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Leases | 3 Months Ended
--- | ---
May 31, 2026
Leases [Abstract] |
Leases | 12. Leases We are a lessee under various leases for facilities and equipment. As of May 31, 2026, we were the lessee for 161 operating leases and 158 finance leases with terms of 12 months or more. These leases are reflected in "Right-of-use assets," "Lease liability—short-term" and "Lease liability—long-term" in our consolidated balance sheets. Our leases are primarily for (i) operating facilities, (ii) vehicles and equipment used in operations, (iii) facilities used for back-office functions, (iv) equipment used for back-office functions, and (v) temporary storage. The majority of our vehicle and equipment leases 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 we recognize lease expense for these leases on a straight-line basis over the lease term. We have a significant number of short-term leases, including month-to-month agreements. Our short-term lease agreements include expenses incurred hourly, daily, monthly and for other durations of time of one year or less. Our future lease commitments as of May 31, 2026, do not reflect all of our short-term lease commitments. The following table outlines the classification of right-of-use ("ROU") assets and lease liabilities in the consolidated balance sheets as of May 31, 2026 and February 28, 2026 (in thousands):
|  |  | As of
|  |  | May 31, 2026 |  | February 28, 2026
Assets | Balance Sheet Classification |  |  |  |
Operating right-of-use assets | Right-of-use assets |  | $ | 46,190 |  |  | $ | 46,261 |
Finance right-of-use assets | Right-of-use assets |  | $ | 14,734 |  |  | $ | 13,303 |
Liabilities |  |  |  |  |
Operating lease liabilities―short-term | Lease liability—short-term |  | $ | 5,771 |  |  | $ | 5,413 |
Operating lease liabilities―long-term | Lease liability—long-term |  | $ | 41,185 |  |  | $ | 41,489 |
Finance lease liabilities―short-term | Lease liability—short-term |  | $ | 3,731 |  |  | $ | 3,266 |
Finance lease liabilities―long-term | Lease liability—long-term |  | $ | 11,526 |  |  | $ | 10,480 |
Supplemental information related to our leases was as follows (in thousands, except years and percentages):
| Three Months Ended May 31, |  |
| 2026 |  | 2025 |  |  |  |
Operating cash flows from operating leases included in lease liabilities | $ | 2,006 |  |  | $ | 1,881 |  |  |  |  |
Lease liabilities obtained from new ROU assets—operating leases | $ | 1,376 |  |  | $ | 16 |  |  |  |  |
Decrease in ROU assets related to lease terminations | $ | — |  |  | $ | (467) |  |  |  |  |
Operating cash flows from finance leases included in lease liabilities | $ | 239 |  |  | $ | 142 |  |  |  |  |
Financing cash flows from finance leases included in lease liabilities | $ | 872 |  |  | $ | 434 |  |  |  |  |
Lease liabilities obtained from new ROU assets—finance leases | $ | 2,392 |  |  | $ | 4,127 |  |  |  |  |
| As of
| May 31, 2026 |  | February 28, 2026
Weighted-average remaining lease term—operating leases | 14.46 years |  | 14.71 years
Weighted-average discount rate—operating leases | 6.11 | % |  | 6.10 | %
Weighted-average remaining lease term—finance leases | 3.93 years |  | 4.01 years
Weighted-average discount rate—finance leases | 6.47 | % |  | 6.59 | %
The following table outlines our lease expense in the consolidated statements of operations as of May 31, 2026 and May 31, 2025 (in thousands):
| Three Months Ended May 31, |  |
| 2026 |  | 2025 |  |  |  |
Operating lease expense: |  |  |  |  |  |  |
Cost of sales | $ | 1,886 |  |  | $ | 1,829 |  |  |  |  |
Selling, general and administrative | 500 |  |  | 508 |  |  |  |  |
Total operating lease expense | 2,386 |  |  | 2,337 |  |  |  |  |
Financing lease expense: |  |  |  |  |  |  |
Cost of sales | 952 |  |  | 487 |  |  |  |  |
Interest expense | 239 |  |  | 142 |  |  |  |  |
Total financing lease expense | 1,191 |  |  | 629 |  |  |  |  |
Variable lease expense: |  |  |  |  |  |  |
Cost of sales | 258 |  |  | 249 |  |  |  |  |
Total variable lease expense | 258 |  |  | 249 |  |  |  |  |
Short-term lease expense: |  |  |  |  |  |  |
Cost of sales | 1,906 |  |  | 1,802 |  |  |  |  |
Selling, general and administrative | 35 |  |  | 5 |  |  |  |  |
Total short-term lease expense | 1,941 |  |  | 1,807 |  |  |  |  |
Total lease expense | $ | 5,776 |  |  | $ | 5,022 |  |  |  |  |
As of May 31, 2026, maturities of our lease liabilities were as follows (in thousands):
Fiscal year: | Operating Leases |  | Finance Leases |  | Total
2027 | $ | 6,408 |  |  | $ | 3,450 |  |  | $ | 9,858 |
2028 | 7,584 |  |  | 4,508 |  |  | 12,092 |
2029 | 6,784 |  |  | 4,275 |  |  | 11,059 |
2030 | 4,724 |  |  | 3,574 |  |  | 8,298 |
2031 | 3,820 |  |  | 1,312 |  |  | 5,132 |
2032 | 3,095 |  |  | 58 |  |  | 3,153 |
Thereafter | 41,623 |  |  | 37 |  |  | 41,660 |
Total lease payments | 74,038 |  |  | 17,214 |  |  | 91,252 |
Less imputed interest | (27,082) |  |  | (1,957) |  |  | (29,039) |
Total | $ | 46,956 |  |  | $ | 15,257 |  |  | $ | 62,213 |
We sublease 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 as a reduction to "Cost of sales." Sublease income for the three months ended May 31, 2026 and 2025 was as follows (in thousands):
| Three Months Ended May 31, |  |
| 2026 |  | 2025 |  |  |  |
Sublease income | $ | 216 |  |  | $ | 266 |  |  |  |  |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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