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v3.24.3

Leases (Tables) | 6 Months Ended
--- | ---
Aug. 31, 2024
Leases [Abstract] |
Lease, Cost | The following table outlines the classification of right-of-use ("ROU") asset and lease liabilities in the consolidated balance sheets as of August 31, 2024 and February 29, 2024 (in thousands):
| Balance Sheet Classification |  | As of
|  | August 31, 2024 |  | February 29, 2024
Assets |  |  |  |  |
Operating right-of-use assets | Right-of-use assets |  | $ | 17,194 |  |  | $ | 19,808 |
Finance right-of-use assets | Right-of-use assets |  | 4,859 |  |  | 3,931 |
Liabilities |  |  |  |  |
Operating lease liabilities ― short-term | Lease liability - short-term |  | $ | 5,579 |  |  | $ | 5,893 |
Operating lease liabilities ― long-term | Lease liability - long-term |  | 12,284 |  |  | 14,606 |
Finance lease liabilities ― short-term | Lease liability - short-term |  | 995 |  |  | 766 |
Finance lease liabilities ― long-term | Lease liability - long-term |  | 3,979 |  |  | 3,221 |
Supplemental information related to AZZ's leases was as follows (in thousands, except years and percentages):
| Three Months Ended August 31, |  | Six Months Ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating cash flows from operating leases included in lease liabilities | $ | 1,794 |  |  | $ | 1,834 |  |  | $ | 3,561 |  |  | $ | 3,654 |
Lease liabilities obtained from new ROU assets - operating | 410 |  |  | 373 |  |  | 628 |  |  | 1,895 |
Decrease in ROU assets related to lease terminations | — |  |  | (1,294) |  |  | — |  |  | (1,302) |
Financing cash flows from finance leases included in lease liabilities | 236 |  |  | 92 |  |  | 432 |  |  | 162 |
Operating cash flows from finance leases included in lease liabilities | 83 |  |  | 21 |  |  | 151 |  |  | 37 |
Lease liabilities obtained from new ROU assets - finance leases | 1,009 |  |  | 599 |  |  | 1,419 |  |  | 599 |
| As of
| August 31, 2024 |  | February 29, 2024
Weighted-average remaining lease term - operating leases | 3.8 years |  | 4.12 years
Weighted-average discount rate - operating leases | 4.62 | % |  | 4.49 | %
Weighted-average remaining lease term - finance leases | 4.84 years |  | 5.21 years
Weighted-average discount rate - finance leases | 7.08 | % |  | 6.70 | %
The following table outlines the classification of lease expense related to operating and finance leases in the statements of operations (in thousands):
| Three Months Ended August 31, |  | Six Months Ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease expense: |  |  |  |  |  |  |
Cost of sales | $ | 3,026 |  |  | $ | 3,035 |  |  | $ | 6,029 |  |  | $ | 6,060 |
Selling, general and administrative | 488 |  |  | 506 |  |  | 977 |  |  | 1,005 |
Total operating lease expense | 3,514 |  |  | 3,541 |  |  | $ | 7,006 |  |  | $ | 7,065 |
Financing lease expense: |  |  |  |  |  |  |
Cost of sales | 269 |  |  | 101 |  |  | 492 |  |  | 177 |
Interest expense | 83 |  |  | 21 |  |  | 151 |  |  | 37 |
Total financing lease expense | 352 |  |  | 122 |  |  | 643 |  |  | 214 |
Total lease expense | $ | 3,866 |  |  | $ | 3,663 |  |  | $ | 7,649 |  |  | $ | 7,279 |
Sublease income for the three and six months ended August 31, 2024 and 2023 was as follows (in thousands):
| Three Months Ended August 31, |  | Six Months Ended August 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Sublease income | $ | 254 |  |  | $ | 248 |  |  | $ | 509 |  |  | $ | 488 |
Lessee, Operating Lease, Liability, Maturity | As of August 31, 2024, maturities of our lease liabilities were as follows (in thousands):
Fiscal year: | Operating Leases |  | Finance Leases |  | Total
2025 | $ | 3,259 |  |  | $ | 665 |  |  | $ | 3,924 |
2026 | 5,912 |  |  | 1,263 |  |  | 7,175 |
2027 | 4,598 |  |  | 1,224 |  |  | 5,822 |
2028 | 2,542 |  |  | 1,137 |  |  | 3,679 |
2029 | 1,918 |  |  | 920 |  |  | 2,838 |
2030 | 462 |  |  | 499 |  |  | 961 |
Thereafter | 796 |  |  | 170 |  |  | 966 |
Total lease payments | $ | 19,487 |  |  | $ | 5,878 |  |  | $ | 25,365 |
Less imputed interest | (1,624) |  |  | (904) |  |  | (2,528) |
Total | $ | 17,863 |  |  | $ | 4,974 |  |  | $ | 22,837 |
Finance Lease, Liability, Maturity | As of August 31, 2024, maturities of our lease liabilities were as follows (in thousands):
Fiscal year: | Operating Leases |  | Finance Leases |  | Total
2025 | $ | 3,259 |  |  | $ | 665 |  |  | $ | 3,924 |
2026 | 5,912 |  |  | 1,263 |  |  | 7,175 |
2027 | 4,598 |  |  | 1,224 |  |  | 5,822 |
2028 | 2,542 |  |  | 1,137 |  |  | 3,679 |
2029 | 1,918 |  |  | 920 |  |  | 2,838 |
2030 | 462 |  |  | 499 |  |  | 961 |
Thereafter | 796 |  |  | 170 |  |  | 966 |
Total lease payments | $ | 19,487 |  |  | $ | 5,878 |  |  | $ | 25,365 |
Less imputed interest | (1,624) |  |  | (904) |  |  | (2,528) |
Total | $ | 17,863 |  |  | $ | 4,974 |  |  | $ | 22,837 |

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- Definition Tabular disclosure of undiscounted cash flows of finance lease liability. Includes, but is not limited to, reconciliation of undiscounted cash flows to finance lease liability recognized in statement of financial position. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org//1943274/2147478964/842-20-50-6 + Details
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- Definition Tabular disclosure of lessee's lease cost. Includes, but is not limited to, interest expense for finance lease, amortization of right-of-use asset for finance lease, operating lease cost, short-term lease cost, variable lease cost and sublease income. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Publisher FASB -URI https://asc.fasb.org//1943274/2147478964/842-20-50-4 + Details
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- Definition Tabular disclosure of undiscounted cash flows of lessee's operating lease liability. Includes, but is not limited to, reconciliation of undiscounted cash flows to operating lease liability recognized in statement of financial position. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org//1943274/2147478964/842-20-50-6 + Details
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