So the availability for our customers is costing them more for the substrate as it is priced today, either because of the tariffs and what domestic mills are pricing it at which to your last point is now making some of the imports potentially more attractive because it is at a price point that makes sense even including the tariffs. So that is just been a thing that we have run into where our customers are managing their inventories a little tighter, they are their ability and Jason can probably add something to this. Since he is he is close to it. So there just created some disruptions in ability to plan, ability to know for sure that you have got the substrate available for your demand and how you are making those decisions.
Jason Crawford: I mean, to be fair, Tom, I would not add much more on top of that. Just the supply constraints that our customers are seeing is having an impact in the decisions that we are working very closely with them. To get through those disruptions as the supply starts to ease itself up a little bit and hopefully some imports come into that equation. Then it gives our customers more options that a lot more of that business starts to flow through Precoat versus other alternatives. So it is been a challenging environment over the last 18, 24 months, and we see the horizon that is starting to ease itself up a little bit.
Timna Tanners: Okay. That makes sense. Thanks for the detail. Sure. Thank you.
Operator: The next question comes from Mark Reichman with Noble Capital Markets. Please go ahead.
Mark La Reichman: Thank you. With respect to the Washington, Missouri facility, you had mentioned that it is approaching its target run rate. If we could just step back a minute. Could you just remind us the full capacity. You have got roughly, I think, 75% of the capacity that is under contract. So what are your production targets? And where is the facility operating now? And how long will it take to get to your production target?
Jason Crawford: Yes. Good question, Mark. We spoke about the facility and the $50 million to $60 million sales range about 75% capacity. As you look at our Q1 performance, then we are starting to approach that on a run rate basis. So, you know, plus or minus $15 million. Certainly, we are not at $15 million, but we are starting to approach that as you look at our progress through the quarter. As we start to enter the second half of the year, then we should be starting to hit those targets from aligning with our contracted customer. And then equally as we come through the quarters, come through the year, our margin profile, our operating performance starts to get up to kind of full run rate to the point that once we get to the end of the year, via our contracted customer, we should be at those full run rate metrics and performance. And, you know, then it really starts to provide a meaningful impact to our financial performance On top of that, the other 25% as we start to really get into the swing with our partner customer. It allows us the opportunity to start to think about that next 25%. So it is starting to become a part of our thought process and our, discussions out there in the market, but, you know, that is still further out there into the second half of the year.
Mark La Reichman: Is it more helpful to talk about it in terms of the revenue versus say like the tonnage or the output? Yeah. I mean the tonnage, you know, we certainly convert to tons. We have always spoken about revenue. We do not really speak a lot about tons. The challenge with this facility is it is 100% aluminum and you start to talk about tons and they really get, you know, add another layer of confusion in comparison to the vast majority of our world is steel. Okay. Well, that was very helpful. Just the second question. And I did appreciate the disaggregated sales section in the 10-Q. And I was hoping that, David, he provided a lot of color on this call. If you can just maybe dive a little deeper in terms of the construction and the industrial, what really kind of drove that growth? Was it data centers? You know? And how durable do you see that? And then are there any puts and takes for the remainder of the year in any of the other categories I guess we would expect to see container continue to grow with Washington, Missouri But what about some of the other categories?
David Nark: Yes, sure, Mark. I will jump in on that 1. Couple of things. Certainly 1 of the and in fact the highest growth area in our construction segment was data center. So certainly outpaced the rest of the group, but double digit growth there as well as in general construction as well. So I think we feel pretty good about you know, what we are seeing overall, as Tom had mentioned. With, you know, the customers and the backlog for the back of the year. But certainly, data centers led that segment. Or that end market rather. Okay. Well, thank you very much. Sure.
Operator: Thanks, The next question comes from John Franzreb with Sidoti and Company. Please go ahead.
John Franzreb: Good morning, guys, and congratulations on another good quarter. I might have missed this but when you raised your revenue guidance, it seems to me like it was entirely in metal coatings. I did not hear any underlying meaningful improvements in Precoat. Am I reading this properly? And is that explain a lot of the EBITDA improvements I am just curious about how you deconstruct the revenue guidance by segment.
Jason Crawford: I mean, I can certainly add to that. You know, when you think about both segments and where we put our guidance out at the start of the year, coming out of the winter season coming into our construction season And equally, as Thomas commented, as you think about our Washington facility, all of those have contributed to us providing an update to our guidance and an improvement in our guidance. So you know, I would not necessarily say it is only centered in the metal coating segment. Especially when you bring the new Washington facility. And so, it is more across the board as you look at it. And certainly, that is what we are seeing as we, you know, we look at it more from a market point of view as opposed to the 2 businesses.
John Franzreb: And I am just curious with the with the new facilities, the greenfield facilities, were they included in the revenue guidance the original revenue guidance No. No. No. We did not. No. Okay. No. Got it. that is helpful. Thank you very much. I will get back in the queue. Yeah. Thanks. Bye.
Operator: The next question comes from Eric Voise with Evercore. Please go ahead.
Eric Voise: 65 kV higher voltage transmission is kind of an interesting storyline in T and D. Just wondering with your kettle size and footprint, how do you see that flowing through to AZZ? Is that incrementally meaningful? And then do we maybe see that in calendar 2027? Or is that something further out? Thanks.
David Nark: Yeah. You know, we do think that is going to be meaningful to us. You know AZZ operates the largest kettles in the nation. So certain locations like we mentioned Crowley, Texas, Arizona, areas where we have got some of the largest kettles in our fleet are ideally positioned for some of the larger KV projects. And most of those towers too are ones that have multiple sections to them. So when you think about the way they are constructed and then galvanized, they fit pretty well into our kettle. So we do think that as that segment of the market continues to grow, we are going to be really positioned well to take advantage of it.
Eric Voise: Okay. Thanks. And for my second can you just speak to how the large project mix in Metal Coatings and T and D, data center, solar, etcetera may impact EBITDA margin structurally there? Thanks.
Thomas E. Ferguson: Yes. I think the team has done a great job of as I mentioned, some of the surcharges and things like that they are doing going forward. So to protect margins and offset the material inflation and things like that. So, we even though large projects are more competitive, we still have a really good mix of business overall. And I do not know that the mix is well, I do know that the mix as we look forward, we do not anticipate it to be a whole lot different than what it is been the last couple of quarters. So we feel good about that margin profile and the team being able to drive the their scale and their leverage and do what they need to do on surcharges and things like that to offset the material inflation. To be able to protect those margins. The 30% range. Appreciate that. Sure.
Operator: This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.
Thomas E. Ferguson: Yes. Thank you for joining us today. And I do not think it came up on the call, but at least I do not recall any questions about it. But we obviously, Jason had mentioned, we do have an approved share buyback facility that if the stock continues to trade in the range it has for the last week or so, then we would anticipate being in the market to buy some shares back. Good point in time for us. Other than that, I think we have, pretty much answered what we hope you all wanted to know. Look forward to finishing up a good Q2 and having another conversation here in a couple of months. Thank you very much.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.