AZZ incorporated (NYSE:AZZ) Q1 2020 Earnings Conference Call - Final Transcript

Jul 08, 2019 • 11:00 am ET

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AZZ incorporated (NYSE:AZZ) Q1 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. (Operator Instructions) Today's first question will come from Joe Franzreb (ph) of Sidoti & Company. Please proceed.

Analyst
John Edward Franzreb

It's John. Good morning, Tom, Paul. How are you doing?

Executive
Thomas E. Ferguson

Hi, John.

Executive
Paul W. Fehlman

Good, John.

Analyst
John Edward Franzreb

Good start to the year. My first question is Tom you kind of characterize this spring as a normal turnaround season. What are your initial thoughts, how the fall turnaround season is shaping up relative to the spring?

Executive
Thomas E. Ferguson

Yes, Paul, this is stacking up to be stronger and -- so we're quoting a lot of stuff already were getting some engineering bookings we're seeing positive signs as we get closer to the fall season. And that's both domestic and international in that case.

Analyst
John Edward Franzreb

Okay. Great. But much of the beat in the quarter actually had come from the metal coating side of the business. So can we talk a little bit, I guess there's a couple of things here. One, K2 and the Tennessee acquisitions, how much in revenues they contribute to the quarter and it doesn't sound like they contributed anything to the op income line is that true?

Executive
Thomas E. Ferguson

Yes, they were relative -- you know they're a normal bolt-on acquisitions or relatively small revenue. We were just pleased that they did contribute. And they actually did contribute some operating to income, but given their size it's not really significant, we just want to call it out because the team has did such a great job getting them integrated quickly giving the support they needed. And -- just really for us, it just shows we're back on track with how we can get this done and how we bring them into the company. And they we're acquiring good teams and good business.

Analyst
John Edward Franzreb

Okay. I'm sure this isn't material, but I'm going to ask it anyway. Just how you characterize the two businesses in the queue, it sounds like K2 is more of a normal regional galvanizer. But Tennessee seems like it has a client basis throughout the country. Is there a particular reason for that difference they provide any kind of different services that make more of a country wide business?

Executive
Thomas E. Ferguson

Yes, you actually need to flip them the other way, John.

Analyst
John Edward Franzreb

Okay.

Executive
Thomas E. Ferguson

K2 Partners is a powder coater and powder coater in platter out of -- close by in North Texas. And then they've got a location over in Tampa. So they do because they do a lot of automated type powder coating. They do attract business from further away you normally see from galvanizing business. Tennessee galv is outside of China and Denmark Chattanooga, Tennessee and they drop from that southeast market in eastern Tennessee, and of course, we have a facility up in Nashville that picks up as you go further north.

Analyst
John Edward Franzreb

Okay. Fair enough. And one last question also in the queue there was mention of the Westinghouse settlement, I'm wondering that if they had revenue contribution in the energy side of the business in the quarter and