XML 26 R14.htm IDEA: XBRL DOCUMENT
v3.24.3

Operating Segments | 6 Months Ended
--- | ---
Aug. 31, 2024
Segment Reporting [Abstract] |
Operating Segments | 6. Operating Segments Segment Information Our 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. A summary of each of our 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 industry and other industries through facilities located throughout North America. Hot-dip galvanizing is a metallurgical manufacturing process in which molten zinc reacts with steel, which provides corrosion protection and extends the lifecycle of fabricated steel for several decades. AZZ Precoat Metals — provides coil coating application of protective and decorative coatings and related value-added downstream processing for steel and aluminum coils. Primarily serving the construction, appliance, heating, ventilation, and air conditioning (HVAC), container, transportation, and other end markets, the coil coating process emphasizes sustainability and enhanced product lifecycles. It involves cleaning, treating, painting, and curing metal coils as a flat material before they are cut, formed, and fabricated into finished products. This highly efficient method optimizes waste through tight film control and improves final product performance by painting and curing the substrates under conditions unmatched by other application processes. AZZ Infrastructure Solutions — consists of the equity in earnings of our 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 is a global provider of application-critical equipment, highly engineered technologies, and specialized services to the power generation, transmission, distribution, oil and gas, and industrial markets. The following tables contain operating segment data for the three and six months ended August 31, 2024 and 2023 by segment, for the Company's corporate operations and on a consolidated basis (in thousands):
| Three Months Ended August 31, 2024
| Metal Coatings |  | Precoat Metals |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 171,500 |  |  | $ | 237,507 |  |  | $ | — |  |  | $ | — |  |  | $ | 409,007 |
Cost of sales | 118,193 |  |  | 187,300 |  |  | — |  |  | — |  |  | 305,493 |
Gross margin | 53,307 |  |  | 50,207 |  |  | — |  |  | — |  |  | 103,514 |
Selling, general and administrative | 5,619 |  |  | 7,677 |  |  | 9 |  |  | 22,563 |  |  | 35,868 |
Operating income (loss) | 47,688 |  |  | 42,530 |  |  | (9) |  |  | (22,563) |  |  | 67,646 |
Interest expense | — |  |  | — |  |  | — |  |  | (21,909) |  |  | (21,909) |
Equity in earnings of unconsolidated subsidiaries | — |  |  | — |  |  | 1,478 |  |  | — |  |  | 1,478 |
Other (expense) income | (7) |  |  | — |  |  | — |  |  | 424 |  |  | 417 |
Income (loss) before income tax | $ | 47,681 |  |  | $ | 42,530 |  |  | $ | 1,469 |  |  | (44,048) |  |  | 47,632 |
Income tax expense |  |  |  |  |  |  | 12,213 |  |  | 12,213 |
Net income (loss) |  |  |  |  |  |  | $ | (56,261) |  |  | $ | 35,419 |
See notes below tables.
| Six Months Ended August 31, 2024
| Metal Coatings |  | Precoat Metals |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 348,152 |  |  | $ | 474,063 |  |  | $ | — |  |  | $ | — |  |  | $ | 822,215 |
Cost of sales | 240,929 |  |  | 375,102 |  |  | — |  |  | — |  |  | 616,031 |
Gross margin | 107,223 |  |  | 98,961 |  |  | — |  |  | — |  |  | 206,184 |
Selling, general and administrative | 11,602 |  |  | 16,338 |  |  | 38 |  |  | 40,811 |  |  | 68,789 |
Operating income (loss) | 95,621 |  |  | 82,623 |  |  | (38) |  |  | (40,811) |  |  | 137,395 |
Interest expense | — |  |  | — |  |  | — |  |  | (44,683) |  |  | (44,683) |
Equity in earnings of unconsolidated subsidiaries | — |  |  | — |  |  | 5,302 |  |  | — |  |  | 5,302 |
Other income | 49 |  |  | — |  |  | — |  |  | 572 |  |  | 621 |
Income (loss) before income tax | $ | 95,670 |  |  | $ | 82,623 |  |  | $ | 5,264 |  |  | (84,922) |  |  | 98,635 |
Income tax expense |  |  |  |  |  |  | 23,614 |  |  | 23,614 |
Net income (loss) |  |  |  |  |  |  | $ | (108,536) |  |  | $ | 75,021 |
See notes below tables.
| Three Months Ended August 31, 2023
| Metal Coatings |  | Precoat Metals |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 169,837 |  |  | $ | 228,705 |  |  | $ | — |  |  | $ | — |  |  | $ | 398,542 |
Cost of sales | 119,471 |  |  | 181,825 |  |  | — |  |  | — |  |  | 301,296 |
Gross margin | 50,366 |  |  | 46,880 |  |  | — |  |  | — |  |  | 97,246 |
Selling, general and administrative | 5,285 |  |  | 7,874 |  |  | 5,932 |  |  | 17,148 |  |  | 36,239 |
Operating income (loss) | 45,081 |  |  | 39,006 |  |  | (5,932) |  |  | (17,148) |  |  | 61,007 |
Interest expense | — |  |  | — |  |  | — |  |  | (27,770) |  |  | (27,770) |
Equity in earnings of unconsolidated subsidiaries | — |  |  | — |  |  | 974 |  |  | — |  |  | 974 |
Other income | 13 |  |  | — |  |  | — |  |  | 75 |  |  | 88 |
Income (loss) before income tax | $ | 45,094 |  |  | $ | 39,006 |  |  | $ | (4,958) |  |  | (44,843) |  |  | 34,299 |
Income tax expense |  |  |  |  |  |  | 5,967 |  |  | 5,967 |
Net income (loss) |  |  |  |  |  |  | $ | (50,810) |  |  | $ | 28,332 |
See notes below tables.
| Six Months Ended August 31, 2023
| Metal Coatings |  | Precoat Metals(4) |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 338,631 |  |  | $ | 450,784 |  |  | $ | — |  |  | $ | — |  |  | $ | 789,415 |
Cost of sales | 237,328 |  |  | 357,822 |  |  | — |  |  | — |  |  | 595,150 |
Gross margin | 101,303 |  |  | 92,962 |  |  | — |  |  | — |  |  | 194,265 |
Selling, general and administrative | 10,751 |  |  | 16,266 |  |  | 5,954 |  |  | 34,791 |  |  | 67,762 |
Operating income (loss) | 90,552 |  |  | 76,696 |  |  | (5,954) |  |  | (34,791) |  |  | 126,503 |
Interest expense | — |  |  | — |  |  | — |  |  | (56,476) |  |  | (56,476) |
Equity in earnings of unconsolidated subsidiaries | — |  |  | — |  |  | 2,394 |  |  | — |  |  | 2,394 |
Other income (expense) | (11) |  |  | — |  |  | — |  |  | 61 |  |  | 50 |
Income (loss) before income tax | $ | 90,541 |  |  | $ | 76,696 |  |  | $ | (3,560) |  |  | (91,206) |  |  | 72,471 |
Income tax expense |  |  |  |  |  |  | 15,617 |  |  | 15,617 |
Net income (loss) |  |  |  |  |  |  | $ | (106,823) |  |  | $ | 56,854 |
(1) Infrastructure Solutions segment includes the equity in earnings from our investment in the AVAIL JV as well as other expenses related to receivables and liabilities that were retained 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. Asset balances by operating segment for each period were as follows (in thousands):
|  | As of
|  | August 31, 2024 |  | February 29, 2024
Assets: |  |  |  |
Metal Coatings |  | $ | 550,394 |  |  | $ | 553,505 |
Precoat Metals |  | 1,557,895 |  |  | 1,500,122 |
Infrastructure Solutions - Investment in Joint Venture |  | 97,768 |  |  | 98,169 |
Corporate |  | 34,273 |  |  | 43,709 |
Total assets |  | $ | 2,240,330 |  |  | $ | 2,195,505 |
Financial Information About Geographical Areas Financial information about geographical areas for the periods presented was as follows (in thousands). The geographic area is based on the location of the operating facility and no customer accounted for 10 percent or more of consolidated sales.
| Three Months Ended August 31, |  | Six Months Ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sales: |  |  |  |  |  |  |
United States | $ | 398,658 |  |  | $ | 388,538 |  |  | $ | 801,709 |  |  | $ | 769,860 |
Canada | 10,349 |  |  | 10,004 |  |  | 20,506 |  |  | 19,555 |
Total | $ | 409,007 |  |  | $ | 398,542 |  |  | $ | 822,215 |  |  | $ | 789,415 |
|  | As of
|  | August 31, 2024 |  | February 29, 2024
Property, plant and equipment, net: |  |  |  |
United States |  | $ | 550,761 |  |  | $ | 522,693 |
Canada |  | 18,971 |  |  | 18,959 |
Total |  | $ | 569,732 |  |  | $ | 541,652 |

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