AZZ Inc. (AZZ) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to the UBS Global Industrial and Transportation Conference. My name is Michael Zahka, and I'm a member of the UBS Industrial Technology Banking team, and I'll be moderating the session today. I have the pleasure of welcoming the team from AZZ, a global provider of metal coating and related solutions. AZZ is a publicly traded company, is listed on the New York Stock Exchange under the ticker AZZ. I'm joined by the CEO, Tom Ferguson; and Interim CEO (sic) [ Interim CFO ], Philip Schlom. And as a reminder, you have the opportunity to submit questions, and we'll get to Q&A at the end of the session. So with that, I'll turn it over to Tom to kick things off.

All right. Thanks for joining us today. I'm going to turn it over to David Nark, who's our Chief Marketing Officer and also responsible for Investor Relations. So David?

All right. Thanks, Tom. Thanks, Michael. Good afternoon, everyone. Appreciate your time and interest today on AZZ. Before we begin going through the deck, what I'd like to do is just refer you to Page 2 of our slide presentation, which can be found not only through the UBS site but also on azz.com, particularly Page 2, our safe harbor statement. Please make yourself familiar with that as we go through the rest of the presentation. With that, what I'd like to do is bring your attention to Slide 3, just provide you a quick overview of AZZ, if you're not familiar with us. We are a global provider of both hot-dip galvanizing as well as other metal coating services, welding solutions, especially electrical equipment and highly engineered services to several key markets, including power gen, the transmission and distribution market, refining and industrial markets. What really makes us an interesting investment choice is several key factors. I'm not going to go through all these on Slide 3, but a few that I want to just bring to your point. One is our -- within our solid operating history, we've had 33 consecutive years of profitability. We're quite pleased with our performance there and also our significant and strong cash generation. We continue to be a very solid cash-generating business with great margins, as you'll see as we go through the deck, and a very, very solid balance sheet. Additionally, our market, one of them, in particular, our hot-dip galvanizing market is one that faces significant barriers to entry. AZZ, if you're again not familiar with us, is the largest hot-dip galvanizer in North America. We operate 41 galvanizing plants and then 7 additional surface technology or metal coatings plants. And that customer base is quite broad. We've got over 4,000 customers on that side of our business. And we also operate a system called Digital Galvanizing System or something we often refer to as DGS, which provides us a tremendous amount of operating visibility and consistency on how we deliver our product. As you look through the deck, what you're going to see today is a great year last year. We finished up our fiscal year in February of 2020 with record performance of $1.1 billion. That was up double digits, 14.5%, as well as net income and adjusted EBITDA also up double digits. And despite that, given the backdrop of the COVID environment, we're still trading at a relative discount to our peer group, which, again, provides a very attractive entry point for those of you that are listening in on the call today. What I'm going to do now is turn it over to Philip. Philip again is our Interim Chief Financial Officer here at AZZ and he's going to give you a little bit of backdrop, as I mentioned, on COVID-19 on Slide 4.

Thank you, David. I'd like to start off just reminding everybody, our fiscal year ends February, so February 29 of '20 was our most recent fiscal year-end. COVID really kicked up in March. And so we finished our year-end, completed our audit in March and April for our year-end, and it did have impact on our business, which we'll speak to a little bit more as we move through the presentation. We did discontinue our previously issued guidance. Our Galvanizing business continues to be a strong business. We are -- have not had to close any operations as a result of the COVID epidemic -- or pandemic. When you look at our balance sheet, we finished the year with $36.7 million in cash. We had free cash flow of $144.8 million. Our debt balance of $203 million consists of $125 million in high-yield debt and revolver. And our annual adjusted EBITDA was $157 million as of the end of the year. Our available revolving debt capacity is $357.1 million at the end of FY '20. We have a $450 million revolver with an $150 million accordion feature, which provides us ample room for borrowing. In operational impacts, as I spoke about a minute ago all of our plants are open and operating. We have business around the rest of the world in Poland and Brazil. And those operations continue to be open. We did have some travel restrictions and had to make some adjustments to be able to get people out of certain countries, who were working on refinery grounds. If you look at our mitigation efforts to this point, we're continuing to be smart with capital. We've frozen executive compensation. We reduced our capacity to align with the demands through furloughs, the government programs and certain risks in certain areas. And then we've hired -- we've put in place hiring restrictions. When you look at our capital allocation, we've halted, for the time being, share repurchases. We announced our dividend at the end of the year, and we paid that dividend. We are continuing to make strategic investments in capital. We've held that off a little bit as far as pushing it further out into the year and making the capital decisions we needed to run safe and support our operational needs. And then our leadership with Tom Ferguson who has been actively involved with our national leadership and understanding the pandemic and responding to that. So David, with that, I'll go ahead and switch to Page 5 and just give a high-level overview of our FY '20 revenues. Our businesses, we have revenues of $1.06 billion for the year ended February. Our Metal Coatings segment was $499 million, which was 13.3% higher than our FY 2019, and our Energy segment at $562.8 million was 15.6% higher in revenues than the prior year. And as Dave spoke about early on, we've continued to have strong hot-dip galvanizing demand in construction and other areas that we participate in. We've had growing revenue contribution from Surface Technologies and the acquisitions we've made over the past 2 years. And then we've been able to leverage and continue to hold price as zinc prices have come down in the marketplace, which has really helped us in the Metal Coatings business. On the Energy segment, we had strong North American turnaround seasons last year. We had a robust e-house market within the transmission and distribution markets, industrial and power. And then nuclear markets have remained to be in secular decline, and we made some adjustments there that I'll speak to in a few minutes. With that, I'll turn it back over to David.

Thanks, Philip. So going forward, on Page 6, what you'll see here is a look at the strategic direction of AZZ and where we're heading. And we've really broken it down into 2 areas for you. First is the long-term strategy on the Metal Coatings side, which is to grow both organically and through acquisitions, while targeting 21% to 23% operating margins. We're really going to do that in 2 ways. One is to continue to focus on our operational excellence and providing outstanding customer service, and that really goes beyond just lift service. What you see in our business is, again, the Digital Galvanizing System really helping us drive operational excellence throughout our platform. And then on the customer service side, we have tools in place like net promoter score, where we're surveying customers on every project on every job and seeing really exceptional net promoter scores across our business. And in the very rare instance that we don't, those situations are quickly addressed and corrected. And of course, that program on the Metal Coatings side is both a strategy that grows through both inorganic as well as organic growth in Surface Technologies and Galvanizing. And we'll speak a little bit more to that in some upcoming slides. On the Energy side, what we're going to do is focus on operational excellence and profitable growth in our core businesses while taking a hard look in divesting or exiting our noncore businesses. And as Philip mentioned previously, one of the things that we have already accomplished in that regard was the divestiture of our Nuclear Logistics business, which occurred in Q4 of our previous fiscal year. That business was a business that was in the nuclear space. It's just a secular decline. And again, not core to our strategy going forward. Other things that we'll work on, especially weldings and grow through international expansion. We've seen a good bit of our business on the specialty welding side in international countries. We've got a facility in Poland, where we're doing some shop expansion. We have projects and a facility in Brazil as well. And we really like what our international team is delivering on those fronts. The Electrical business, we'll be focused on improved productivity and profitability as well as focusing more on domestic growth and less focus on large China orders that we've had in our backlog. Moving forward on to Slide 7. What I'd like to do now is give you a little bit more color on our business. And again, for those that are not familiar with us, and as Philip said, our Metal Coatings side of the business last year, fiscal year 2020 is about $499 million. Our Energy segment on the right side of your screen, last year, $562 million. And typically, as we talk about the business and go through the slide deck, what you're going to hear us referring to are Galvanizing and Surface Technologies, which are again part of the Metal Coatings business. And those particular businesses are serving multiple different markets within infrastructure, providing hot-dip galvanizing, powder coating, plating and anodizing to the North American market. When you look at that Energy segment, you'll hear us often refer to the electrical systems group. That group or platform consists of solutions that are sold into the industrial market, the T&D market, power and electric utility market, and our solutions that we're offering are things everywhere from e-houses and switchgear to medium-voltage bus duct, lighting and tubular products. And then finally, our Industrial Welding Solutions group, again, also part of our Energy segment, serves the refinery and power generation markets, providing specialty welding and maintenance repair services, again, globally. As I move forward into Slide 8, if you were to visit one of our AZZ facilities, particularly a hot-dip galvanizing facility, this is what you would see. You typically see in the middle of the screen here, a kettle, as we often refer to it. And within that kettle, you've got molten zinc. And you have kettle operators standing around this kettle and some I-beams that are being dipped into that molten zinc. Basically, that's the process for hot-dip galvanizing. You slowly dip the steel in the kettle, you let it stay in the kettle for a certain period of time, then you bring it back out, and then your hot-dip galvanizing piece of equipment is cleaned, deburred and then provided back to the customer. And again, this is the type of activity that we're doing through 41 different plants all throughout North America including the United States and Canada. Moving forward into Slide 9. What makes us really compelling, particularly on the Metal Coatings side, again, is that market-leading market position that we have in North America with those 41 plants, as I mentioned earlier, that does make us North America's largest galvanizer. It allows us to differentiate on service and quality. And that when kettles typically go down for maintenance, we can shift volume from one location to another where, as competitors of ours that may have significantly less kettles or maybe just operating 1 or 2, will have an outage. As you can see on the slide, what we're doing is part of the strategy here, as I talked about and providing you again a little more color into that, when we talk about expanding in North America, we're really looking at growing the share of wallet by moving into adjacent products like powder coating, plating, anodizing and spinning technologies. You've seen that unfold, if you've been a current holder of our stock or you follow us closely in that we've announced in the past few years, several acquisitions both on the hot-dip galvanizing side, but also in our Surface Technology side. We've introduced new products. A few years ago, we built the first continuous galvanized rebar plant. That's in Catoosa, Oklahoma. That opened up in our fiscal year of 2018 and is a new product introduction for us. And as I mentioned earlier, the other thing that we're doing is investing and growing the spinning technology as well. And then, of course, our story on the Metal Coatings side would not be complete again without talking about inorganic growth. We continue to be acquisitive. We continue to look at hot-dip galvanizing and surface technologies opportunities, particularly in the North America, and we do have several opportunities in the pipeline, although things have slowed a little bit due to the COVID-19 pandemic because we just can't get folks out to complete some of the activity that they normally do, and Zoom calls are generally not the best way to do an acquisition. So we look to see that activity pick up here as we get throughout the fiscal year. Moving on to Slide 10. Real quickly, just to give you an idea of our Energy segment. As I mentioned earlier, we are a manufacturer of specialty electrical equipment. We focus on the safe and reliable transmission of power from sources of generation all the way to the end customer. And we also do a lot of specialty welding, particularly in refineries, that ensures the safety and reliability of refineries and critical infrastructure in several markets worldwide. To briefly give you a little bit more color on that on Slide 11. What I've provided for you here today is a really deep dive into the components of the electrical part of our business. And again, starting with the enclosure systems group or e-houses, as we like to refer to them, we're a manufacturer of custom modular electrical buildings. Those are used for a variety of applications in T&D, industrial, data center and energy storage markets. Our next group is a switchgear business. We make 38 kV switchgear predominantly for utility, T&D and industrial markets. We got a couple of bus businesses, a high-voltage bus and a medium-voltage bus business. Our high-voltage bus business is a global leader in SF6 gas insulated bus product. And if you, again, have been following us, you've seen that we've had a lot of big orders in our backlog in China that we've continued to build and ship, and we'll continue to wrap those projects up through the balance of this year. And our medium-voltage bus products, again, focused on isolated phase duct, segregated phase and nonseg phase out of our plant down in Jackson, Mississippi. Kind of rounding out the portfolio is hazardous duty lighting and tubular products. The lighting business is located down in Houston, provides hazardous duty lighting for the past 75 years to several key markets, including oil and gas, food processing and industrial, while our tubular products business manufactures pup-joints and API tubular products down in Crowley, Texas. Jumping forward to Slide 12. I'd like to now just give you a brief introduction to our Industrial Solutions Group, again, part of our Energy platform. This group is a worldwide leader in developing and delivering specialized maintenance solutions through automated welding, weld cladding and weld overlay technologies that extend the lifetime and maximize the value of assets throughout the energy industry. And what I provided for you here are 6 different areas that they provide their expertise. It ranges everything from coke drum repairs to waterwall services, heater and furnace services, boiler services, pressure vessel services, pipe and piping services. And what we really like about this business, in particular, is the technology that we bring to bear in those particular end markets. Unlike most traditional welding that you might be imagining in your mind, what we do is very specialized, high alloy, heavy wall-type welding with the use of robotics and automation. That gives us a big differentiator based upon quality and also allows us to get in, maintain the critical path during a refining turnaround season and get out on time, which saves the organization quite a bit of time and money. With that, I'm going to turn it over to Philip to round out the presentation and the financial overview.

Thank you, David. I'm going to take you through the consolidated summary quickly, then I'll move into the segments and provide an overview of each of those. For the full year, as I said earlier, our revenues were $1.06 billion compared with $927 million at the end of fiscal year 2019, an increase of about 14.5%. Some of that came through organic growth, some came from contribution from our acquisitions, which I'll speak to as I speak -- as I talk about it in the segments and then some of it was in through price realization. When you look at our net income, we were down $3 million or 5.8% on an as-reported basis. However, we were 39.1% above the prior year on adjusted basis. And as David spoke about earlier, we sold our Nuclear Logistics business and took an $18.6 million write down. At the same time, we evaluated the declining U.S. nuclear business, and we wrote off customer relationships and other intangibles within our WSI or industrial business of $9.2 million and offsetting that were some tax benefits of $4.8 million that provides the change of $23.1 million between the as-reported and as adjusted. On an EPS basis, we were down 6.1% on a reported basis, and we were up 38.3% as adjusted for the same reasons. And with that, I'll move to Slide #15. On Slide #15, I want to spend a moment on our Metal Coatings business. And again, our Metal Coatings business is our Galvanizing business as well as our Surface Technologies. And off to the left of the chart, you can see some of the key statistics. Our revenues of $440 million in 2019 were -- I'm sorry, our revenues in 2020 were $499 million compared with $440 million at the end of 2019 or a 13.3% increase in revenues. 25.5% (sic) [ $25.5 million ] of that came through organic growth and $33.2 million came through acquisitions. Our operating income was 29.1% higher in FY '20 at $107.9 million compared with $83.6 million in the previous year, and our operating margin was up 260 basis points during the year. In summary, record revenues were driven by improved demand in several of our end-use markets, especially construction, transmission and distribution, and solar. And we continue to see market expansion in our Surface Technologies area based on the acquisitions that we made over the past couple of years. In addition, the company benefited from lower zinc cost in our Galvanizing. That was partially offset earlier in the year before COVID by higher wage expenses within our plants. We saw higher labor productivity and operational efficiency as David spoke about a little bit ago in regards to our Digital Galvanizing System, which is interesting because with COVID, we're able to take a truck into our facility, bring the orders in without having to have someone leave the facility or their truck, and we're able to process that information and digitally transmit data back and forth. Our operating margins were 21.6% for FY '20 compared with 19% in the prior year in the Metal Coatings business. If you move to Slide 16, I'll take you through our Energy business. And again, our Energy business is constructed of our electrical platform as well as our industrial platform. Revenues of $562.8 million were 15.6% higher than the $486.8 million in the prior year. Operating income was up 4.8% as reported and up 34.1% on the as-adjusted basis. All of the adjustments we spoke about earlier were within our industrial platform. On an operating margin basis, we were 60 basis points lower in FY '20 as reported, but we were 110 basis points to 7.5% on an as-adjusted basis. We had a strong year in the refinery business within our industrial platform in FY '20. And we recognized revenue and shipped our Chinese order. And if you look at our backlog, you see our backlog dropping, and that's primarily a result of the large China orders we took in prior years, working through our system. Our adjusted operating margin of 7.5% in FY '20 was higher than our $6.4 million (sic) [ 6.4% ] in the prior year. And then as I said, we took a $9.2 million impairment of nuclear assets within our industrial platform. If you move to Slide #17, and you look at our adjusted revenue, we were $1.061 billion. Earnings per share on an as-adjusted basis was $2.71 compared with the as-reported of $1.84. For FY '21, we've discontinued guidance at this time with all the uncertainties that exist in the marketplace. We've hold up -- we're holding up earnings at this point in time until we have better visibility as to where the year is going to shake out. Some of our key drivers, Metal Coatings, really its continued operational excellence and utilizing our Digital Galvanizing Systems. We were able to hold price in an environment where zinc cost came down during the year. Within our Energy business, we executed large refining projects, especially a large project in Canada during fiscal year '20. We continue to improve and operate -- or standardize our electrical platform. And like I said earlier, we divested NLI at the end of the year. I won't go through the adjustments as I went through those previously. If you move to Slide #18, you can look at the full year consolidated results. I'm not going to go through all of the numbers here. What I do, I will tell you here is that we finished the year with an EPS of $2.71 on an adjusted basis compared with our reported numbers of $1.84. If you move to Slide #19, I'd like to spend a little bit of time on our cash flow. Our cash flow from operations were $144 million compared with $111 million in 2019. We invested $35 million in capital expenditures during the year, and I'll speak to that as I get to the capital section. And our free cash flow was $109.8 million compared with $85.9 million for the year. In our cash flows, we had $60.6 million of acquisitions compared with $8 million in the prior year. We continued to pay dividends during the year, $17.8 million. And then during the year, unlike FY 2019, we initiated share repurchases of $5.8 million. And at this point of time, we halted those share repurchases as we focus on liquidity. If I move to Slide #20 and look a little bit at our capital -- sorry, if I look at our capital allocation, I'll just kind of run through the slide. If you look at the capital expenditures, we spent $35 million during the year. That was on new business and product lines. We had growth, as David spoke about earlier, in our spin plant. We're putting a spin plant in Houston to complement 2 other spin plants we have throughout the United States. We always invest in safety and health. And then we continue to invest in systems and technology. The other large investment that we're making and continue into 2021 fiscal year is building -- is expanding a plant in Poland for our operations in the industrial segment. On the acquisitions front, we had $60.6 million of acquisitions. We're really looking at businesses that are accretive within the first year, and we remain focused on the North American market. When you look at share repurchases, I spoke about that, those -- we made $5.8 million of share repurchases in the fourth quarter. And right now, we've suspended that program temporarily. We recently paid out a dividend and paid out dividends each of the quarters during fiscal year FY '20 at the amount of $17.8 million. If you move to Slide 22, going through some of our key indicators to kind of finalize the presentation. In the Galvanizing business, we're looking at how the fabrication activity remains stable throughout the rest of the year. We've seen through COVID, we've been open for business and our operations have performed well. Within Surface Technologies, we are looking at when are our customers reopening. We saw a turndown in activity as some of the businesses were nonessential, and we've seen those businesses come back to work over the last month. In our Energy segment, one of our -- we have about 150 personnel in Poland who travel throughout Western Europe. They had travel restrictions. We're starting to see that market open up. But until it opens up, we won't have full visibility to those uncertainties. And then within our industrial business, we look at our fall turnaround season. Within our industrial business, we were unable to put a lot of resources on customer grounds during the pandemic. We are seeing more orders as we look into the summer, and we're seeing inquiries into the fall. But until those firm up in June or July, we don't have a whole picture of that. When you look at our Electrical Products group, we're working off backlog that we have in that business. And we've seen lighter bookings as we've kind of gone through the last several months. So the question that we have is how will bookings activity flow through the summer months. And then in the Energy business, in the oil and gas market, which is in a big segment for us on the rig activity, but we watch the rigs to see are we going to see some stabilization within the oil and gas market. And then at corporate, we continue to tightly monitor cash flow and customer credit. We've continued to receive cash from our customers, we manage cash very diligently. As I said earlier, we have a strong balance sheet with a lot of room underneath our revolver so we are in a -- we believe we have a very strong balance sheet with a strong outlook towards the future. With that, I'd like to pass it back to David to talk about our mission.

All right. Thanks, Philip. So rounding out the presentation today, what I'd like to do is just share with you for a minute our mission and our values that we hold dear at AZZ. And as you can see on the slide, our mission is to create superior value in a culture where people can grow and traits matter. We're diverse, we're collaborative and we're service-minded, and we operate in a culture of trust, respect, accountability, integrity, teamwork and safety. Those words there are what makes up our traits. You can see our guiding values. We have those in 3 buckets. We're dedicated to our employees and the communities in which they live by hiring and training and equipping them, providing them with a safe environment to grow spiritually, personally and professionally. We also value our customers by reliably providing them high-quality products and services with outstanding customer service. And again, I mentioned that our net promoter scores is a way that we measure that throughout our entire organization. And then finally, we value you, our dedicated shareholders, by consistently providing you outstanding returns above our peer group and preferably above all other industrial indices. With that, I would like to turn it back over to Mike and see if there's any questions from anyone on the call.

That's great. Thank you. I guess the first question would relate to acquisitions, and you guys have had a nice pipeline of inorganic growth. I was hoping you could talk a little bit about how you view what would define your total addressable market. What are the kind of core competencies of the businesses that you're looking at? And just kind of how deep the pipeline is and how you've cultivated that pipeline? And what we should expect as far as kind of future M&A?

Yes. Generally speaking, if you look back at our history over the past several years, what you'll see is typically 2 to 3 deals getting accomplished per year. Sometimes, that's a little bit higher, but that's generally been our run rate. And as we do acquisitions, of course, we're looking for businesses that are going to be accretive in the first year of operation and that strategically fit within where we want to go. So most of the acquisitions, as a result, have been in the area on the Metal Coatings side of the business. Again, as I mentioned, we did a lot of acquisitions to build out the Surface Technologies part of the business over the past couple of years. We also added in 1 galvanizing location recently up in Chattanooga. And then as you look on the other side of the portfolio and you look at the Energy side of the portfolio, the last deal we did on that side was the Lectrus Corporation, which we acquired out of bankruptcy from the prior organization. So that fit really nicely into our portfolio. We really like the enclosures and our e-house market as well as switchgear, and that was a great acquisition for us that took our enclosure business from 2 locations to 3. So that's kind of where we've been spending our time.

You asked a little bit -- this is Philip. You asked a little bit about our strategy. And with the pandemic, we've taken a step back because we can't necessarily get in front of all the acquisition targets and discussions that we had ongoing. But we've got a portfolio of activity that's ongoing. And at the right time, we'll continue to reengage.

That's great. And the next question kind of about raw material cost. Can you kind of give us a sense for how raw material inputs flow through your P&L? What type of timing lag there is? And then the second part of the question would be on pricing. And how you guys kind of handle pricing and what you're seeing in the market as far as that type of behavior?

Yes. Let me start with our Metal Coatings business. So on the Metal Coatings business, our 2 largest cost components are labor and then zinc, and we use other chemicals in that market. So we go out into the market and forward purchase. The zinc that we need to run our business, we look out at our plant-by-plant needs and manage inventory. From that perspective, zinc costs have been averaging $0.85 to $0.90 over the last 3 to 4 months, and it's come down over the last year. So we've been able to benefit from the lower cost of inputs. And we, at this time, don't see that changing too significantly and may move itself back up a little bit. When you look into our industrial business on the 2 platforms. If you look at our industrial platform, they're primarily labor. So we're buying welding wire, but we're really performing services within our customers' operations. And then in our electrical side of the business, our inputs are steel and stainless steel and then paint and things we put into the e-houses and the switchgear electrical components. And lead times on that business, we may have some projects that are large and multiyear but generally speaking, lead times tend to be 4 to 6 months. So we're procuring in advance of those projects, we're in line with those projects.

That's great. And thinking about the Energy segment, it really strikes me that most of the applications are actually more of an infrastructure type application, I think, rather than an association with kind of upstream. And I was hoping you could kind of give us a sense for the breakdown across the energy value chain and if any, upstream exposure, what that is.

Yes, sure. As far as upstream, there's really not a lot of exposure in the business there. We -- although it's called Energy, we -- as you can see by the portfolio, there's a lot of industrial and diversified industrial-type solutions in the portfolio as well as electrical solutions. So upstream, there's not a lot of exposure. Our only real exposure areas are a very, very small percentage of our business that's 2% to 3%, and that's our tubular products business and to some degree, also our lighting business. But even the lighting business, we've diversified their customer base over time and have moved them into other adjacency markets, like industrial food processing. So not a lot of exposure there. Really where we tend to focus most heavily is in the refineries with the work that our Welding Solutions group does. And then you jump out of that space altogether, and then you're in T&D and utility markets.

That's great. And the last question for me relates to what you addressed on the first slide in the presentation, which is kind of the valuation gap versus kind of your competitive set. I think it would be helpful to just get your color on kind of what you think is driving that kind of disconnect and what you guys are doing to actively kind of close that gap and create value for shareholders.

I think on that -- this is Phil. I think on that front, some of what we're doing here is getting out from the marketplace and making sure customers understand our separate business is our Metal Coatings business and then the different lines of business within our Energy business. We have a very strong balance sheet, as we've spoken about. We've had accretive acquisitions. So we have a good story to tell. So we're doing -- trying to do a much better job of telling that story. If you look back out in the past 2 years, we had a restatement a couple of years ago. We had some delayed SEC filings. Those put a little bit of anchor behind us from the standpoint of it creates uncertainties, uncertainties create confusion. And so what we're trying to do is break down that confusion a little bit.

Yes. The other thing I would add, too, to Philip's comment is that we -- as we've mentioned in the deck and on the call today that we've discontinued the guidance for fiscal year '21. We really can't get out and say anything about that going forward because there's just so much uncertainty still for us in the forward look. We are actively looking at what the third quarter of our year is going to look like from a fall turnaround time and what materializes there. So we just -- there's a lot of pieces of the puzzle that still -- you have to sort of fill in. We're actively looking at those. But without that -- without knowing those definitively, it makes it a little difficult and I think it's pulling us down a little bit.

Yes. And this is Tom. I think in our last earnings call, we did signal that we probably wouldn't know how that fall is shaping up until late June or even late July. And so I think that -- we alluded to our uncertainty there as well as the fact that we needed to replace some backlogs on the electrical side. And then one of our largest competitors in the Metal Coatings space had said their business was going to be down 20% to 25%. And we had indicated we're probably down 5% to 10%. So I think those are all just elements that as we report our first quarter here in a month, hopefully, and then continue -- and at that point, we should be able to talk more about what we're seeing for that fall turnaround season. I'm hopeful that, that gives investors more certainty and more confidence of -- in terms of how this year is going to play out for us.

Great. Well, thank you. It looks like we run through our allotted time. So David, Philip, Tom, thank you for getting out here and telling your story and participating in the conference, and we hope to see you next year.

All right. Thank you.

Thanks, Mike. We appreciate it.

Thank you.

Thank you, everyone.