Cover Page
Cover Page - shares | 9 Months Ended | |
Nov. 30, 2023 | Dec. 29, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-12777 | |
Entity Registrant Name | AZZ Inc. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-0948250 | |
Entity Address, Address Line One | One Museum Place, Suite 500 | |
Entity Address, Address Line Two | 3100 West 7th Street | |
Entity Address, City or Town | Fort Worth, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76107 | |
City Area Code | 817 | |
Local Phone Number | 810-0095 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | AZZ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,076,871 | |
Entity Central Index Key | 0000008947 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --02-28 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Statement [Abstract] | ||||
Sales | $ 381,605 | $ 373,301 | $ 1,171,020 | $ 987,145 |
Costs and Expenses | ||||
Cost of sales | 293,456 | 300,219 | 888,606 | 752,455 |
Gross margin | 88,149 | 73,082 | 282,414 | 234,690 |
Selling, general and administrative | 35,325 | 27,689 | 103,087 | 97,247 |
Operating income from continuing operations | 52,824 | 45,393 | 179,327 | 137,443 |
Interest expense | 25,855 | 26,123 | 82,331 | 61,739 |
Equity in (earnings) loss of unconsolidated subsidiaries | (8,742) | (1,006) | (11,136) | (1,006) |
Other (income) expense, net | 41 | (610) | (9) | (582) |
Income from continuing operations before income taxes | 35,670 | 20,886 | 108,141 | 77,292 |
Income tax expense | 8,780 | 2,447 | 24,397 | 18,380 |
Net income from continuing operations | 26,890 | 18,439 | 83,744 | 58,912 |
Income from discontinued operations, net of tax | 0 | 1,665 | 0 | 17,126 |
Loss on disposal of discontinued operations, net of tax | 0 | (40,646) | 0 | (130,073) |
Net income (loss) from discontinued operations | 0 | (38,981) | 0 | (112,947) |
Net income (loss) | 26,890 | (20,542) | 83,744 | (54,035) |
Dividends on preferred stock | (3,600) | (3,600) | (10,800) | (4,640) |
Net income (loss) available to common shareholders | $ 23,290 | $ (24,142) | $ 72,944 | $ (58,675) |
Basic earnings (loss) per share | ||||
Earnings (loss) per common share from continuing operations (in dollars per share) | $ 0.93 | $ 0.60 | $ 2.91 | $ 2.19 |
Earnings (loss) per common share from discontinued operations (in dollars per share) | 0 | (1.57) | 0 | (4.55) |
Basic earnings per common share (usd per share) | 0.93 | (0.97) | 2.91 | (2.37) |
Diluted Earnings (Loss) Per Share [Abstract] | ||||
Diluted earnings per common share (usd per share) | 0.92 | (0.97) | 2.86 | (2.35) |
Earnings (loss) per common share from continuing operations (in dollars per share) | 0.92 | 0.59 | 2.86 | 2.17 |
Earnings (loss) per common share from discontinued operations (in dollars per share) | $ 0 | $ (1.56) | $ 0 | $ (4.52) |
Weighted average shares outstanding | ||||
Weighted average number common shares, basic (shares) | 25,077,000 | 24,867,000 | 25,024,000 | 24,804,000 |
Weighted average number common shares, diluted (shares) | 29,330,000 | 24,995,000 | 29,278,000 | 24,984,000 |
Cash dividends declared per common share (usd per share) | $ 0.17 | $ 0.17 | $ 0.51 | $ 0.51 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) available to common shareholders | $ 23,290 | $ (24,142) | $ 72,944 | $ (58,675) |
Other Comprehensive Income (Loss): | ||||
Unrealized translation gain (loss) | 3,029 | (5,019) | 1,293 | (7,765) |
Reclassification of foreign currency translation adjustment from accumulated other comprehensive loss to loss on sale of discontinued operations | 0 | 27,750 | 0 | 27,750 |
Unrealized gain (loss) on interest rate swap, net of tax | (115) | (3,512) | 1,867 | (3,512) |
Amounts reclassified from accumulated other comprehensive income to earnings, net of tax | (1,057) | 0 | (2,544) | 0 |
Other comprehensive income | 1,857 | 19,219 | 616 | 16,473 |
Comprehensive income (loss) | $ 25,147 | $ (4,923) | $ 73,560 | $ (42,202) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 30, 2023 | Nov. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) on interest rate swap, tax | $ (42) | $ 678 |
Amounts reclassified from accumulated other comprehensive income to earnings, tax | (384) | (924) |
Unrealized translation gain (loss) | 3,029 | 1,293 |
Reclassification of foreign currency translation adjustment from accumulated other comprehensive loss to loss on sale of discontinued operations | $ 0 | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 7,509 | $ 2,820 |
Accounts receivable, net of allowance for credit losses of $2,096 and $5,752 at February 28, 2023 and February 28, 2022, respectively | 142,463 | 156,443 |
Other receivables | 31,005 | 26,969 |
Inventories | 126,737 | 143,920 |
Contract assets | 75,719 | 79,273 |
Prepaid expenses and other | 9,295 | 7,991 |
Total current assets | 392,728 | 417,416 |
Property, plant and equipment, net | 525,338 | 498,503 |
Right-of-use assets | 22,830 | 26,392 |
Goodwill | 705,487 | 702,512 |
Deferred tax assets | 5,820 | 12,467 |
Intangibles and other assets, net | 451,289 | 469,392 |
Investment in joint venture | 97,200 | |
Other assets | 8,026 | 10,037 |
Total assets | 2,208,756 | 2,221,479 |
Current liabilities: | ||
Accounts payable | 95,158 | 84,256 |
Income tax payable | 45 | 272 |
Accrued salaries and wages | 25,868 | 26,262 |
Other accrued liabilities | 72,476 | 70,047 |
Lease liability, short-term | 6,453 | 6,403 |
Total current liabilities | 200,000 | 187,240 |
Long-term debt, net | 980,004 | 1,058,120 |
Lease liability, long-term | 17,112 | 20,704 |
Deferred tax liabilities | 33,370 | 40,536 |
Other long-term liabilities | 57,120 | 61,419 |
Total liabilities | 1,287,606 | 1,368,019 |
Commitments and contingencies (Note 19) | ||
Shareholders' Equity: | ||
Common Stock, $1 par value; 100,000 shares authorized; 25,077 and 24,912 shares issued and outstanding at November 30, 2023 and November 30, 2022, respectively | 25,077 | 24,912 |
Capital in excess of par value | 333,555 | 326,839 |
Retained earnings | 566,235 | 506,042 |
Accumulated other comprehensive loss | (3,957) | (4,573) |
Total shareholders’ equity | 921,150 | 853,460 |
Total liabilities and shareholders' equity | 2,208,756 | 2,221,479 |
AIS Joint Venture | ||
Current assets: | ||
Investment in joint venture | 97,238 | 84,760 |
Series A Preferred Stock | ||
Shareholders' Equity: | ||
Series A Convertible Preferred Stock, $1 par, shares authorized 240; 240 shares issued and outstanding at November 30, 2023 and 240000 shares issued and outstanding at November 30, 2022 | $ 240 | $ 240 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Accounts receivable, allowance for doubtful accounts | $ 2,096 | $ 5,752 |
Preferred stock, shares outstanding (in shares) | 240,000 | 240,000 |
Common stock, par value (usd per share) | $ 1 | $ 1 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (shares) | 25,077,000 | 24,912,000 |
Common stock, shares, outstanding (shares) | 25,077,000 | 24,912,000 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 240,000 | 240,000 |
Preferred stock, shares issued (in shares) | 240,000 | 240,000 |
Preferred stock, shares outstanding (in shares) | 240,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Cash Flows From Operating Activities: | ||
Net income (loss) available to common shareholders | $ 72,944 | $ (58,675) |
Net income (loss) from discontinued operations | 0 | 112,947 |
Dividends on preferred stock | 10,800 | 4,640 |
Net income from continuing operations | 83,744 | 58,912 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||
Bad debt expense (recovery) | 53 | (38) |
Depreciation and amortization | 59,034 | 55,813 |
Deferred income taxes | (274) | (20,421) |
Equity in earnings of unconsolidated entities | (11,136) | (1,006) |
Impairment of long-lived assets | 0 | 235 |
Net (gain) on sale of property, plant and equipment | (39) | (1,381) |
Amortization of debt financing costs | 9,105 | 5,916 |
Share-based compensation expense | 6,207 | 7,138 |
Changes in current assets and current liabilities | 38,819 | (34,969) |
Changes in other long-term assets and long-term liabilities | (4,585) | (1,577) |
Net cash provided by operating activities of continuing operations | 180,928 | 68,622 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (66,900) | (35,085) |
Acquisition of subsidiaries, net of cash acquired | 0 | (1,283,448) |
Proceeds from sale of subsidiaries, net | 0 | 106,766 |
Other investing activities | 47 | 4,114 |
Net cash used in investing activities of continuing operations | (66,853) | (1,207,653) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 1,465 | 1,767 |
Payments for taxes related to net share settlement of equity awards | (791) | (2,592) |
Proceeds from revolving loan | 189,000 | 255,000 |
Payments on revolving loan | (274,000) | (322,000) |
Proceeds from long term debt | 0 | 1,540,000 |
Payments of debt financing costs | (1,299) | (87,555) |
Payments on long term debt and finance leases | (268) | (366,500) |
Payments of dividends | (23,551) | (12,664) |
Net cash provided by (used in) financing activities of continuing operations | (109,444) | 1,005,456 |
Effect of exchange rate changes on cash | 58 | (2,199) |
Net cash provided by operating activities from discontinued operations | 0 | 7,973 |
Net cash used in investing activities from discontinued operations | 0 | (3,991) |
Net cash provided by financing activities from discontinued operations | 0 | 120,000 |
Net cash provided by discontinued operations | 0 | 123,982 |
Net increase (decrease) in cash and cash equivalents | 4,689 | (11,792) |
Cash and cash equivalents at beginning of period | 2,820 | 15,082 |
Cash and cash equivalents at end of period | $ 7,509 | $ 3,290 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock Series A Preferred Stock | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance, beginning balance (shares) at Feb. 28, 2022 | 24,688 | |||||
Balance, beginning balance at Feb. 28, 2022 | $ 667,365 | $ 24,688 | $ 85,847 | $ 584,154 | $ (27,324) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 7,118 | 7,118 | ||||
Issuance of Class A convertible preferred stock in exchange for convertible debt (in shares) | 240 | |||||
Issuance of Class A convertible preferred stock in exchange for convertible debt | 233,722 | $ 240 | 233,482 | |||
Common stock issued under stock-based plans and related income tax expense (shares) | 136 | |||||
Common stock issued under stock-based plans and related income tax expense | (2,592) | $ 136 | (2,728) | |||
Common stock issued under employee stock purchase plan (shares) | 52 | |||||
Common stock issued under employee stock purchase plan | 1,766 | $ 52 | 1,714 | |||
Dividends on preferred stock | (4,640) | (4,640) | ||||
Cash dividends paid on common shares | (12,664) | (12,664) | ||||
Net income (loss) available to common shareholders | (54,035) | (54,035) | ||||
Other comprehensive income | 16,473 | 16,473 | ||||
Balance, ending balance (shares) at Nov. 30, 2022 | 240 | 24,876 | ||||
Balance, ending balance at Nov. 30, 2022 | 852,513 | $ 240 | $ 24,876 | 325,433 | 512,815 | (10,851) |
Balance, beginning balance (shares) at Aug. 31, 2022 | 24,862 | |||||
Balance, beginning balance at Aug. 31, 2022 | 859,621 | $ 24,862 | 323,386 | 541,203 | (30,070) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 2,348 | 2,348 | ||||
Common stock issued under stock-based plans and related income tax expense (shares) | 14 | |||||
Common stock issued under stock-based plans and related income tax expense | (287) | $ 14 | (301) | |||
Dividends on preferred stock | (3,600) | (3,600) | ||||
Cash dividends paid on common shares | (4,246) | (4,246) | ||||
Net income (loss) available to common shareholders | (20,542) | (20,542) | ||||
Other comprehensive income | 19,219 | 19,219 | ||||
Balance, ending balance (shares) at Nov. 30, 2022 | 240 | 24,876 | ||||
Balance, ending balance at Nov. 30, 2022 | 852,513 | $ 240 | $ 24,876 | 325,433 | 512,815 | (10,851) |
Balance, beginning balance (shares) at Feb. 28, 2023 | 240 | 24,912 | ||||
Balance, beginning balance at Feb. 28, 2023 | 853,460 | $ 240 | $ 24,912 | 326,839 | 506,042 | (4,573) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 6,207 | 6,207 | ||||
Common stock issued under stock-based plans and related income tax expense (shares) | 123 | |||||
Common stock issued under stock-based plans and related income tax expense | (791) | $ 123 | (914) | |||
Common stock issued under employee stock purchase plan (shares) | 42 | |||||
Common stock issued under employee stock purchase plan | 1,465 | $ 42 | 1,423 | |||
Dividends on preferred stock | (10,800) | (10,800) | ||||
Cash dividends paid on common shares | (12,751) | (12,751) | ||||
Net income (loss) available to common shareholders | 83,744 | 83,744 | ||||
Other comprehensive income | 616 | 616 | ||||
Balance, ending balance (shares) at Nov. 30, 2023 | 240 | 25,077 | ||||
Balance, ending balance at Nov. 30, 2023 | 921,150 | $ 240 | $ 25,077 | 333,555 | 566,235 | (3,957) |
Balance, beginning balance (shares) at Aug. 31, 2023 | 240 | 25,077 | ||||
Balance, beginning balance at Aug. 31, 2023 | 898,077 | $ 240 | $ 25,077 | 331,366 | 547,208 | (5,814) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 2,189 | 2,189 | ||||
Dividends on preferred stock | (3,600) | (3,600) | ||||
Cash dividends paid on common shares | (4,263) | (4,263) | ||||
Net income (loss) available to common shareholders | 26,890 | 26,890 | ||||
Other comprehensive income | 1,857 | 1,857 | ||||
Balance, ending balance (shares) at Nov. 30, 2023 | 240 | 25,077 | ||||
Balance, ending balance at Nov. 30, 2023 | $ 921,150 | $ 240 | $ 25,077 | $ 333,555 | $ 566,235 | $ (3,957) |
The Company and Basis of Presen
The Company and Basis of Presentation | 9 Months Ended |
Nov. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | 1. The Company and Basis of Presentation AZZ Inc. ("AZZ", the "Company", "our" or "we") was established in 1956 and incorporated under the laws of the state of Texas. We are a provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets in North America. We have three distinct operating segments: the AZZ Metal Coatings segment, the AZZ Precoat Metals segment, and the AZZ Infrastructure Solutions segment. The Company's AZZ Metal Coatings segment is a leading provider of metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating to the North American steel fabrication and other industries. The AZZ Precoat Metals segment provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil, primarily serving the construction; appliance; heating, ventilation, and air conditioning (HVAC); container; transportation and other end markets in North America. The AZZ Infrastructure Solutions segment consists of the Company's 40% interest in AIS Investment Holdings LLC (the "AVAIL JV"). AIS Investment Holdings LLC is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in markets worldwide. AIS Investment Holdings LLC was wholly-owned by the Company until September 30, 2022, when AZZ contributed its' AZZ Infrastructure Solutions segment, excluding AZZ Crowley Tubing and excluding certain receivables retained by AZZ ("AIS"), to the AVAIL JV and sold a 60% interest in the AVAIL JV to Fernweh Group LLC ("Fernweh"). For the three and nine months ended November 30, 2022, financial data for the AZZ Infrastructure Solutions segment is segregated and reported as discontinued operations. Presentation The accompanying condensed consolidated balance sheet as of February 28, 2023 was derived from audited financial statements. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 28, 2023, included in the Company’s Annual Report on Form 10-K covering such period. Certain previously reported amounts have been reclassified to conform to current period presentation. See Note 3 for more information about results of operations reported in discontinued operations in the consolidated statement of operations and statement of cash flows for the three and nine months ended November 30, 2022. The Company's fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ending February 29, 2024 is referred to as fiscal 2024. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial position of the Company as of November 30, 2023, the results of its operations for the three and nine months ended November 30, 2023 and 2022, and cash flows for the nine months ended November 30, 2023 and 2022. The interim results reported herein are not necessarily indicative of results for a full year. Significant Accounting Policies Other receivables Other receivables includes income taxes receivable, receivables for supplier rebates, and other miscellaneous receivables. Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are currently assessing the impact of this update on our consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are currently assessing the impact of this update on our consolidated financial statement disclosures. |
Acquisitions
Acquisitions | 9 Months Ended |
Nov. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 2. Acquisitions Precoat Acquisition On May 13, 2022, the Company acquired Precoat Metals for a purchase price of approximately $1.3 billion (the "Precoat Acquisition"). AZZ Precoat Metals is the leading independent provider of metal coil coating solutions in North America. The acquisition represented a continued transition of the Company to a focused provider of coating and galvanizing services for critical applications. The Company completed the final purchase accounting valuation during the first quarter of fiscal year 2024. The Company accounted for the Precoat Acquisition as a business combination under the acquisition method of accounting. Goodwill from the acquisition of $527.8 million represents the excess purchase price over the estimated value of net tangible and intangible assets and liabilities assumed, and is expected to be deductible for income tax purposes. The Company's chief operating decision maker assesses performance and allocates resources to Precoat separately from the AZZ Metal Coatings segment; therefore, Precoat is accounted for as a separate segment, the AZZ Precoat Metals segment. See Note 8 for more information about the Company's operating segments. Goodwill from the acquisition was allocated to the AZZ Precoat Metals segment. Assets acquired and liabilities assumed in the Precoat Acquisition were recorded at their estimated fair values as of the acquisition date. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. The Company engaged third-party valuation experts to assist in determination of fair value of property and equipment, intangible assets, pension benefit obligation and certain other assets and liabilities. Management believes that the current information provides a reasonable basis for the fair values of assets acquired and liabilities assumed. During the first quarter of fiscal 2024, the Company made purchase price allocation adjustments that impacted goodwill, contract assets and accrued expenses. The following table represents the summary of the assets acquired and liabilities assumed, in aggregate, related to the Precoat Acquisition, as of the date of the acquisition (in thousands): May 13, 2022 Assets Accounts receivable, net $ 77,422 Inventories 43,369 Contract assets 68,314 Prepaid expenses and other 2,247 Property, plant and equipment 305,503 Right-of-use assets 13,753 Goodwill 527,793 Deferred tax asset 8,660 Intangible assets, net 446,000 Other assets 546 Total fair value of assets acquired $ 1,493,607 Liabilities Accounts payable $ (99,223) Accrued expenses (31,761) Other accrued liabilities (5,330) Lease liability, short-term (2,440) Lease liability, long-term (11,313) Other long-term liabilities (60,091) Total fair value of liabilities assumed $ (210,158) Total purchase price, net of cash acquired $ 1,283,449 Intangible assets include customer relationships, tradenames and technology. Other long-term liabilities include the pension obligation and certain environmental liabilities assumed as part of the Precoat Acquisition. See Notes 16 and 17 for more information about these long-term liabilities. Unaudited Pro Forma Information The following unaudited pro forma financial information for the three and nine months ended November 30, 2022 combines the historical results of the Company and the acquisition of Precoat Metals, assuming that the companies were combined as of March 1, 2022. The pro forma financial information includes business combination accounting effects from the Precoat Acquisition, including amortization expense from acquired intangible assets, depreciation expense from acquired property, plant and equipment, interest expense from financing transactions which occurred to fund the Precoat Acquisition, acquisition-related transaction costs and tax-related effects. The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition of Precoat Metals had taken place on March 1, 2022 or of future operating performance. Three Months Ended November 30, Nine Months Ended November 30, 2022 2022 Revenue $ 373,301 $ 1,180,165 Net income from continuing operations (1) $ 18,439 $ 43,442 (1) Net income for the nine months ended November 30, 2022 includes acquisition costs of approximately $45.0 million, of which $11.5 million was incurred by AZZ and $33.5 million was incurred by Precoat Metals prior to the acquisition. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Nov. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 3. Discontinued Operations On September 30, 2022, AZZ contributed its AZZ Infrastructure Solutions ("AIS") segment, excluding AZZ Crowley Tubing, to a joint venture, AIS Investment Holdings LLC (the "AVAIL JV") and sold a 60% interest in the AVAIL JV to Fernweh Group LLC ("Fernweh"). On September 30, 2022, the AVAIL JV was deconsolidated. Beginning October 1, 2022, the Company began accounting for its 40% interest in the AVAIL JV under the equity method of accounting. The AVAIL JV is included in the AZZ Infrastructure Solutions segment. The divestiture of the AZZ Infrastructure Solutions segment represents an intentional strategic shift in our operations and will allow the Company to become a focused provider of coating and galvanizing solutions for critical applications. As a result, the results of the AIS segment were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for the three and nine months ended November 30, 2022. As part of recognizing the business as held for sale in accordance with GAAP, the Company was required to measure AIS at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during fiscal 2023, the Company recognized a non-cash, pre-tax loss on disposal of $159.9 million, of which $45.0 million was recognized during the three months ended November 30, 2022, and $114.9 million was recognized during the second quarter of fiscal 2023. The loss is included in "Loss on disposal of discontinued operations" in the consolidated statements of operations. The loss was determined by comparing the fair value of the consideration received for the sale of a 60% interest in the AIS JV and the fair value of the Company’s retained 40% investment in the AIS JV with the net assets of the AIS JV immediately prior to the transaction. The fair value of the Company’s retained investment in the AIS JV was determined in a manner consistent with the transaction price received for the sale of the 60% interest in the AIS JV. The results of operations from discontinued operations for the three and nine months ended November 30, 2022, have been reflected as discontinued operations in the consolidated statements of operations and consist of the following (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Sales $ 42,300 $ 256,224 Cost of sales 35,020 202,707 Gross margin 7,280 53,517 Selling, general and administrative 4,074 26,186 Loss on disposal of discontinued operations 45,010 159,910 Operating loss from discontinued operations (41,804) (132,579) Interest expense 2 8 Other (income) expense, net 2,002 6,270 Loss from discontinued operations before income tax (43,808) (138,857) Income tax benefit (4,827) (25,910) Net loss from discontinued operations $ (38,981) $ (112,947) Loss per common share from discontinued operations: Basic loss per share $ (1.57) $ (4.55) Diluted loss per share $ (1.56) $ (4.52) The depreciation, amortization, capital expenditures, and significant operating and investing non-cash items of the discontinued operations consist of the following (in thousands): Nine Months Ended November 30, 2022 Depreciation and amortization $ 7,279 Purchase of property, plant and equipment 4,831 Non-cash loss on disposal of discontinued operations (159,910) Gain on sale of property, plant and equipment 486 |
Inventories (Notes)
Inventories (Notes) | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories The following table summarizes the components of inventory (in thousands): As of November 30, 2023 February 28, 2023 Raw material $ 120,761 $ 138,227 Work in process 1,587 1,558 Finished goods 4,389 4,135 Total inventories $ 126,737 $ 143,920 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 5. Earnings Per Share Basic earnings per share is based on the weighted average number of common shares outstanding during each year. Diluted earnings per share is calculated by giving effect to the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares during the year. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Numerator: Net income from continuing operations $ 26,890 $ 18,439 $ 83,744 $ 58,912 Dividends on preferred stock (3,600) (3,600) (10,800) (4,640) Numerator for basic earnings per share continuing operations $ 23,290 $ 14,839 $ 72,944 $ 54,272 Dividends on preferred stock 3,600 — 10,800 — Numerator for diluted earnings per share continuing operations $ 26,890 $ 14,839 $ 83,744 $ 54,272 Net loss from discontinued operations $ — $ (38,981) $ — $ (112,947) Net income (loss) available to common shareholders $ 23,290 $ (24,142) $ 72,944 $ (58,675) Dividends on preferred stock 3,600 — 10,800 — Numerator for diluted earnings per share—net income (loss) available to common shareholders $ 26,890 $ (24,142) $ 83,744 $ (58,675) Denominator: Weighted average shares outstanding for basic earnings per share 25,077 24,867 25,024 24,804 Effect of dilutive securities: Employee and director stock awards 136 128 137 180 Series A Convertible Preferred Stock 4,117 — 4,117 — Denominator for diluted earnings per share 29,330 24,995 29,278 24,984 Basic earnings (loss) per share Earnings per common share from continuing operations $ 0.93 $ 0.60 $ 2.91 $ 2.19 Loss per common share from discontinued operations $ — $ (1.57) $ — $ (4.55) Earnings (loss) per common share $ 0.93 $ (0.97) $ 2.91 $ (2.37) Diluted earnings (loss) per share Earnings per common share from continuing operations $ 0.92 $ 0.59 $ 2.86 $ 2.17 Loss per common share from discontinued operations $ — $ (1.56) $ — $ (4.52) Earnings (loss) per common share $ 0.92 $ (0.97) $ 2.86 $ (2.35) For the three months ended November 30, 2023 and 2022, approximately 120,819 and 103,403 shares related to employee equity awards, respectively, were excluded from the computation of diluted earnings per share, as their effect would have been anti-dilutive. For the nine months ended November 30, 2023 and 2022, 126,356 and 78,862 shares, respectively, were excluded from the computation of diluted earnings per share as their effect would have been anti-dilutive. In addition, all shares related to the Series A Convertible Preferred Stock (4.1 million weighted average shares) were excluded from the computation of diluted earnings per share for the three and nine months ended November 30, 2022, as their effect would have been anti-dilutive. These shares could be dilutive in future periods. |
Sales
Sales | 9 Months Ended |
Nov. 30, 2023 | |
Revenues [Abstract] | |
Sales | 6. Sales Disaggregated Sales The following table presents disaggregated sales, for continuing operations, by customer industry (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Sales: Construction $ 214,081 $ 205,316 $ 637,035 $ 493,573 Industrial 35,489 37,330 118,273 118,457 Consumer 29,384 29,864 99,537 78,972 Transportation 35,871 33,597 107,734 98,715 Electrical/Utility 24,804 26,131 76,116 69,100 Other (1) 41,976 41,063 132,325 128,328 Total Sales $ 381,605 $ 373,301 $ 1,171,020 $ 987,145 (1) Other includes less significant markets, such as agriculture, recreation, petro-chem, AZZ Tubular products and sales from recycling. See also Note 8 for sales information by operating segment. Contract Assets and Liabilities The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets (unbilled receivables), and contract liabilities (customer advances and deposits) on the consolidated balance sheets. Our contract assets and contract liabilities are primarily related to the AZZ Precoat Metals segment. Customer billing can occur subsequent to revenue recognition, resulting in contract assets. In addition, the Company can receive advances or deposits from its customers, before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Nov. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | 7. Supplemental Cash Flow Information In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in thousands): Nine Months Ended November 30, 2023 2022 Decrease (increase) in current assets: Accounts receivable, net $ 13,922 $ (6,927) Other receivables (4,033) (9,503) Inventories 17,191 (14,646) Contract assets 1,136 (3,950) Prepaid expenses and other (1,304) (6,195) Increase (decrease) in current liabilities: Accounts payable 8,654 (15,122) Income taxes payable (227) (3,784) Accrued expenses 3,480 25,158 Changes in current assets and current liabilities $ 38,819 $ (34,969) Cash flows related to interest and income taxes were as follows (in thousands): Nine Months Ended November 30, 2023 2022 Cash paid for interest $ 74,993 $ 52,488 Cash paid for income taxes 17,683 15,627 Supplemental disclosures of non-cash investing and financing activities were as follows (in thousands): Nine Months Ended November 30, 2023 2022 Issuance of preferred stock in exchange for convertible notes $ — $ 233,722 Accrued dividends on preferred stock 2,400 4,640 Accruals for capital expenditures 4,768 960 |
Operating Segments
Operating Segments | 9 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
Operating Segments | 8. Operating Segments Segment Information The Company’s Chief Executive Officer, who is the chief operating decision maker ("CODM"), reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Sales and operating income are the primary measures used by the CODM to evaluate segment operating performance and to allocate resources to the AZZ Metal Coatings and the AZZ Precoat Metals segments, and net income is the primary measure used by the CODM to evaluate performance and allocate resources to the AZZ Infrastructure Solutions segment. Expenses related to certain centralized administration or executive functions that are not specifically related to an operating segment are included in Corporate. As presented in Note 3, the AVAIL JV operating results for the period prior to deconsolidation are included within discontinued operations, with the exception of AZZ Crowley Tubing, which was retained by the Company and merged into the AZZ Metal Coatings segment. See Note 3 for the results of operations related to the AZZ Infrastructure Solutions segment. A summary of each of the Company's operating segments is as follows: AZZ Metal Coatings — provides hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating, and other metal coating applications to the steel fabrication and other industries through facilities located throughout the United States and Canada. Hot-dip galvanizing is a metallurgical manufacturing process in which molten zinc reacts to steel. The zinc alloying provides corrosion protection and extends the life cycle of fabricated steel for several decades. AZZ Precoat Metals — engages in the advanced application of protective and decorative coatings and related value-added manufacturing for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation and air conditioning (HVAC); container; transportation and other end markets. AZZ Infrastructure Solutions — consists of the equity in earnings of the Company's 40% investment in the AVAIL JV, as well as other expenses directly related to AIS receivables and liabilities that were retained following the divestiture of the AIS business. The AVAIL JV provides specialized products and services designed to support primarily industrial and electrical applications. The product offerings include custom switchgear, electrical enclosures, medium- and high-voltage bus ducts, explosion proof and hazardous duty lighting products. The AZZ Infrastructure Solutions segment also focuses on life-cycle extension for the power generation, refining and industrial infrastructure, through providing automated weld overlay solutions for corrosion and erosion mitigation. Net income from continuing operations by segment for the three and nine months ended November 30, 2023 and 2022 was as follows (in thousands): Three Months Ended November 30, 2023 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 163,186 $ 218,419 $ — $ — $ 381,605 Cost of sales 115,952 177,504 — — 293,456 Gross margin 47,234 40,915 — — 88,149 Selling, general and administrative 9,392 8,163 290 17,480 35,325 Operating income (loss) from continuing operations 37,842 32,752 (290) (17,480) 52,824 Interest expense — — — 25,855 25,855 Equity in earnings of unconsolidated subsidiaries — — (8,742) — (8,742) Other expense 29 — — 12 41 Income (loss) from continuing operations before income tax $ 37,813 $ 32,752 $ 8,452 (43,347) 35,670 Income tax expense 8,780 8,780 Net income (loss) from continuing operations $ (52,127) $ 26,890 Nine Months Ended November 30, 2023 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 501,816 $ 669,204 $ — $ — $ 1,171,020 Cost of sales 353,280 535,326 — — 888,606 Gross margin 148,536 133,878 — — 282,414 Selling, general and administrative 20,143 24,429 6,244 52,271 103,087 Operating income (loss) from continuing operations 128,393 109,449 (6,244) (52,271) 179,327 Interest expense — — — 82,331 82,331 Equity in earnings of unconsolidated subsidiaries — — (11,136) — (11,136) Other (income) expense 40 — — (49) (9) Income (loss) from continuing operations before income tax $ 128,353 $ 109,449 $ 4,892 (134,553) 108,141 Income tax expense 24,397 24,397 Net income (loss) from continuing operations $ (158,950) $ 83,744 (1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV, as well as other expenses related to receivables and liabilities that were retained by the Company following the sale of the AIS business. (2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments. (3) For fiscal year 2024, amortization expense for acquired intangible assets is included in Corporate expenses in "Selling, general and administrative" expense as these expenses are not allocated to the segments. Three Months Ended November 30, 2022 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 158,274 $ 215,027 $ — $ — $ 373,301 Cost of sales 120,134 180,085 — — 300,219 Gross margin 38,140 34,942 — — 73,082 Selling, general and administrative 4,594 13,889 — 9,206 27,689 Operating income (loss) from continuing operations 33,546 21,053 — (9,206) 45,393 Interest expense — — — 26,123 26,123 Equity in earnings of unconsolidated subsidiaries — — (1,006) — (1,006) Other income (124) — — (486) (610) Income (loss) from continuing operations before income tax $ 33,670 $ 21,053 $ 1,006 (34,843) 20,886 Income tax expense 2,447 2,447 Net income (loss) from continuing operations $ (37,290) $ 18,439 Nine Months Ended November 30, 2022 Metal Coatings Precoat Metals (4) Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 487,567 $ 499,578 $ — $ — $ 987,145 Cost of sales 350,152 402,303 — — 752,455 Gross margin 137,415 97,275 — — 234,690 Selling, general and administrative 13,603 33,361 — 50,283 97,247 Operating income (loss) from continuing operations 123,812 63,914 — (50,283) 137,443 Interest expense — — — 61,739 61,739 Equity in earnings of unconsolidated subsidiaries — — (1,006) — (1,006) Other (income) expense 6 (41) — (547) (582) Income (loss) from continuing operations before income tax $ 123,806 $ 63,955 $ 1,006 (111,475) 77,292 Income tax expense 18,380 18,380 Net income (loss) from continuing operations $ (129,855) $ 58,912 (1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV. (2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments. (3) For fiscal year 2023, amortization expense for acquired intangible assets is included in Metal Coatings expenses in "Cost of sales" and in Precoat Metals in "Selling, general and administrative" expense. (4) For the nine months ended November 30, 2022, Precoat Metals segment includes results from May 13, 2022 - November 30, 2022. Asset balances by operating segment for each period were as follows (in thousands): As of November 30, 2023 February 28, 2023 Assets: Metal Coatings $ 559,149 $ 588,337 Precoat Metals 1,504,828 1,488,810 Infrastructure Solutions - Investment in Joint Venture 97,238 84,760 Corporate 47,541 59,572 Total assets $ 2,208,756 $ 2,221,479 Financial Information About Geographical Areas Financial information about geographical areas for the periods presented was as follows (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Sales: United States $ 370,485 $ 363,660 $ 1,140,344 $ 951,855 Canada 11,120 9,641 30,676 35,290 Total $ 381,605 $ 373,301 $ 1,171,020 $ 987,145 As of November 30, 2023 February 28, 2023 Property, plant and equipment, net: United States $ 506,070 $ 478,722 Canada 19,268 19,781 Total $ 525,338 $ 498,503 |
Investments in Unconsolidated E
Investments in Unconsolidated Entity | 9 Months Ended |
Nov. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entity | 9. Investments in Unconsolidated Entity AVAIL JV |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Nov. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 10. Derivative Instruments Interest Rate Swap Derivative As a policy, the Company does not hold, issue or trade derivative instruments for speculative purposes. The Company may periodically enter into forward sale contracts to purchase a specified volume of zinc at fixed prices. These contracts are not accounted for as derivatives because they meet the criteria for the normal purchases and normal sales scope exception in ASC 815. We manage our exposure to fluctuations in interest rates using a mix of fixed and variable-rate debt. We utilize interest rate swap agreements to change the variable interest rate to a fixed rate on a portion of our variable-rate debt. On September 27, 2022, the Company entered into an interest rate swap agreement with banks that are parties to the 2022 Credit Agreement. On October 7, 2022, the agreement was amended to change the SOFR-based component of the interest rate on a portion of our variable-rate debt to a fixed rate of 4.277%, resulting in a total fixed rate of 8.627% (the "2022 Swap"). On August 17, 2023, the Company repriced its Term Loan B, to which the 2022 Swap is related, to reduce the interest rate to SOFR + 3.75%. Following the repricing, the 2022 Swap has a total fixed rate of 8.027%. The 2022 Swap had an initial notional amount of $550.0 million and a maturity date of September 30, 2025. The notional amount of the interest rate swap decreases by a pro-rata portion of any quarterly principal payments made on the Term Loan B, and the current notional amount is $543.1 million. The objective of the 2022 Swap is to eliminate the variability of cash flows in interest payments attributable to changes in benchmark one-month SOFR interest rates, for approximately one-half of the total amount of our variable-rate debt. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month SOFR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable-rate debt. We designated the 2022 Swap as a cash flow hedge at inception. Cash settlements, in the form of cash payments or cash receipts, of the 2022 Swap are recognized in interest expense. At November 30, 2023, changes in fair value attributable to the effective portion of the 2022 Swap were included on the condensed consolidated balance sheets in accumulated other comprehensive income. For derivative instruments that qualify for hedge accounting treatment, the fair value is recognized on our condensed consolidated balance sheets as derivative assets or liabilities with offsetting changes in fair value, to the extent effective, recognized in accumulated other comprehensive income until reclassified into earnings when the interest expense on the underlying debt is reflected in earnings. The portion of a cash flow hedge that does not offset the change in the fair value of the transaction being hedged, which is commonly referred to as the ineffective portion, is immediately recognized in earnings. During the nine months ended November 30, 2023, we reclassified $3.5 million before income tax, or $2.5 million net of tax, from other comprehensive income to earnings. |
Debt
Debt | 9 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt The Company’s long-term debt instruments and balances outstanding for each of the periods presented (in thousands): As of November 30, 2023 February 28, 2023 Revolving Credit Facility $ 10,000 $ 95,000 Term Loan B 1,030,250 1,030,250 Total debt, gross $ 1,040,250 $ 1,125,250 Unamortized debt issuance costs (60,246) (67,130) Total debt, net 980,004 1,058,120 Less current portion of long-term debt — — Long-term debt, net $ 980,004 $ 1,058,120 2022 Credit Agreement and Term Loan B The Company has a credit agreement with a syndicate of financial institutions as lenders that was entered into on May 13, 2022 (the "2022 Credit Agreement"). On August 17, 2023, the Company repriced the $1.0 billion Term Loan B, which was outstanding under the 2022 Credit Agreement as of November 30, 2023. The repricing reduced the interest rate margin by 50 basis points to an interest rate of Secured Overnight Financing Rate ("SOFR") plus 3.75% and removed the Credit Spread Adjustment, as defined in the 2022 Credit Agreement, of 10 basis points. The 2022 Credit Agreement includes the following significant terms: i. provides for a senior secured initial term loan in the aggregate principal amount of $1.3 billion (the "Term Loan B"), due May 13, 2029, which is secured by substantially all of the assets of the Company; ii. provides for a maximum senior secured Revolving Credit Facility in the aggregate principal amount of $400.0 million (the "Revolving Credit Facility"), due May 13, 2027; iii. includes a letter of credit sub-facility of up to $100.0 million, which is part of, and not in addition to, the Revolving Credit Facility; iv. borrowings under the Term Loan B bear an interest rate of SOFR plus 3.75% (following the repricing on August 17, 2023 as noted above) and the Revolving Credit Facility bears an interest rate of SOFR plus 4.25% (as of November 30, 2023—see Note 18 for information related to the repricing of the Company’s Revolving Credit Facility on December 20, 2023); v. includes customary affirmative and negative covenants, and events of default; including restrictions on the incurrence of non-ordinary course debt, investment and dividends, subject to various exceptions; and, vi. includes a maximum quarterly leverage ratio financial covenant, with reporting requirements to our banking group at each quarter-end. The Company utilizes proceeds from the Revolving Credit Facility primarily to finance working capital needs, capital improvements, dividends, acquisitions and for general corporate purposes. As defined in the credit agreement, quarterly prepayments were due against the outstanding principal of the Term Loan B and were payable on the last business day of each May, August, November and February, beginning August 31, 2022, in a quarterly aggregate principal amount of $3.25 million, with the entire remaining principal amount due on May 13, 2029, the maturity date. Additional prepayments made against the Term Loan B contribute to these required quarterly payments. Due to a prepayment of $240.0 million that the Company made on the Term Loan B during fiscal year 2023 in connection with the sale of the AIS business, the quarterly mandatory principal payment requirement has been met, and the quarterly payments of $3.25 million are not required at this time. The weighted average interest rate for the Company's outstanding debt, including the Revolving Credit Facility and the Term Loan B, was 8.54% at November 30, 2023. The Company's credit agreement required the Company to maintain a maximum Total Net Leverage Ratio (as defined in the loan agreement) no greater than 6.25 through November 2022. For each subsequent quarter, the maximum ratio decreases by 25 basis points through May 31, 2024, when the maximum Total Net Leverage Ratio reaches 4.5. As of November 30, 2023, the Company was required to maintain a Total Net Leverage Ratio no greater than 5.0. As of November 30, 2023, we were in compliance with all covenants or other requirements set forth in the debt agreements. As of November 30, 2023, we had $1.04 billion of floating- and fixed-rate debt outstanding on the Revolving Credit Facility and the Term Loan B, with varying maturities through fiscal 2029. As of November 30, 2023, we are in compliance with each of the covenants related to these outstanding borrowings. Additionally, as of November 30, 2023, we had approximately $375.5 million of additional credit available for future draws or letters of credit. Letters of Credit As of November 30, 2023, we had total outstanding letters of credit in the amount of $14.5 million. These letters of credit are issued for a number of reasons, but are most commonly issued in lieu of customer retention withholding payments covering warranty, performance periods and insurance collateral. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Nov. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 12. Fair Value Measurements Recurring Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. In accordance with ASC 820, Fair Value Measurements and Disclosures ("ASC 820"), certain of the Company’s assets and liabilities, which are carried at fair value, are classified in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data and reflect the Company’s own assumptions. The carrying amount of the Company's financial instruments (cash equivalents, accounts receivable, accounts payable and accrued liabilities) approximates the fair value of these instruments based upon their short-term nature. Interest Rate Swap Agreement The Company’s derivative instrument consists of an interest rate swap contract, which is a Level 2 of the fair value hierarchy and included in "Other assets" in the condensed consolidated balance sheet as of November 30, 2023. See Note 10 for more information. The Company’s financial instrument that is measured at fair value on a recurring basis as of November 30, 2023 and February 28, 2023 is as follows (dollars in thousands): Carrying Value Carrying Value November 30, Fair Value Measurements Using February 28, Fair Value Measurements Using 2023 Level 1 Level 2 Level 3 2023 Level 1 Level 2 Level 3 Assets (Liabilities): Interest Rate Swap Agreement $ 2,975 $ — $ 2,975 $ — $ 3,925 $ — $ 3,925 $ — Total Assets $ 2,975 $ 3,925 Non-recurring Fair Value Measurements Investment in Joint Venture The fair value of the AVAIL JV that is accounted for under the equity method was determined based on the transaction price. Subsequent measurement of the fair value of the AVAIL JV is determined based on the income approach. The income approach uses discounted cash flow models that require various observable and non-observable inputs, such as operating margins, revenues, product costs, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates. These valuations resulted in Level 3 nonrecurring fair value measurements. As of November 30, 2023, the estimated fair value of the investment in the AVAIL JV approximates the carrying value of $97.2 million. Long-Term Debt The fair value of the Company’s Term Loan B is based on quoted market prices in active markets and is included in the Level 1 fair value hierarchy. The fair value of the Company’s revolving credit facility is estimated based on market values for debt issues with similar characteristics or rates currently available for debt with similar terms and is included in the Level 2 fair value hierarchy. The principal amount of our outstanding debt was $1.04 billion and $1.13 billion at November 30, 2023 and February 28, 2023, respectively. The estimated fair value of our outstanding debt was $1.04 billion and $1.13 billion at November 30, 2023 and February 28, 2023, respectively. |
Leases
Leases | 9 Months Ended |
Nov. 30, 2023 | |
Leases [Abstract] | |
Leases | 13. Leases The Company is a lessee under various leases for facilities and equipment. As of November 30, 2023, the Company was the lessee for 159 operating leases and 25 finance leases with terms of 12 months or more. Many of the operating leases either have renewal options of between one and five years or convert to month-to-month agreements at the end of the specified lease term. The Company’s operating leases are primarily for (i) operating facilities, (ii) vehicles and equipment used in operations, (iii) facilities used for back-office functions and (iv) equipment used for back-office functions, and (v) temporary storage. The majority of the Company’s long-term lease expenses have both a fixed and variable component. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases, including month-to-month agreements. The Company's short-term lease agreements include expenses incurred hourly, daily, monthly and for other durations of time of one year or less. The Company’s future lease commitments as of November 30, 2023 do not reflect all of the Company’s short-term lease commitments. The following table outlines the classification of the Company's right-of-use asset and lease liabilities in the balance sheets as of November 30, 2023 and February 28, 2023 (in thousands): Balance Sheet Classification As of November 30, 2023 February 28, 2023 Assets Right-of-use assets Right-of-use assets $ 22,830 $ 26,392 Liabilities Operating lease liabilities ― short-term Lease liability - short-term $ 5,999 $ 6,119 Operating lease liabilities ― long-term Lease liability - long-term 15,732 19,659 Finance lease liabilities ― short-term Lease liability - short-term 454 284 Finance lease liabilities ― long-term Lease liability - long-term 1,380 1,045 Supplemental information related to the Company's portfolio of operating leases from continuing operations was as follows (in thousands, except years and percentages): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Operating cash flows from operating leases included in lease liabilities $ 1,811 $ 2,862 $ 5,471 $ 8,069 Lease liabilities obtained from new ROU assets - operating 60 2,396 1,942 4,938 Decrease in ROU assets related to lease terminations — — (1,294) — Operating and financing cash flows from financing leases included in lease liabilities 130 70 330 182 Lease liabilities obtained from new ROU assets - financing 173 — 773 398 As of November 30, 2023 February 28, 2023 Weighted-average remaining lease term - operating leases 4.29 years 5.04 years Weighted-average discount rate - operating leases 4.44 % 4.31 % Weighted-average remaining lease term - financing leases 4.25 years 4.61 years Weighted-average discount rate - financing leases 5.66 % 5.15 % The following table outlines the classification of lease expense related to operating leases from continuing operations, in the statements of operations (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Cost of sales $ 2,997 $ 3,306 $ 9,234 $ 8,590 Selling, general and administrative 495 494 1,500 1,435 Total lease cost $ 3,492 $ 3,800 $ 10,734 $ 10,025 As of November 30, 2023, maturities of the Company's lease liabilities were as follows (in thousands): Fiscal year: Operating Leases Finance Leases Total 2024 $ 1,787 $ 136 $ 1,923 2025 6,532 536 7,068 2026 5,583 459 6,042 2027 4,410 423 4,833 2028 2,441 349 2,790 2029 1,871 138 2,009 Thereafter 1,252 24 1,276 Total lease payments $ 23,876 $ 2,065 $ 25,941 Less imputed interest (2,145) (231) (2,376) Total $ 21,731 $ 1,834 $ 23,565 The Company subleases multiple buildings in Columbia, South Carolina to multiple subtenants. The Columbia sublease agreements are by and between AZZ Precoat Metals and multiple subtenants. Sublease income is recognized over the term of the sublease on a straight-line basis and is reported in the consolidated statement of operations in "Cost of sales." The Company recognized $0.3 million and $0.8 million of income from subleases during the three and nine months ended November 30, 2023, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Nov. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 14. Income Taxes Continuing Operations The provision for income taxes from continuing operations reflects an effective tax rate of 24.6% for the three months ended November 30, 2023, compared to 11.7% for the three months ended November 30, 2022. The increase in the effective tax rate is attributable to a favorable adjustment in the prior year period due to the recognition of an outside basis difference related to the AVAIL JV. The provision for income taxes from continuing operations reflects an effective tax rate of 22.6% for the nine months ended November 30, 2023, compared to 23.8% for the prior year comparable period. The decrease in the effective tax rate is attributable to an unfavorable adjustment in the prior year related to management fees recorded as a result of continuing operations versus discontinued operations reporting. Discontinued Operations The following table outlines income or loss and the related tax expense (benefit) from discontinued operations for the three and nine months ended November 30, 2022 (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Income from discontinued operations before income taxes $ 1,202 $ 21,053 Income tax (expense) benefit 463 (3,927) Income from discontinued operations, net of tax $ 1,665 $ 17,126 Loss on disposal of discontinued operations $ (45,010) $ (159,910) Income tax benefit 4,364 29,837 Loss on disposal of discontinued operations, net of tax $ (40,646) $ (130,073) The provision for income taxes from discontinued operations reflects an effective tax rate of 11.0% and 18.7% for the three and nine months ended November 30, 2022. |
Equity
Equity | 9 Months Ended |
Nov. 30, 2023 | |
Equity [Abstract] | |
Equity | 15. Equity Series A Convertible Preferred Stock On August 5, 2022, the Company exchanged its $240.0 million aggregate principal amount of 6.0% convertible subordinated notes due June 30, 2030 for 240,000 shares of 6.0% Series A Convertible Preferred Stock, following the receipt of shareholder approval for the issuance of preferred stock. The Series A Convertible Preferred Stock is convertible by the holder at any time into shares of the Company's common stock at a conversion price of $58.30 per common share. The preferred stock accumulates a 6.0% dividend per annum. Dividends are payable quarterly on March 31, June 30, September 30 and December 31 of each year. In addition, the preferred shares are subject to a minimum conversion threshold of 1,000 shares per conversion, and customary anti-dilution and dividend adjustments. The preferred shares have full voting rights as if converted and have a fully participating liquidation preference. As of both November 30, 2023 and February 28, 2023, the 240,000 shares of outstanding Series A Convertible Preferred Stock had accrued dividends of $2.4 million and could be converted into 4.1 million shares of common stock, at the option of the holder. Accumulated Other Comprehensive Income The components of accumulated other comprehensive income (loss) ("AOCI"), after tax, for the three and nine months ended November 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended November 30, 2023 2022 Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Balance as of beginning of period $ (9,307) $ 119 $ 3,374 $ (5,814) $ (30,070) $ — $ — $ (30,070) Other comprehensive income before reclassification 3,029 — (115) 2,914 (5,019) — (3,512) (8,531) Amounts reclassified from AOCI — — (1,057) (1,057) 27,750 — — 27,750 Net change in AOCI 3,029 — (1,172) 1,857 22,731 — (3,512) 19,219 Balance as of end of period $ (6,278) $ 119 $ 2,202 $ (3,957) $ (7,339) $ — $ (3,512) $ (10,851) Nine Months Ended November 30, 2023 2022 Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Balance as of beginning of period $ (7,571) $ 119 $ 2,879 $ (4,573) $ (27,324) $ — $ — $ (27,324) Other comprehensive income before reclassification 1,293 — 1,867 3,160 (7,765) — (3,512) (11,277) Amounts reclassified from AOCI — — (2,544) (2,544) 27,750 — — 27,750 Net change in AOCI 1,293 — (677) 616 19,985 — (3,512) 16,473 Balance as of end of period $ (6,278) $ 119 $ 2,202 $ (3,957) $ (7,339) $ — $ (3,512) $ (10,851) |
Defined Benefit Pension Plan
Defined Benefit Pension Plan | 9 Months Ended |
Nov. 30, 2023 | |
Retirement Benefits [Abstract] | |
Defined Benefit Pension Plan | 16. Defined Benefit Pension Plan Pension and Employee Benefit Obligations In the Company's Precoat Metals segment, certain current or past employees participate in a defined benefit pension plan (the "Plan"). Prior to the Precoat Acquisition, benefit accruals were frozen for all participants. After the freeze, participants no longer accrued benefits under the Plan, and new hires of AZZ Precoat Metals are not eligible to participate in the Plan. As of November 30, 2023, the Plan was underfunded, and the Company has a pension liability of $31.6 million, which is included in "Other long-term liabilities" in the consolidated balance sheets and represents the underfunded portion of the Plan. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Nov. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies Legal The Company and its subsidiaries are named defendants and plaintiffs in various routine lawsuits incidental to our business. These proceedings include labor and employment claims, various commercial disputes, use of the Company’s intellectual property, worker’s compensation and environmental matters, all arising in the normal course of business. As discovery progresses on all outstanding legal matters, the Company will continue to evaluate opportunities to either settle the disputes for nuisance value or potentially enter into mediation as a way to resolve the disputes prior to trial. As the pending cases progress through additional discovery and potential mediation, our assessment of the likelihood of an unfavorable outcome on the pending lawsuits may change. Although the outcome of these lawsuits or other proceedings cannot be predicted with certainty, and the amount of any potential liability that could arise with respect to such lawsuits or other matters cannot be predicted at this time, management, after consultation with legal counsel believes it has strong defenses to all of these matters and does not expect liabilities, if any, from these claims or proceedings, either individually or in the aggregate, to have a material effect on the Company’s financial position, results of operations or cash flows. The Company’s prior-owned affiliate ₋ The Calvert Company entered into a series of commercial contracts in 2011 and 2015 to provide equipment and services to a power plant in Georgia. The general contractor on the project, WECTEC (a subsidiary of Westinghouse), filed bankruptcy in New York in March of 2017. The Company’s affiliate continued to perform work on the project for the owners/licensee under an interim bridge contract. We believe the affiliate was eventually terminated for convenience on the project, and the affiliate filed an adversary proceeding in bankruptcy court against WECTEC and the owners to collect all unpaid amounts. The owners of the Georgia power plant filed a countersuit in April of 2018. In connection with the Company selling the majority interest in the AIS business to Fernweh Group on September 30, 2022, the Company agreed to retain this lawsuit. After a long and protracted discovery process and motion practice, we determined in the quarter ended August 30, 2023 that the most favorable outcome to the Company to resolve the dispute may be a negotiated settlement. This decision was made in consideration of the expenses of a lengthy jury trial and potentially protracted appeal process; the resources necessary to continue the prosecution and defense of the case given the size of the discovery and the number of issues involved; the risk factors typically associated with jury verdicts in light of all of the political circumstances currently present in Georgia regarding the power plant; and the benefit of resolving a dispute whose genesis arose more than twelve years ago based solely upon risk avoidance, and not upon the merits of the case. During the third quarter of fiscal 2024, all of the parties entered into a confidential settlement agreement, with no parties admitting any guilt or negligence and the Company agreed to pay the owners/licensee $5.75 million on or around January 15, 2024 to resolve all outstanding matters related to the dispute. In addition, the agreement included the forgiveness of the Company's receivable from WECTEC of $3.7 million, which was fully reserved by the Company. This settlement of $5.75 million was accrued during the second quarter of fiscal year 2024, and is included in "Selling, general and administrative" expense in the consolidated statement of operations for the nine months ended November 30, 2023 and in "Other accrued liabilities" in the consolidated balance sheet as of November 30, 2023. The settlement was included in the AZZ Infrastructure Solutions segment, and the settlement payment will be made in the fourth quarter of fiscal 2024. In 2017, Southeast Texas Industries, Inc. (“STI”) filed a breach of contract lawsuit against the Company in the 1st District Court of Jasper County, Texas (the “Court”). In 2020, the Company filed a counter suit against STI for amounts due to the Company for work performed. The parties unsuccessfully mediated the case in November 2021. On October 16, 2023, the case went to trial, and on October 27, 2023, the jury rendered a verdict in favor of STI and against AZZ Beaumont in the amount of $4.5 million in damages for breach of contract and breach of express warranty. After a final judgment amount is entered with the Court, the Company expects to pursue all available appellate options as the Company believes it has strong grounds for appeal, which may take up to 2 years. As of November 30, 2023, the Company has recorded a legal accrual of $4.5 million, which is included in "Other accrued liabilities" on our consolidated balance sheets, reflecting the Company's best estimate of the probable loss. It is reasonably possible that our estimate of the probable loss may change after: (i) the hearing on attorney fees, which is currently scheduled for January 26, 2024; (ii) after the Judge renders a final judgement; or (iii) throughout the appellate process. The Company expects to purchase a supersedeas bond to cover the final judgment amount throughout the duration of the appellate process. A litigation matter between the Company and a previous customer of an affiliate of the AIS business, which was retained following the disposition of the AIS business, is scheduled to go to trial during the fourth quarter of fiscal 2024. The Company is the Plaintiff and believes that it will be able to recover its damages against the Defendant. As of November 30, 2023, the Company has a receivable due from the Defendant, net of allowance, of $5.2 million, which is included in "Accounts receivable, net" in the consolidated balance sheets, which the Company believes is collectible. However, neither the likelihood of an unfavorable outcome nor the ultimate collectability of this receivable, if any, can be determined at this time. Environmental The Company assumed certain environmental liabilities as part of the Precoat Acquisition described in Note 2. As of November 30, 2023, t he reserve balance for environmental liabilities was $22.0 million, of which $3.2 million is classified as current. Environmental remediation liabilities include costs directly associated with site investigation and clean up, such as materials, external contractor costs, legal and consulting expenses and incremental internal costs directly related to ongoing remediation plans. Estimates used to record environmental remediation liabilities are based on the Company's best estimate of probable future costs based on site-specific facts and circumstances known at the time of the estimate and these estimates are updated on a quarterly basis. Estimates of the cost for the potential or ongoing remediation plans are developed using internal resources and third-party environmental engineers and consultants. The Company accrues the anticipated cost of environmental remediation when the obligation is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. While any revisions to the Company's environmental remediation liabilities could be material to the operating results of any fiscal quarter or fiscal year, the Company does not expect such additional remediation expenses to have an adverse material effect on its financial position, results of operations, or cash flows. Capital Commitments—Greenfield Aluminum Coil Coating Facility We are expanding our coatings capabilities by constructing a new 25-acre aluminum coil coating facility in Washington, Missouri that is expected to be operational in 2025. The new facility will be included in the AZZ Precoat Metals segment and is supported by a take-or-pay contract for approximately 75% of the output from the new plant. We expect to spend approximately $125.8 million in progress payments over the estimated two-year construction timeline and we currently have capital commitments of approximately $48.4 million. We expect to pay approximately $71.2 million in fiscal 2024, of which $33.6 million was paid during the current nine-month period. The remaining payments in fiscal 2024 are expected to be funded through cash flows from operations and borrowings under the Revolving Credit Facility. The project is not expected to result in a material adverse effect on our business, results of operations, cash flow or financial condition. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Nov. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) | $ 26,890 | $ (20,542) | $ 83,744 | $ (54,035) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Nov. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Policies) | 9 Months Ended |
Nov. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Consolidation | AZZ Inc. ("AZZ", the "Company", "our" or "we") was established in 1956 and incorporated under the laws of the state of Texas. We are a provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets in North America. We have three distinct operating segments: the AZZ Metal Coatings segment, the AZZ Precoat Metals segment, and the AZZ Infrastructure Solutions segment. The Company's AZZ Metal Coatings segment is a leading provider of metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating to the North American steel fabrication and other industries. The AZZ Precoat Metals segment provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil, primarily serving the construction; appliance; heating, ventilation, and air conditioning (HVAC); container; transportation and other end markets in North America. The AZZ Infrastructure Solutions segment consists of the Company's 40% interest in AIS Investment Holdings LLC (the "AVAIL JV"). AIS Investment Holdings LLC is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in markets worldwide. AIS Investment Holdings LLC was wholly-owned by the Company until September 30, 2022, when AZZ contributed its' AZZ Infrastructure Solutions segment, excluding AZZ Crowley Tubing and excluding certain receivables retained by AZZ ("AIS"), to the AVAIL JV and sold a 60% interest in the AVAIL JV to Fernweh Group LLC ("Fernweh"). For the three and nine months ended November 30, 2022, financial data for the AZZ Infrastructure Solutions segment is segregated and reported as discontinued operations. Presentation The accompanying condensed consolidated balance sheet as of February 28, 2023 was derived from audited financial statements. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 28, 2023, included in the Company’s Annual Report on Form 10-K covering such period. Certain previously reported amounts have been reclassified to conform to current period presentation. See Note 3 for more information about results of operations reported in discontinued operations in the consolidated statement of operations and statement of cash flows for the three and nine months ended November 30, 2022. The Company's fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ending February 29, 2024 is referred to as fiscal 2024. |
Other receivables | Other receivables Other receivables includes income taxes receivable, receivables for supplier rebates, and other miscellaneous receivables. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are currently assessing the impact of this update on our consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. We are currently assessing the impact of this update on our consolidated financial statement disclosures. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table represents the summary of the assets acquired and liabilities assumed, in aggregate, related to the Precoat Acquisition, as of the date of the acquisition (in thousands): May 13, 2022 Assets Accounts receivable, net $ 77,422 Inventories 43,369 Contract assets 68,314 Prepaid expenses and other 2,247 Property, plant and equipment 305,503 Right-of-use assets 13,753 Goodwill 527,793 Deferred tax asset 8,660 Intangible assets, net 446,000 Other assets 546 Total fair value of assets acquired $ 1,493,607 Liabilities Accounts payable $ (99,223) Accrued expenses (31,761) Other accrued liabilities (5,330) Lease liability, short-term (2,440) Lease liability, long-term (11,313) Other long-term liabilities (60,091) Total fair value of liabilities assumed $ (210,158) Total purchase price, net of cash acquired $ 1,283,449 |
Pro forma information | Three Months Ended November 30, Nine Months Ended November 30, 2022 2022 Revenue $ 373,301 $ 1,180,165 Net income from continuing operations (1) $ 18,439 $ 43,442 (1) Net income for the nine months ended November 30, 2022 includes acquisition costs of approximately $45.0 million, of which $11.5 million was incurred by AZZ and $33.5 million was incurred by Precoat Metals prior to the acquisition. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The results of operations from discontinued operations for the three and nine months ended November 30, 2022, have been reflected as discontinued operations in the consolidated statements of operations and consist of the following (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Sales $ 42,300 $ 256,224 Cost of sales 35,020 202,707 Gross margin 7,280 53,517 Selling, general and administrative 4,074 26,186 Loss on disposal of discontinued operations 45,010 159,910 Operating loss from discontinued operations (41,804) (132,579) Interest expense 2 8 Other (income) expense, net 2,002 6,270 Loss from discontinued operations before income tax (43,808) (138,857) Income tax benefit (4,827) (25,910) Net loss from discontinued operations $ (38,981) $ (112,947) Loss per common share from discontinued operations: Basic loss per share $ (1.57) $ (4.55) Diluted loss per share $ (1.56) $ (4.52) The depreciation, amortization, capital expenditures, and significant operating and investing non-cash items of the discontinued operations consist of the following (in thousands): Nine Months Ended November 30, 2022 Depreciation and amortization $ 7,279 Purchase of property, plant and equipment 4,831 Non-cash loss on disposal of discontinued operations (159,910) Gain on sale of property, plant and equipment 486 The following table outlines income or loss and the related tax expense (benefit) from discontinued operations for the three and nine months ended November 30, 2022 (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Income from discontinued operations before income taxes $ 1,202 $ 21,053 Income tax (expense) benefit 463 (3,927) Income from discontinued operations, net of tax $ 1,665 $ 17,126 Loss on disposal of discontinued operations $ (45,010) $ (159,910) Income tax benefit 4,364 29,837 Loss on disposal of discontinued operations, net of tax $ (40,646) $ (130,073) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The following table summarizes the components of inventory (in thousands): As of November 30, 2023 February 28, 2023 Raw material $ 120,761 $ 138,227 Work in process 1,587 1,558 Finished goods 4,389 4,135 Total inventories $ 126,737 $ 143,920 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Numerator: Net income from continuing operations $ 26,890 $ 18,439 $ 83,744 $ 58,912 Dividends on preferred stock (3,600) (3,600) (10,800) (4,640) Numerator for basic earnings per share continuing operations $ 23,290 $ 14,839 $ 72,944 $ 54,272 Dividends on preferred stock 3,600 — 10,800 — Numerator for diluted earnings per share continuing operations $ 26,890 $ 14,839 $ 83,744 $ 54,272 Net loss from discontinued operations $ — $ (38,981) $ — $ (112,947) Net income (loss) available to common shareholders $ 23,290 $ (24,142) $ 72,944 $ (58,675) Dividends on preferred stock 3,600 — 10,800 — Numerator for diluted earnings per share—net income (loss) available to common shareholders $ 26,890 $ (24,142) $ 83,744 $ (58,675) Denominator: Weighted average shares outstanding for basic earnings per share 25,077 24,867 25,024 24,804 Effect of dilutive securities: Employee and director stock awards 136 128 137 180 Series A Convertible Preferred Stock 4,117 — 4,117 — Denominator for diluted earnings per share 29,330 24,995 29,278 24,984 Basic earnings (loss) per share Earnings per common share from continuing operations $ 0.93 $ 0.60 $ 2.91 $ 2.19 Loss per common share from discontinued operations $ — $ (1.57) $ — $ (4.55) Earnings (loss) per common share $ 0.93 $ (0.97) $ 2.91 $ (2.37) Diluted earnings (loss) per share Earnings per common share from continuing operations $ 0.92 $ 0.59 $ 2.86 $ 2.17 Loss per common share from discontinued operations $ — $ (1.56) $ — $ (4.52) Earnings (loss) per common share $ 0.92 $ (0.97) $ 2.86 $ (2.35) |
Sales (Tables)
Sales (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Revenues [Abstract] | |
Disaggregation of Revenue | The following table presents disaggregated sales, for continuing operations, by customer industry (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Sales: Construction $ 214,081 $ 205,316 $ 637,035 $ 493,573 Industrial 35,489 37,330 118,273 118,457 Consumer 29,384 29,864 99,537 78,972 Transportation 35,871 33,597 107,734 98,715 Electrical/Utility 24,804 26,131 76,116 69,100 Other (1) 41,976 41,063 132,325 128,328 Total Sales $ 381,605 $ 373,301 $ 1,171,020 $ 987,145 (1) Other includes less significant markets, such as agriculture, recreation, petro-chem, AZZ Tubular products and sales from recycling. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | In order to determine net cash provided by operating activities, net income is adjusted by, among other things, changes in current assets and current liabilities as follows (in thousands): Nine Months Ended November 30, 2023 2022 Decrease (increase) in current assets: Accounts receivable, net $ 13,922 $ (6,927) Other receivables (4,033) (9,503) Inventories 17,191 (14,646) Contract assets 1,136 (3,950) Prepaid expenses and other (1,304) (6,195) Increase (decrease) in current liabilities: Accounts payable 8,654 (15,122) Income taxes payable (227) (3,784) Accrued expenses 3,480 25,158 Changes in current assets and current liabilities $ 38,819 $ (34,969) Cash flows related to interest and income taxes were as follows (in thousands): Nine Months Ended November 30, 2023 2022 Cash paid for interest $ 74,993 $ 52,488 Cash paid for income taxes 17,683 15,627 Supplemental disclosures of non-cash investing and financing activities were as follows (in thousands): Nine Months Ended November 30, 2023 2022 Issuance of preferred stock in exchange for convertible notes $ — $ 233,722 Accrued dividends on preferred stock 2,400 4,640 Accruals for capital expenditures 4,768 960 |
Operating segments (Tables)
Operating segments (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Segment Reporting [Abstract] | |
Operations and assets by segment | Net income from continuing operations by segment for the three and nine months ended November 30, 2023 and 2022 was as follows (in thousands): Three Months Ended November 30, 2023 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 163,186 $ 218,419 $ — $ — $ 381,605 Cost of sales 115,952 177,504 — — 293,456 Gross margin 47,234 40,915 — — 88,149 Selling, general and administrative 9,392 8,163 290 17,480 35,325 Operating income (loss) from continuing operations 37,842 32,752 (290) (17,480) 52,824 Interest expense — — — 25,855 25,855 Equity in earnings of unconsolidated subsidiaries — — (8,742) — (8,742) Other expense 29 — — 12 41 Income (loss) from continuing operations before income tax $ 37,813 $ 32,752 $ 8,452 (43,347) 35,670 Income tax expense 8,780 8,780 Net income (loss) from continuing operations $ (52,127) $ 26,890 Nine Months Ended November 30, 2023 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 501,816 $ 669,204 $ — $ — $ 1,171,020 Cost of sales 353,280 535,326 — — 888,606 Gross margin 148,536 133,878 — — 282,414 Selling, general and administrative 20,143 24,429 6,244 52,271 103,087 Operating income (loss) from continuing operations 128,393 109,449 (6,244) (52,271) 179,327 Interest expense — — — 82,331 82,331 Equity in earnings of unconsolidated subsidiaries — — (11,136) — (11,136) Other (income) expense 40 — — (49) (9) Income (loss) from continuing operations before income tax $ 128,353 $ 109,449 $ 4,892 (134,553) 108,141 Income tax expense 24,397 24,397 Net income (loss) from continuing operations $ (158,950) $ 83,744 (1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV, as well as other expenses related to receivables and liabilities that were retained by the Company following the sale of the AIS business. (2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments. (3) For fiscal year 2024, amortization expense for acquired intangible assets is included in Corporate expenses in "Selling, general and administrative" expense as these expenses are not allocated to the segments. Three Months Ended November 30, 2022 Metal Coatings Precoat Metals Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 158,274 $ 215,027 $ — $ — $ 373,301 Cost of sales 120,134 180,085 — — 300,219 Gross margin 38,140 34,942 — — 73,082 Selling, general and administrative 4,594 13,889 — 9,206 27,689 Operating income (loss) from continuing operations 33,546 21,053 — (9,206) 45,393 Interest expense — — — 26,123 26,123 Equity in earnings of unconsolidated subsidiaries — — (1,006) — (1,006) Other income (124) — — (486) (610) Income (loss) from continuing operations before income tax $ 33,670 $ 21,053 $ 1,006 (34,843) 20,886 Income tax expense 2,447 2,447 Net income (loss) from continuing operations $ (37,290) $ 18,439 Nine Months Ended November 30, 2022 Metal Coatings Precoat Metals (4) Infrastructure Solutions (1) Corporate (2)(3) Total Sales $ 487,567 $ 499,578 $ — $ — $ 987,145 Cost of sales 350,152 402,303 — — 752,455 Gross margin 137,415 97,275 — — 234,690 Selling, general and administrative 13,603 33,361 — 50,283 97,247 Operating income (loss) from continuing operations 123,812 63,914 — (50,283) 137,443 Interest expense — — — 61,739 61,739 Equity in earnings of unconsolidated subsidiaries — — (1,006) — (1,006) Other (income) expense 6 (41) — (547) (582) Income (loss) from continuing operations before income tax $ 123,806 $ 63,955 $ 1,006 (111,475) 77,292 Income tax expense 18,380 18,380 Net income (loss) from continuing operations $ (129,855) $ 58,912 (1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV. (2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments. (3) For fiscal year 2023, amortization expense for acquired intangible assets is included in Metal Coatings expenses in "Cost of sales" and in Precoat Metals in "Selling, general and administrative" expense. (4) For the nine months ended November 30, 2022, Precoat Metals segment includes results from May 13, 2022 - November 30, 2022. |
Reconciliation of Assets from Segment to Consolidated | Asset balances by operating segment for each period were as follows (in thousands): As of November 30, 2023 February 28, 2023 Assets: Metal Coatings $ 559,149 $ 588,337 Precoat Metals 1,504,828 1,488,810 Infrastructure Solutions - Investment in Joint Venture 97,238 84,760 Corporate 47,541 59,572 Total assets $ 2,208,756 $ 2,221,479 |
Revenue from External Customers by Geographic Areas | Financial information about geographical areas for the periods presented was as follows (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Sales: United States $ 370,485 $ 363,660 $ 1,140,344 $ 951,855 Canada 11,120 9,641 30,676 35,290 Total $ 381,605 $ 373,301 $ 1,171,020 $ 987,145 |
Long-lived Assets by Geographic Areas | As of November 30, 2023 February 28, 2023 Property, plant and equipment, net: United States $ 506,070 $ 478,722 Canada 19,268 19,781 Total $ 525,338 $ 498,503 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entity (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Summarized Balance Sheet As of November 30, 2023 (1) Current assets $ 273,535 Long-term assets 173,312 Total assets $ 446,847 Current liabilities 102,225 Long-term liabilities 132,175 Total liabilities $ 234,400 Total partners' capital 212,447 Total liabilities and partners' capital $ 446,847 Summarized Operating Data Three Months Ended November 30, 2023 (1) Nine Months Ended November 30, 2023 (1) Sales $ 127,156 $ 346,493 Gross profit 36,150 87,013 Net income 13,139 21,969 (1) The Company reports on a one-month lag basis; therefore, amounts in the summarized financials above are as of and for the three and nine months ended October 31, 2023. Amounts in the table above exclude certain adjustments made by the Company to record equity in earnings of the AVAIL JV, primarily related to goodwill amortization. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s long-term debt instruments and balances outstanding for each of the periods presented (in thousands): As of November 30, 2023 February 28, 2023 Revolving Credit Facility $ 10,000 $ 95,000 Term Loan B 1,030,250 1,030,250 Total debt, gross $ 1,040,250 $ 1,125,250 Unamortized debt issuance costs (60,246) (67,130) Total debt, net 980,004 1,058,120 Less current portion of long-term debt — — Long-term debt, net $ 980,004 $ 1,058,120 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial instrument that is measured at fair value on a recurring basis as of November 30, 2023 and February 28, 2023 is as follows (dollars in thousands): Carrying Value Carrying Value November 30, Fair Value Measurements Using February 28, Fair Value Measurements Using 2023 Level 1 Level 2 Level 3 2023 Level 1 Level 2 Level 3 Assets (Liabilities): Interest Rate Swap Agreement $ 2,975 $ — $ 2,975 $ — $ 3,925 $ — $ 3,925 $ — Total Assets $ 2,975 $ 3,925 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Leases [Abstract] | |
Lease, Cost | The following table outlines the classification of the Company's right-of-use asset and lease liabilities in the balance sheets as of November 30, 2023 and February 28, 2023 (in thousands): Balance Sheet Classification As of November 30, 2023 February 28, 2023 Assets Right-of-use assets Right-of-use assets $ 22,830 $ 26,392 Liabilities Operating lease liabilities ― short-term Lease liability - short-term $ 5,999 $ 6,119 Operating lease liabilities ― long-term Lease liability - long-term 15,732 19,659 Finance lease liabilities ― short-term Lease liability - short-term 454 284 Finance lease liabilities ― long-term Lease liability - long-term 1,380 1,045 Supplemental information related to the Company's portfolio of operating leases from continuing operations was as follows (in thousands, except years and percentages): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Operating cash flows from operating leases included in lease liabilities $ 1,811 $ 2,862 $ 5,471 $ 8,069 Lease liabilities obtained from new ROU assets - operating 60 2,396 1,942 4,938 Decrease in ROU assets related to lease terminations — — (1,294) — Operating and financing cash flows from financing leases included in lease liabilities 130 70 330 182 Lease liabilities obtained from new ROU assets - financing 173 — 773 398 As of November 30, 2023 February 28, 2023 Weighted-average remaining lease term - operating leases 4.29 years 5.04 years Weighted-average discount rate - operating leases 4.44 % 4.31 % Weighted-average remaining lease term - financing leases 4.25 years 4.61 years Weighted-average discount rate - financing leases 5.66 % 5.15 % The following table outlines the classification of lease expense related to operating leases from continuing operations, in the statements of operations (in thousands): Three Months Ended November 30, Nine Months Ended November 30, 2023 2022 2023 2022 Cost of sales $ 2,997 $ 3,306 $ 9,234 $ 8,590 Selling, general and administrative 495 494 1,500 1,435 Total lease cost $ 3,492 $ 3,800 $ 10,734 $ 10,025 |
Lessee, Operating Lease, Liability, Maturity | As of November 30, 2023, maturities of the Company's lease liabilities were as follows (in thousands): Fiscal year: Operating Leases Finance Leases Total 2024 $ 1,787 $ 136 $ 1,923 2025 6,532 536 7,068 2026 5,583 459 6,042 2027 4,410 423 4,833 2028 2,441 349 2,790 2029 1,871 138 2,009 Thereafter 1,252 24 1,276 Total lease payments $ 23,876 $ 2,065 $ 25,941 Less imputed interest (2,145) (231) (2,376) Total $ 21,731 $ 1,834 $ 23,565 |
Finance Lease, Liability, Maturity | As of November 30, 2023, maturities of the Company's lease liabilities were as follows (in thousands): Fiscal year: Operating Leases Finance Leases Total 2024 $ 1,787 $ 136 $ 1,923 2025 6,532 536 7,068 2026 5,583 459 6,042 2027 4,410 423 4,833 2028 2,441 349 2,790 2029 1,871 138 2,009 Thereafter 1,252 24 1,276 Total lease payments $ 23,876 $ 2,065 $ 25,941 Less imputed interest (2,145) (231) (2,376) Total $ 21,731 $ 1,834 $ 23,565 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Nov. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Disposal Groups, Including Discontinued Operations | The results of operations from discontinued operations for the three and nine months ended November 30, 2022, have been reflected as discontinued operations in the consolidated statements of operations and consist of the following (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Sales $ 42,300 $ 256,224 Cost of sales 35,020 202,707 Gross margin 7,280 53,517 Selling, general and administrative 4,074 26,186 Loss on disposal of discontinued operations 45,010 159,910 Operating loss from discontinued operations (41,804) (132,579) Interest expense 2 8 Other (income) expense, net 2,002 6,270 Loss from discontinued operations before income tax (43,808) (138,857) Income tax benefit (4,827) (25,910) Net loss from discontinued operations $ (38,981) $ (112,947) Loss per common share from discontinued operations: Basic loss per share $ (1.57) $ (4.55) Diluted loss per share $ (1.56) $ (4.52) The depreciation, amortization, capital expenditures, and significant operating and investing non-cash items of the discontinued operations consist of the following (in thousands): Nine Months Ended November 30, 2022 Depreciation and amortization $ 7,279 Purchase of property, plant and equipment 4,831 Non-cash loss on disposal of discontinued operations (159,910) Gain on sale of property, plant and equipment 486 The following table outlines income or loss and the related tax expense (benefit) from discontinued operations for the three and nine months ended November 30, 2022 (in thousands): Three Months Ended Nine Months Ended November 30, 2022 November 30, 2022 Income from discontinued operations before income taxes $ 1,202 $ 21,053 Income tax (expense) benefit 463 (3,927) Income from discontinued operations, net of tax $ 1,665 $ 17,126 Loss on disposal of discontinued operations $ (45,010) $ (159,910) Income tax benefit 4,364 29,837 Loss on disposal of discontinued operations, net of tax $ (40,646) $ (130,073) |
Equity (Tables)
Equity (Tables) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Equity [Abstract] | ||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) ("AOCI"), after tax, for the three and nine months ended November 30, 2023 and 2022 consisted of the following (in thousands): Three Months Ended November 30, 2023 2022 Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Balance as of beginning of period $ (9,307) $ 119 $ 3,374 $ (5,814) $ (30,070) $ — $ — $ (30,070) Other comprehensive income before reclassification 3,029 — (115) 2,914 (5,019) — (3,512) (8,531) Amounts reclassified from AOCI — — (1,057) (1,057) 27,750 — — 27,750 Net change in AOCI 3,029 — (1,172) 1,857 22,731 — (3,512) 19,219 Balance as of end of period $ (6,278) $ 119 $ 2,202 $ (3,957) $ (7,339) $ — $ (3,512) $ (10,851) Nine Months Ended November 30, 2023 2022 Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Foreign Currency Translation Gain (Loss) Net Actuarial Gain (Loss), Net of Tax Interest Rate Swap, Net of Tax Total Balance as of beginning of period $ (7,571) $ 119 $ 2,879 $ (4,573) $ (27,324) $ — $ — $ (27,324) Other comprehensive income before reclassification 1,293 — 1,867 3,160 (7,765) — (3,512) (11,277) Amounts reclassified from AOCI — — (2,544) (2,544) 27,750 — — 27,750 Net change in AOCI 1,293 — (677) 616 19,985 — (3,512) 16,473 Balance as of end of period $ (6,278) $ 119 $ 2,202 $ (3,957) $ (7,339) $ — $ (3,512) $ (10,851) | |||
Amounts reclassified from AOCI | $ (1,057) | $ 27,750 | $ (2,544) | $ 27,750 |
The Company and Basis of Pres_3
The Company and Basis of Presentation (Details) - operating_segments | 9 Months Ended | |
Nov. 30, 2023 | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Number of operating segments | 3 | |
AIS Joint Venture | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Ownership percentage of investment | 40% | |
Discontinued Operations, Disposed of by Sale | AZZ Infrastructure Solutions | AIS Joint Venture | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Percentage of investment sold | 0.60 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | May 13, 2022 | Nov. 30, 2023 | Feb. 28, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 705,487 | $ 702,512 | |
Precoat Metals Business Division | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 1,300,000 | ||
Goodwill | $ 527,793 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 | May 13, 2022 |
Assets | |||
Goodwill | $ 705,487 | $ 702,512 | |
Other assets | $ 546 | ||
Precoat Metals Business Division | |||
Assets | |||
Accounts receivable | 77,422 | ||
Inventories | 43,369 | ||
Contract assets | 68,314 | ||
Prepaid expenses and other | 2,247 | ||
Property, plant and equipment | 305,503 | ||
Right-of-use asset | 13,753 | ||
Goodwill | 527,793 | ||
Deferred tax asset | 8,660 | ||
Intangibles | 446,000 | ||
Total fair value of assets acquired | 1,493,607 | ||
Liabilities | |||
Accounts payable and other accrued liabilities | (99,223) | ||
Accrued expenses | (31,761) | ||
Other accrued liabilities | (5,330) | ||
Lease liability, short-term | (2,440) | ||
Lease liability, long-term | (11,313) | ||
Other long-term liabilities | (60,091) | ||
Total fair value of liabilities assumed | (210,158) | ||
Total purchase price, net of cash acquired | $ 1,283,449 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Business Acquisition [Line Items] | |||
Revenue | $ 373,301 | $ 1,180,165 | |
Net income from continuing operations | $ 18,439 | $ 43,442 | |
Acquisition costs | $ 45,000 | ||
Azz Inc. | |||
Business Acquisition [Line Items] | |||
Acquisition costs | 11,500 | ||
Precoat Metals | |||
Business Acquisition [Line Items] | |||
Acquisition costs | $ 33,500 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Q) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Aug. 31, 2022 | Nov. 30, 2022 | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal | $ 45,010 | $ 159,910 | ||
Discontinued Operations, Disposed of by Sale | AZZ Infrastructure Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal | $ 45,010 | $ 114,900 | $ 159,910 | |
AIS Joint Venture | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Ownership percentage of investment | 40% | |||
AIS Joint Venture | Discontinued Operations, Disposed of by Sale | AZZ Infrastructure Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Percentage of investment sold | 0.60 |
Discontinued Operations - Disco
Discontinued Operations - Discontinued Operations in Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Aug. 31, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposal | $ 45,010 | $ 159,910 | |||
Net income (loss) from discontinued operations | $ 0 | $ (38,981) | $ 0 | $ (112,947) | |
Loss per common share from discontinued operations: | |||||
Earnings (loss) per common share from discontinued operations (in dollars per share) | $ 0 | $ (1.57) | $ 0 | $ (4.55) | |
Earnings (loss) per common share from discontinued operations (in dollars per share) | $ 0 | $ (1.56) | $ 0 | $ (4.52) | |
Discontinued Operations, Disposed of by Sale | AZZ Infrastructure Solutions | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sales | $ 42,300 | $ 256,224 | |||
Cost of sales | 35,020 | 202,707 | |||
Gross margin | 7,280 | 53,517 | |||
Selling, general and administrative | 4,074 | 26,186 | |||
Loss on disposal | 45,010 | $ 114,900 | 159,910 | ||
Operating income (loss) from discontinued operations | (41,804) | (132,579) | |||
Interest expense | 2 | 8 | |||
Other (income) expense, net | 2,002 | 6,270 | |||
Income (loss) from discontinued operations before income tax | (43,808) | (138,857) | |||
Income tax (benefit) expense | (4,827) | (25,910) | |||
Net income (loss) from discontinued operations | $ (38,981) | $ (112,947) | |||
Loss per common share from discontinued operations: | |||||
Earnings (loss) per common share from discontinued operations (in dollars per share) | $ (1.57) | $ (4.55) | |||
Earnings (loss) per common share from discontinued operations (in dollars per share) | $ (1.56) | $ (4.52) |
Discontinued Operations - Depre
Discontinued Operations - Depreciation, Amortization, Capital Expenditures, and Significant Operating and Investing Noncash Items of the Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Aug. 31, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal of discontinued operations, net of tax | $ (45,010) | $ (159,910) | ||
Gain on sale of property, plant and equipment | $ 39 | 1,381 | ||
Discontinued Operations, Disposed of by Sale | AZZ Infrastructure Solutions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Amortization and depreciation | 7,279 | |||
Purchase of property, plant and equipment | 4,831 | |||
Loss on disposal of discontinued operations, net of tax | $ (45,010) | $ (114,900) | (159,910) | |
Gain on sale of property, plant and equipment | $ 486 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Inventory Disclosure [Abstract] | ||
Raw material | $ 120,761 | $ 138,227 |
Work-in-process | 1,587 | 1,558 |
Finished goods | 4,389 | 4,135 |
Total Inventory | $ 126,737 | $ 143,920 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Numerator: | ||||
Net income from continuing operations | $ 26,890 | $ 18,439 | $ 83,744 | $ 58,912 |
Dividends on preferred stock | 3,600 | 3,600 | 10,800 | 4,640 |
Numerator for diluted earnings per share—net income (loss) available to common shareholders | 26,890 | (24,142) | 83,744 | (58,675) |
Net income from continuing operations available to common shareholders | 23,290 | 14,839 | 72,944 | 54,272 |
Dividends on preferred stock | 3,600 | 0 | 10,800 | 0 |
Numerator for diluted earnings per share continuing operations | 26,890 | 14,839 | 83,744 | 54,272 |
Net income (loss) from discontinued operations | 0 | (38,981) | 0 | (112,947) |
Net income (loss) available to common shareholders | $ 23,290 | $ (24,142) | $ 72,944 | $ (58,675) |
Denominator: | ||||
Denominator for basic earnings per common share-weighted average shares (shares) | 25,077,000 | 24,867,000 | 25,024,000 | 24,804,000 |
Effect of dilutive securities: | ||||
Employee and director stock awards | 136,000 | 128,000 | 137,000 | 180,000 |
Series A convertible preferred stock (shares) | 4,117,000 | 0 | 4,117,000 | 0 |
Denominator for diluted earnings per common share (shares) | 29,330,000 | 24,995,000 | 29,278,000 | 24,984,000 |
Earnings per common share from continuing operations | ||||
Earnings (loss) per common share from continuing operations (in dollars per share) | $ 0.93 | $ 0.60 | $ 2.91 | $ 2.19 |
Earnings (loss) per common share from continuing operations (in dollars per share) | 0.92 | 0.59 | 2.86 | 2.17 |
Earnings per common share from discontinued operations: | ||||
Earnings (loss) per common share from discontinued operations (in dollars per share) | 0 | (1.57) | 0 | (4.55) |
Earnings (loss) per common share from discontinued operations (in dollars per share) | 0 | (1.56) | 0 | (4.52) |
Computation of basic and diluted earnings per share | ||||
Basic earnings per common share (usd per share) | 0.93 | (0.97) | 2.91 | (2.37) |
Diluted earnings per common share (usd per share) | $ 0.92 | $ (0.97) | $ 2.86 | $ (2.35) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Share-based Payment Arrangement | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 120,819 | 103,403 | 126,356 | 78,862 |
Convertible Preferred Stock | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 4,100,000 | 4,100,000 |
Sales Disaggregated Revenues (D
Sales Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 381,605 | $ 373,301 | $ 1,171,020 | $ 987,145 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 35,489 | 37,330 | 118,273 | 118,457 |
Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 29,384 | 29,864 | 99,537 | 78,972 |
Transportation | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 35,871 | 33,597 | 107,734 | 98,715 |
Electrical/Utility | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 24,804 | 26,131 | 76,116 | 69,100 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 41,976 | 41,063 | 132,325 | 128,328 |
Construction | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 214,081 | $ 205,316 | $ 637,035 | $ 493,573 |
Sales - Narrative (Details)
Sales - Narrative (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 1,000 | $ 1,300 |
Contract assets | $ 75,719 | $ 79,273 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - New Cash Provided by Operating Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Decrease (increase) in current assets: | ||
Accounts receivable, net | $ 13,922 | $ (6,927) |
Other receivables | (4,033) | (9,503) |
Inventories | 17,191 | (14,646) |
Contract assets | 1,136 | (3,950) |
Prepaid expenses and other | (1,304) | (6,195) |
Increase (decrease) in current liabilities: | ||
Accounts payable | 8,654 | (15,122) |
Income taxes payable | (227) | (3,784) |
Accrued expenses | 3,480 | 25,158 |
Changes in current assets and current liabilities | $ 38,819 | $ (34,969) |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Cash Related to Interest and Income Taxes and Supplemental Disclosures of Non-Cash Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Nov. 30, 2023 | Nov. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 74,993 | $ 52,488 |
Cash paid for income taxes | 17,683 | 15,627 |
Issuance of preferred stock in exchange for convertible notes | 0 | 233,722 |
Accrued dividends on Series A Preferred Stock | 2,400 | 4,640 |
Accruals for capital expenditures | $ 4,768 | $ 960 |
Operating segments (Details)
Operating segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | Sep. 30, 2022 | |
Operations and assets by segment | ||||||
Sales | $ 381,605 | $ 373,301 | $ 1,171,020 | $ 987,145 | ||
Cost of sales | 293,456 | 300,219 | 888,606 | 752,455 | ||
Gross margin | 88,149 | 73,082 | 282,414 | 234,690 | ||
Selling, general and administrative | 35,325 | 27,689 | 103,087 | 97,247 | ||
Operating income (loss) | 52,824 | 45,393 | 179,327 | 137,443 | ||
Interest expense | 25,855 | 26,123 | 82,331 | 61,739 | ||
Equity in (earnings) loss of unconsolidated subsidiaries | (8,742) | (1,006) | (11,136) | (1,006) | ||
Other expense | 41 | (610) | (9) | (582) | ||
Income taxes | 8,780 | 2,447 | 24,397 | 18,380 | ||
Net income from continuing operations | 26,890 | 18,439 | 83,744 | 58,912 | ||
Income (loss) from continuing operations before income tax | 35,670 | 20,886 | 108,141 | 77,292 | ||
Assets: | 2,208,756 | 2,208,756 | $ 2,221,479 | |||
Property, plant and equipment, net | 525,338 | 525,338 | 498,503 | |||
AIS Joint Venture | ||||||
Operations and assets by segment | ||||||
Ownership percentage of investment | 40% | |||||
United States | ||||||
Operations and assets by segment | ||||||
Sales | 370,485 | 363,660 | 1,140,344 | 951,855 | ||
Property, plant and equipment, net | 506,070 | 506,070 | 478,722 | |||
Canada | ||||||
Operations and assets by segment | ||||||
Sales | 11,120 | 9,641 | 30,676 | 35,290 | ||
Property, plant and equipment, net | 19,268 | 19,268 | 19,781 | |||
Corporate | ||||||
Operations and assets by segment | ||||||
Sales | 0 | 0 | 0 | 0 | ||
Cost of sales | 0 | 0 | 0 | 0 | ||
Gross margin | 0 | 0 | 0 | 0 | ||
Selling, general and administrative | 17,480 | 9,206 | 52,271 | 50,283 | ||
Operating income (loss) | (17,480) | (9,206) | (52,271) | (50,283) | ||
Interest expense | 25,855 | 26,123 | 82,331 | 61,739 | ||
Equity in (earnings) loss of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Other expense | 12 | (486) | (49) | (547) | ||
Income taxes | 8,780 | 2,447 | 24,397 | 18,380 | ||
Net income from continuing operations | (52,127) | (37,290) | (158,950) | (129,855) | ||
Income (loss) from continuing operations before income tax | (43,347) | (34,843) | (134,553) | (111,475) | ||
Assets: | 47,541 | 47,541 | 59,572 | |||
Metal Coatings | Operating Segments | ||||||
Operations and assets by segment | ||||||
Sales | 163,186 | 158,274 | 501,816 | 487,567 | ||
Cost of sales | 115,952 | 120,134 | 353,280 | 350,152 | ||
Gross margin | 47,234 | 38,140 | 148,536 | 137,415 | ||
Selling, general and administrative | 9,392 | 4,594 | 20,143 | 13,603 | ||
Operating income (loss) | 37,842 | 33,546 | 128,393 | 123,812 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Equity in (earnings) loss of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Other expense | 29 | (124) | 40 | 6 | ||
Income (loss) from continuing operations before income tax | 37,813 | 33,670 | 128,353 | 123,806 | ||
Assets: | 559,149 | 559,149 | 588,337 | |||
Precoat Metals | Operating Segments | ||||||
Operations and assets by segment | ||||||
Sales | 218,419 | 215,027 | 669,204 | 499,578 | ||
Cost of sales | 177,504 | 180,085 | 535,326 | 402,303 | ||
Gross margin | 40,915 | 34,942 | 133,878 | 97,275 | ||
Selling, general and administrative | 8,163 | 13,889 | 24,429 | 33,361 | ||
Operating income (loss) | 32,752 | 21,053 | 109,449 | 63,914 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Equity in (earnings) loss of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||
Other expense | 0 | 0 | 0 | (41) | ||
Income (loss) from continuing operations before income tax | 32,752 | 21,053 | 109,449 | 63,955 | ||
Assets: | 1,504,828 | 1,504,828 | 1,488,810 | |||
Infrastructure Solutions | Operating Segments | ||||||
Operations and assets by segment | ||||||
Sales | 0 | 0 | 0 | 0 | ||
Cost of sales | 0 | 0 | 0 | 0 | ||
Gross margin | 0 | 0 | 0 | 0 | ||
Selling, general and administrative | 290 | 0 | 6,244 | 0 | ||
Operating income (loss) | (290) | 0 | (6,244) | 0 | ||
Interest expense | 0 | 0 | 0 | 0 | ||
Equity in (earnings) loss of unconsolidated subsidiaries | (8,742) | (1,006) | (11,136) | (1,006) | ||
Other expense | 0 | 0 | 0 | 0 | ||
Income (loss) from continuing operations before income tax | 8,452 | $ 1,006 | 4,892 | $ 1,006 | ||
Assets: | $ 97,238 | $ 97,238 | $ 84,760 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entity - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in joint venture | $ 97,200 | $ 97,200 | ||||
Equity in (earnings) loss of unconsolidated subsidiaries | (8,742) | $ (1,006) | (11,136) | $ (1,006) | ||
Accounts payable, current | 95,158 | 95,158 | $ 84,256 | |||
Equity Method Investee | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Accounts payable, current | 4,600 | 4,600 | 6,300 | |||
AIS Joint Venture | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage of investment | 40% | |||||
Investment in joint venture | $ 97,238 | 97,238 | $ 84,760 | |||
AIS Joint Venture | AZZ Infrastructure Solutions | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in (earnings) loss of unconsolidated subsidiaries | $ (11,100) | |||||
AIS Joint Venture | AZZ Infrastructure Solutions | Discontinued Operations, Disposed of by Sale | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage of investment sold | 0.60 | |||||
Investment in joint venture | $ 97,200 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Schedule of Condensed Balance Sheet For AIS Joint Venture (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Assets [Abstract] | ||
Current Assets | $ 392,728 | $ 417,416 |
Total assets | 2,208,756 | 2,221,479 |
Liabilities [Abstract] | ||
Current liabilities | 200,000 | 187,240 |
Liabilities | 1,287,606 | 1,368,019 |
Total liabilities and shareholders' equity | 2,208,756 | $ 2,221,479 |
AIS Joint Venture | ||
Assets [Abstract] | ||
Current Assets | 273,535 | |
Non-current assets | 173,312 | |
Total assets | 446,847 | |
Liabilities [Abstract] | ||
Current liabilities | 102,225 | |
Non-current liabilities | 132,175 | |
Liabilities | 234,400 | |
Partners' Capital | 212,447 | |
Total liabilities and shareholders' equity | $ 446,847 |
Investments in Unconsolidated_5
Investments in Unconsolidated Entities - Schedule of Condensed Statement of Operations for AIS Joint Venture (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Statement [Abstract] | ||||
Gross margin | $ 88,149 | $ 73,082 | $ 282,414 | $ 234,690 |
AIS Joint Venture | ||||
Income Statement [Abstract] | ||||
Sales | 127,156 | 346,493 | ||
Gross margin | 36,150 | 87,013 | ||
Net income | $ 13,139 | $ 21,969 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Aug. 17, 2023 | Sep. 27, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Reclassification of AOCI, before tax | $ (3,500) | |||||
Amounts reclassified from accumulated other comprehensive income to earnings, net of tax | $ (1,057) | $ 0 | (2,544) | $ 0 | ||
Interest Rate Swap | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Fixed interest rate on swap agreement | 8.027% | 8.627% | ||||
Notional amount on swap agreement | $ 543,100 | $ 543,100 | $ 550,000 | |||
Interest Rate Swap, Portion Of Variable Rate Debt | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Fixed interest rate on swap agreement | 3.75% | 4.277% |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 |
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 1,040,250 | $ 1,125,250 | $ 1,130,000 | |
Unamortized debt issuance costs | (60,246) | (67,130) | ||
Fair value of outstanding debt | 980,004 | 1,058,120 | ||
Less current portion of long-term debt | 0 | 0 | ||
Long-term debt, net | 980,004 | 1,058,120 | ||
Term Loan B | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | 1,030,250 | $ 1,000,000 | 1,030,250 | |
Line of Credit | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 10,000 | $ 95,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||||
May 31, 2024 | Dec. 19, 2023 | Aug. 17, 2023 | Aug. 31, 2022 | May 31, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Dec. 20, 2023 | Feb. 28, 2023 | May 13, 2022 | |
Debt Instrument [Line Items] | ||||||||||
Weighted average interest rate | 8.54% | |||||||||
Letters of credit outstanding | $ 14,500 | |||||||||
Fair value of outstanding debt | $ 980,004 | $ 1,058,120 | ||||||||
Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Decrease to interest rate margin | 0.50% | |||||||||
Initial interest rate margin | 0.10% | |||||||||
Periodic payments | $ 3,250 | |||||||||
2022 Credit Agreement And Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total net leverage ratio maximum | 500% | 625% | ||||||||
2022 Credit Agreement And Term Loan B | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total net leverage ratio maximum | 450% | |||||||||
Note Payable, Floating And Fixed Rate, Maturing Through Fiscal Year 2029 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fair value of outstanding debt | $ 1,040,000 | |||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread | 3.75% | |||||||||
Senior Notes | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Remaining borrowing capacity on line of credit | $ 375,500 | |||||||||
Loans Payable | Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 1,300,000 | |||||||||
Convertible Debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | 240,000 | |||||||||
Revolving Credit Facility | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Initial interest rate margin | 0.10% | |||||||||
Revolving Credit Facility | 2022 Credit Agreement And Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 400,000 | |||||||||
Revolving Credit Facility | 2022 Credit Agreement And Term Loan B | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 400,000 | |||||||||
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread | 4.25% | |||||||||
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread | 4.25% | |||||||||
Standby And Commercial Letters Of Credit | 2022 Credit Agreement And Term Loan B | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Accordion feature | $ 100,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ 2,975 | $ 3,925 |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | (2,975) | (3,925) |
Interest Rate Swap | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Interest Rate Swap | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | (2,975) | (3,925) |
Interest Rate Swap | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Nov. 30, 2023 | Feb. 28, 2023 | Nov. 30, 2022 |
Fair Value Disclosures [Abstract] | |||
Investment in joint venture | $ 97,200 | ||
Total debt, gross | 1,040,250 | $ 1,125,250 | $ 1,130,000 |
Fair value of outstanding debt | $ 1,040,000 | $ 1,130,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Nov. 30, 2023 USD ($) lease | Nov. 30, 2023 USD ($) lease | |
Leases [Abstract] | ||
Number of operating leases | 159 | 159 |
Number of finance leases | 25 | 25 |
Sublease income | $ | $ 0.3 | $ 0.8 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | |
Lessee, Lease, Description [Line Items] | |||||
Right-of-use assets | $ 22,830 | $ 22,830 | $ 26,392 | ||
Operating lease liabilities ― short-term | $ 5,999 | $ 5,999 | $ 6,119 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liability, short-term | Lease liability, short-term | Lease liability, short-term | ||
Operating lease liabilities ― long-term | $ 15,732 | $ 15,732 | $ 19,659 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liability, long-term | Lease liability, long-term | Lease liability, long-term | ||
Finance lease liabilities ― short-term | $ 454 | $ 454 | $ 284 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Lease liability, short-term | Lease liability, short-term | Lease liability, short-term | ||
Finance lease liabilities ― long-term | $ 1,380 | $ 1,380 | $ 1,045 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Lease liability, long-term | Lease liability, long-term | Lease liability, long-term | ||
Total lease cost | $ 3,492 | $ 3,800 | $ 10,734 | $ 10,025 | |
Cost of sales | |||||
Lessee, Lease, Description [Line Items] | |||||
Total lease cost | 2,997 | 3,306 | 9,234 | 8,590 | |
Selling, general and administrative | |||||
Lessee, Lease, Description [Line Items] | |||||
Total lease cost | $ 495 | $ 494 | $ 1,500 | $ 1,435 |
Leases - Lease Details (Details
Leases - Lease Details (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | Feb. 28, 2023 | |
Lease, Cost [Abstract] | |||||
Operating cash flows from operating leases included in lease liabilities | $ 1,811 | $ 2,862 | $ 5,471 | $ 8,069 | |
Lease liabilities obtained from new ROU assets - operating | 60 | 2,396 | 1,942 | 4,938 | |
Decrease in ROU assets related to lease terminations | 0 | 0 | (1,294) | 0 | |
Operating and financing cash flows from financing leases included in lease liabilities | 130 | 70 | 330 | 182 | |
Lease liabilities obtained from new ROU assets - financing | $ 173 | $ 0 | $ 773 | $ 398 | |
Weighted-average remaining lease term - operating leases | 4 years 3 months 14 days | 4 years 3 months 14 days | 5 years 14 days | ||
Weighted-average discount rate - operating leases | 4.44% | 4.44% | 4.31% | ||
Weighted-average remaining lease term - financing leases | 4 years 3 months | 4 years 3 months | 4 years 7 months 9 days | ||
Weighted-average discount rate - financing leases | 5.66% | 5.66% | 5.15% |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) $ in Thousands | Nov. 30, 2023 USD ($) |
Operating Leases | |
2024 | $ 1,787 |
2025 | 6,532 |
2026 | 5,583 |
2027 | 4,410 |
2028 | 2,441 |
2029 | 1,871 |
Thereafter | 1,252 |
Total lease payments | 23,876 |
Less imputed interest | (2,145) |
Total | 21,731 |
Finance Leases | |
2024 | 136 |
2025 | 536 |
2026 | 459 |
2027 | 423 |
2028 | 349 |
2029 | 138 |
Thereafter | 24 |
Total lease payments | 2,065 |
Less imputed interest | (231) |
Total | 1,834 |
2024 | 1,923 |
2025 | 7,068 |
2026 | 6,042 |
2027 | 4,833 |
2028 | 2,790 |
2029 | 2,009 |
Thereafter | 1,276 |
Total lease payments | 25,941 |
Less imputed interest | (2,376) |
Total | $ 23,565 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) from discontinued operations before income tax | $ 1,202 | $ 21,053 | ||
Income tax (benefit) expense | 463 | (3,927) | ||
Income from discontinued operations, net of tax | $ 0 | 1,665 | $ 0 | 17,126 |
Loss on disposal of discontinued operations, net of tax | (45,010) | (159,910) | ||
Income tax benefit | 4,364 | 29,837 | ||
Loss on disposal of discontinued operations, net of tax | $ 0 | $ (40,646) | $ 0 | $ (130,073) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate, continuing operations (percent) | 24.60% | 11.70% | 22.60% | 23.80% |
Effective income tax rate, discontinuing operations (percent) | 11% | 18.70% |
Equity - Series A Convertible P
Equity - Series A Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 05, 2022 | Nov. 30, 2023 | Feb. 28, 2023 |
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 240,000 | 240,000 | |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 240,000 | ||
Dividend rate (as a percent) | 6% | ||
Conversion price (in dollars per share) | $ 58.30 | ||
Minimum conversion threshold (in shares) | 1,000 | ||
Dividends payable | $ 2.4 | ||
Preferred stock, shares issued (in shares) | 4,100,000 | ||
Convertible Debt | |||
Class of Stock [Line Items] | |||
Aggregate debt amount | $ 240 | ||
Converted instrument rate (as a percent) | 6% |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2023 | Nov. 30, 2022 | Nov. 30, 2023 | Nov. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning balance | $ 898,077 | $ 859,621 | $ 853,460 | $ 667,365 |
Other comprehensive income (loss) before reclassification | 2,914 | (8,531) | 3,160 | (11,277) |
Amounts reclassified from AOCI | (1,057) | 27,750 | (2,544) | 27,750 |
Net change in AOCI | 1,857 | 19,219 | 616 | 16,473 |
Balance, ending balance | 921,150 | 852,513 | 921,150 | 852,513 |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning balance | (9,307) | (30,070) | (7,571) | (27,324) |
Other comprehensive income (loss) before reclassification | 3,029 | (5,019) | 1,293 | (7,765) |
Amounts reclassified from AOCI | 0 | 27,750 | 0 | 27,750 |
Net change in AOCI | 3,029 | 22,731 | 1,293 | 19,985 |
Balance, ending balance | (6,278) | (7,339) | (6,278) | (7,339) |
Accummulated Net Actuarial Gain (Loss), Net Of Tax Adjustment Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning balance | 119 | 0 | 119 | 0 |
Other comprehensive income (loss) before reclassification | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Net change in AOCI | 0 | 0 | 0 | 0 |
Balance, ending balance | 119 | 0 | 119 | 0 |
Accumulated Interest Rate Swap, Net of Tax Adjustment Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning balance | 3,374 | 0 | 2,879 | 0 |
Other comprehensive income (loss) before reclassification | (115) | (3,512) | 1,867 | (3,512) |
Amounts reclassified from AOCI | (1,057) | 0 | (2,544) | 0 |
Net change in AOCI | (1,172) | (3,512) | (677) | (3,512) |
Balance, ending balance | 2,202 | (3,512) | 2,202 | (3,512) |
Accumulated Other Comprehensive Loss | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance, beginning balance | (5,814) | (30,070) | (4,573) | (27,324) |
Balance, ending balance | $ (3,957) | $ (10,851) | $ (3,957) | $ (10,851) |
Defined Benefit Pension Plan (D
Defined Benefit Pension Plan (Details) $ in Millions | Nov. 30, 2023 USD ($) |
Precoat Metals Business Division | |
Business Acquisition [Line Items] | |
Accumulated benefit obligation in excess of plan assets | $ 31.6 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended | ||
Nov. 30, 2023 USD ($) | Oct. 27, 2023 USD ($) | Nov. 30, 2023 USD ($) a | |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency accrual | $ 5,750 | $ 5,750 | |
Amount awarded to other party | 4,500 | $ 4,500 | 5,750 |
Decrease in accounts receivable due to forgiveness | 3,700 | ||
Loss contingency, receivable, current | 5,200 | 5,200 | |
Appeal process duration (in years) | 2 years | ||
Environment liability | 22,000 | 22,000 | |
Environmental liability, current | $ 3,200 | $ 3,200 | |
Area of facility (in acres) | a | 25 | ||
Percent of output under take-or-pay contract | 0.75 | 0.75 | |
Unrecorded purchase obligation | $ 125,800 | $ 125,800 | |
Construction timeline term | 2 years | ||
Long-term purchase commitment, amount | $ 48,400 | ||
Purchase obligation to be paid in year one | $ 71,200 | 71,200 | |
Purchase obligations | $ 33,600 |
Subsequent Events (Details)
Subsequent Events (Details) - Revolving Credit Facility - USD ($) $ in Millions | 1 Months Ended | |||
Dec. 20, 2023 | Dec. 19, 2023 | May 31, 2022 | May 13, 2022 | |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Subsequent Event [Line Items] | ||||
Basis spread | 4.25% | |||
2022 Credit Agreement And Term Loan B | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 400 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Initial interest rate margin | 0.10% | |||
Subsequent Event | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Subsequent Event [Line Items] | ||||
Basis spread | 4.25% | |||
Subsequent Event | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||||
Subsequent Event [Line Items] | ||||
Basis spread | 2.75% | |||
Subsequent Event | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||
Subsequent Event [Line Items] | ||||
Basis spread | 3.50% | |||
Subsequent Event | 2022 Credit Agreement And Term Loan B | ||||
Subsequent Event [Line Items] | ||||
Maximum borrowing capacity | $ 400 |