XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.23.4

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 |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration