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Operating Segments | 6 Months Ended
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Aug. 31, 2025
Segment Reporting [Abstract] |
Operating Segments | 7. 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. The CODM uses net income as the primary measure to evaluate performance and allocate resources to the AZZ Infrastructure Solutions segment. The CODM assesses these metrics and compares actuals to budgeted and forecasted values to evaluate segment operating performance and allocate resources to the operating segments. 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. See Note 8 for a description of AVAIL's sale of its Electrical Products Group. The following tables contain operating segment data for the three and six months ended August 31, 2025 and 2024 by segment, for the Company's corporate operations and on a consolidated basis (in thousands):
| Three Months Ended August 31, 2025
| Metal Coatings |  | Precoat Metals |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 189,984 |  |  | $ | 227,291 |  |  | $ | — |  |  | $ | — |  |  | $ | 417,275 |
Cost of sales | 132,923 |  |  | 183,060 |  |  | — |  |  | — |  |  | 315,983 |
Gross margin | 57,061 |  |  | 44,231 |  |  | — |  |  | — |  |  | 101,292 |
Selling, general and administrative | 5,355 |  |  | 7,710 |  |  | 26 |  |  | 19,740 |  |  | 32,831 |
Operating income (loss) | 51,706 |  |  | 36,521 |  |  | (26) |  |  | (19,740) |  |  | 68,461 |
Interest expense | — |  |  | — |  |  | — |  |  | (13,665) |  |  | (13,665) |
Equity in earnings of unconsolidated subsidiaries(5) | — |  |  | — |  |  | 59,345 |  |  | — |  |  | 59,345 |
Other income | 2 |  |  | — |  |  | — |  |  | 186 |  |  | 188 |
Income (loss) before income tax | $ | 51,708 |  |  | $ | 36,521 |  |  | $ | 59,319 |  |  | (33,219) |  |  | 114,329 |
Income tax expense |  |  |  |  |  |  | 24,983 |  |  | 24,983 |
Net income (loss) |  |  |  |  |  |  | $ | (58,202) |  |  | $ | 89,346 |
Depreciation and amortization | $ | 6,830 |  |  | $ | 9,424 |  |  | $ | — |  |  | $ | 6,118 |  |  | $ | 22,372 |
See notes below tables.
| Six Months Ended August 31, 2025
| Metal Coatings |  | Precoat Metals |  | Infrastructure Solutions(1) |  | Corporate(2) |  | Total
Sales | $ | 377,199 |  |  | $ | 462,038 |  |  | $ | — |  |  | $ | — |  |  | $ | 839,237 |
Cost of sales(3) | 263,279 |  |  | 370,536 |  |  | — |  |  | — |  |  | 633,815 |
Gross margin | 113,920 |  |  | 91,502 |  |  | — |  |  | — |  |  | 205,422 |
Selling, general and administrative(4) | 11,482 |  |  | 15,627 |  |  | 106 |  |  | 40,197 |  |  | 67,412 |
Operating income (loss) | 102,438 |  |  | 75,875 |  |  | (106) |  |  | (40,197) |  |  | 138,010 |
Interest expense | — |  |  | — |  |  | — |  |  | (32,228) |  |  | (32,228) |
Equity in earnings of unconsolidated subsidiaries(5) | — |  |  | — |  |  | 232,868 |  |  | — |  |  | 232,868 |
Other income (expense) | (60) |  |  | — |  |  | — |  |  | 1,575 |  |  | 1,515 |
Income (loss) before income tax | $ | 102,378 |  |  | $ | 75,875 |  |  | $ | 232,762 |  |  | (70,850) |  |  | 340,165 |
Income tax expense |  |  |  |  |  |  | 79,911 |  |  | 79,911 |
Net income (loss) |  |  |  |  |  |  | $ | (150,761) |  |  | $ | 260,254 |
Depreciation and amortization | $ | 13,490 |  |  | $ | 18,546 |  |  | $ | — |  |  | $ | 12,163 |  |  | $ | 44,199 |
See notes below tables.
| 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 income (expense) | (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 |
Depreciation and amortization | $ | 6,685 |  |  | $ | 7,639 |  |  | $ | — |  |  | $ | 6,105 |  |  | $ | 20,429 |
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 |
Depreciation and amortization | $ | 13,341 |  |  | $ | 15,232 |  |  | $ | — |  |  | $ | 12,177 |  |  | $ | 40,750 |
(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. See Note 19 for further discussion of the receivables and liabilities.
(2) | Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments.
(3) | Metal Coatings segment includes restructuring charges of $3.8 million. See Note 18.
(4) | Includes stock-based compensation expense of $2.2 million, of which $0.4 million and $1.8 million are included in Metal Coatings and Corporate, respectively. See Note 16.
(5) | During the first quarter of fiscal 2026, AVAIL completed the sale of the Electrical Products Group ("EPG") to nVent Electric plc. The three and six months ended August 31, 2025 include $61.6 million and $227.5 million, respectively, which represents the gain related to the sale of the EPG, partially offset by an impairment loss on the AVAIL JV and an adjustment related to a change in AVAIL's transfer pricing policy. See Note 8.
Asset balances by operating segment were as follows (in thousands):
| As of
Assets: | August 31, 2025 |  | February 28, 2025
Metal Coatings | $ | 597,430 |  |  | $ | 555,095 |
Precoat Metals | 1,548,718 |  |  | 1,548,377 |
Infrastructure Solutions - Investment in Joint Venture(1) | 60,219 |  |  | 99,379 |
Corporate | 19,616 |  |  | 24,250 |
Total assets | $ | 2,225,983 |  |  | $ | 2,227,101 |
(1) See Note 8 for information regarding the Investment in AVAIL joint venture. 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% or more of consolidated sales.
| Three Months Ended August 31, |  | Six Months Ended August 31,
Sales: | 2025 |  | 2024 |  | 2025 |  | 2024
United States | $ | 404,398 |  |  | $ | 398,658 |  |  | $ | 815,393 |  |  | $ | 801,709 |
Canada | 12,877 |  |  | 10,349 |  |  | 23,844 |  |  | 20,506 |
Total sales | $ | 417,275 |  |  | $ | 409,007 |  |  | $ | 839,237 |  |  | $ | 822,215 |
| As of
| August 31, 2025 |  | February 28, 2025
Property, plant and equipment, net: |  |  |
United States | $ | 583,876 |  |  | $ | 574,332 |
Canada | 19,384 |  |  | 18,609 |
Total property, plant and equipment, net | $ | 603,260 |  |  | $ | 592,941 |

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