10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12777

AZZ Inc.

(Exact name of registrant as specified in its charter)

TEXAS	75-0948250
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Museum Place, Suite 500
3100 West 7th Street
Fort Worth, Texas	76107
(Address of principal executive offices)	(Zip Code)

(817) 810-0095

Registrant’s telephone number, including area code:

NONE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 

Title of each class:	Outstanding at November 30, 2016:
Common Stock, $1.00 par value per share	25,953,941

AZZ Inc.

INDEX

		PAGE NO.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Financial Statements
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statement of Shareholders’ Equity	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4.	Controls and Procedures.	20
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings.	21
Item 1A.	Risk Factors.	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	21
Item 3.	Defaults Upon Senior Securities.	21
Item 4.	Mine Safety Disclosures.	21
Item 5.	Other Information.	21
Item 6.	Exhibits.	21
	SIGNATURES	22
	EXHIBIT INDEX	23

PART I. FINANCIAL INFORMATION

Item 1.         Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

	11/30/2016			2/29/2016
	(In thousands, except per share data)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	13,479		$	40,191
Accounts receivable (net of allowance for doubtful accounts of $349 as of November 30, 2016 and $264 as of February 29, 2016)	167,039			131,416
Inventories:
Raw material	77,126			66,548
Work-in-process	48,196			28,539
Finished goods	496			7,048
Costs and estimated earnings in excess of billings on uncompleted contracts	26,059			32,287
Deferred income taxes	223			200
Prepaid expenses and other	4,666			3,105
Total current assets	337,284			309,334
Property, plant and equipment, net	224,092			226,333
Goodwill	305,411			292,527
Intangibles and other assets, net	150,888			153,816
	$	1,017,675		$	982,010
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	55,910		$	46,748
Income tax payable	4,290			2,697
Accrued salaries and wages	21,842			30,473
Other accrued liabilities	24,456			20,406
Customer advance payments	19,351			15,652
Billings in excess of costs and estimated earnings on uncompleted contracts	11,718			9,237
Debt due within one year	18,973			23,192
Total current liabilities	156,540			148,405
Debt due after one year, net	292,181			302,429
Deferred income taxes	49,650			49,960
Total liabilities	498,371			500,794
Commitments and contingencies
Shareholders’ equity:
Common stock, $1 par, shares authorized 100,000; 26,054 shares issued and 25,954 oustanding at November 30, 2016 and 25,874 shares issued and oustanding at February 29, 2016	26,054			25,874
Capital in excess of par value	41,493			35,148
Retained earnings	487,875			450,754
Accumulated other comprehensive loss	(30,836		)	(30,560		)
Less - 100 common shares held in treasury at cost	(5,282		)	—
Total shareholders’ equity	519,304			481,216
	$	1,017,675		$	982,010

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended						Nine Months Ended
	11/30/2016			11/30/2015			11/30/2016			11/30/2015
	(In thousands, except per share data)
	(Unaudited)
Net sales	$	227,459		$	242,447		$	665,171		$	685,581
Cost of sales	173,593			179,999			506,091			510,324
Gross margin	53,866			62,448			159,080			175,257
Selling, general and administrative	25,082			26,040			80,898			79,545
Operating income	28,784			36,408			78,182			95,712
Interest expense	3,654			3,743			11,159			11,612
Net (gain) loss on sale of property, plant and equipment and insurance proceeds	(57		)	(16		)	26			(465		)
Other (income) expense - net	(759		)	(27		)	(949		)	828
Income before income taxes	25,946			32,708			67,946			83,737
Income tax expense	7,695			9,161			18,609			23,023
Net income	$	18,251		$	23,547		$	49,337		$	60,714
Earnings per common share
Basic earnings per share	$	0.70		$	0.91		$	1.90		$	2.35
Diluted earnings per share	$	0.70		$	0.91		$	1.89		$	2.34

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended						Nine Months Ended
	11/30/2016			11/30/2015			11/30/2016			11/30/2015
	(In thousands)
	(Unaudited)
Net income	$	18,251		$	23,547		$	49,337		$	60,714
Other comprehensive loss:
Foreign currency translation adjustments
Unrealized translation losses	(2,918		)	(1,492		)	(235		)	(6,652		)
Interest rate swap, net of income tax of $7, $7, $22, and $22, respectively.	(14		)	(14		)	(41		)	(41		)
Other comprehensive loss	(2,932		)	(1,506		)	(276		)	(6,693		)
Comprehensive income	$	15,319		$	22,041		$	49,061		$	54,021

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	11/30/2016			11/30/2015
	(In thousands)
	(Unaudited)
Cash Flows From Operating Activities:
Net income	$	49,337		$	60,714
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (recovery) for doubtful accounts	18			(1,045		)
Amortization and depreciation	37,964			35,077
Deferred income taxes	(331		)	(32		)
Net loss on disposition of property, plant & equipment due to realignment	6,602			464
Net (gain) loss on sale of property, plant & equipment and insurance proceeds	26			(465		)
Amortization of deferred borrowing costs	952			1,015
Share-based compensation expense	4,408			3,493
Effects of changes in assets & liabilities:
Accounts receivable	(33,706		)	(3,209		)
Inventories	(20,760		)	(7,872		)
Prepaid expenses and other	(1,554		)	(935		)
Other assets	(2,451		)	(420		)
Net change in billings related to costs and estimated earnings on uncompleted contracts	8,853			(3,056		)
Accounts payable	7,588			15,835
Other accrued liabilities and income taxes payable	329			4,594
Net cash provided by operating activities	57,275			104,158
Cash Flows From Investing Activities:
Proceeds from sale or insurance settlement of property, plant, and equipment	543			1,111
Purchase of property, plant and equipment	(29,135		)	(32,161		)
Acquisition of subsidiaries, net of cash acquired	(22,679		)	(49,818		)
Net cash used in investing activities	(51,271		)	(80,868		)
Cash Flows From Financing Activities:
Excess tax benefits from share-based compensation	—			496
Proceeds from revolving loan	150,000			112,481
Payments on revolving loan	(144,000		)	(108,561		)
Payments on long term debt	(20,848		)	(19,911		)
Purchases of treasury shares	(5,282		)	—
Payments of dividends	(12,216		)	(11,606		)
Net cash used in financing activities	(32,346		)	(27,101		)
Effect of exchange rate changes on cash	(370		)	(1,118		)
Net decrease in cash & cash equivalents	(26,712		)	(4,929		)
Cash & cash equivalents at beginning of period	40,191			22,527
Cash & cash equivalents at end of period	$	13,479		$	17,598
Supplemental disclosures
Cash paid for interest	$	9,291		$	9,942
Cash paid for income taxes	$	17,768		$	15,638

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands)

(unaudited)

	Common Stock			Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total
	Shares	Amount
Balance at February 29, 2016	25,874	$	25,874	$	35,148		$	450,754		$	(30,560	)	$	—		$	481,216
Stock compensation	13	13		4,395			—			—			—			4,408
Restricted stock units	25	25		(598		)	—			—			—			(573		)
Stock issued for SARs	71	71		(295		)	—			—			—			(224		)
Employee stock purchase plan	71	71		2,843			—			—			—			2,914
Purchase of treasury shares	—	—		—			—			—			(5,282		)	(5,282		)
Cash dividends paid	—	—		—			(12,216		)	—			—			(12,216		)
Net income	—	—		—			49,337			—			—			49,337
Foreign currency translation	—	—		—			—			(235		)	—			(235		)
Interest rate swap, net of $22 income tax	—	—		—			—			(41		)	—			(41		)
Balance at November 30, 2016	26,054	$	26,054	$	41,493		$	487,875		$	(30,836	)	$	(5,282	)	$	519,304

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

AZZ Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. The Company and Basis of Presentation

AZZ Inc. (“AZZ”, the “Company”, "our" or “we”) was established in 1956 and incorporated under the laws of the State of Texas. We are a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. We have two distinct operating segments: the Energy Segment and Galvanizing Segment. AZZ Galvanizing is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.

Presentation

The accompanying condensed consolidated balance sheet as of February 29, 2016, which was derived from audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 29, 2016, included in the Company’s Annual Report on Form 10-K covering such period. 

Our fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ended February 28, 2017 is referred to as fiscal 2017.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial position of the Company as of November 30, 2016, the results of its operations for the three and nine months ended November 30, 2016 and 2015, and cash flows for the nine months ended November 30, 2016 and 2015. These interim results are not necessarily indicative of results for a full year.

Accounting Standards Recently Adopted

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendment in this ASU affects all organizations that issue share-based payment awards to employees and is intended to simplify several aspects of the accounting for these awards, including income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and allowing an accounting policy election to account for forfeitures as they occur. As permitted by ASU 2016-09, the Company elected to early adopt ASU 2016-09 in the quarter ended August 31, 2016 with an effective date of March 1, 2016. As a result of the adoption, a tax benefit of $1.3 million was recorded in the quarter ended August 31, 2016. The tax benefit was driven primarily by the exercise, during the first six months of fiscal 2017, of share-based awards issued prior to FY2014. The adoption was on a prospective basis and therefore had no impact on prior years.

In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Previously, debt issuance costs were recognized as deferred charges and recorded as other assets. In August 2015, the FASB issued ASU 2015-15, "Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements." ASU 2015-15 allows an entity to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted and is to be implemented retrospectively.

Effective March 1, 2016, we adopted these standards which required the retroactive application and represented a change in accounting principle. The unamortized debt issuance costs of approximately $1.4 million associated with a portion of

8

our outstanding debt , which were previously presented as a component of intangibles and other assets on the consolidated balance sheets, are reflected as a reduction to the carrying liability of our outstanding debt. Debt issuance costs associated with our revolving line of credit remain classified in intangibles and other assets and continue to be charged to interest expense over the term of the agreement. As a result of this change in accounting principal, the consolidated balance sheet as of February 29, 2016 was adjusted as follows:

	February 29, 2016
	Previously Reported		Effect of Adoption of Accounting Principle			As Adjusted
	(in thousands)
Assets:
Intangibles and other assets	$	155,177	$	(1,361	)	$	153,816
Total assets	$	983,371	$	(1,361	)	$	982,010
Liabilities:
Debt due after one year	$	303,790	$	(1,361	)	$	302,429
Total liabilities	$	502,155	$	(1,361	)	$	500,794

New Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires a lessee to recognize a liability to make lease payments and a right-of-use asset representing a right to use the underlying asset for the lease term on the balance sheet. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", issued as a new Topic, Accounting Standards Codification (ASC) Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On April 1, 2015, the FASB decided to defer the effective date of the new revenue standard by one year. As a result, public entities would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. This standard will be effective for the Company beginning in fiscal 2019. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements or decided upon the method of adoption.

2. Earnings Per Share

Earnings per share is based on the weighted average number of shares outstanding during each period, adjusted for the dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share:

9

	Three Months ended November 30,				Nine Months Ended November 30,
	2016		2015		2016		2015
	(Unaudited) (In thousands except per share data)
Numerator:
Net income for basic and diluted earnings per common share	$	18,251	$	23,547	$	49,337	$	60,714
Denominator:
Denominator for basic earnings per common share–weighted average shares	26,005		25,823		25,974		25,787
Effect of dilutive securities:
Employee and director stock awards	128		154		130		133
Denominator for diluted earnings per common share	26,133		25,977		26,104		25,920
Earnings per share basic and diluted:
Basic earnings per common share	$	0.70	$	0.91	$	1.90	$	2.35
Diluted earnings per common share	$	0.70	$	0.91	$	1.89	$	2.34

3. Share-based Compensation

The Company has one share-based compensation plan, the 2014 Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the growth and prosperity of the Company by permitting the Company to grant to its employees, directors and advisors various types of restricted stock unit awards, performance share units, stock options, and stock appreciation rights to purchase common stock of the Company. The maximum number of shares that may be issued under the Plan is 1,500,000 shares. As of November 30, 2016 the Company has approximately 1,280,249 shares available for future issuance under the Plan.

Restricted Stock Unit Awards

Restricted stock unit awards are valued at the market price of our common stock on the grant date. Awards issued prior to fiscal 2015 generally have a three year cliff vesting schedule and awards issued subsequent to fiscal 2015 generally vest ratably over a period of three years but these awards may vest early in accordance with the Plan’s accelerated vesting provisions.

The activity of our non-vested restricted stock unit awards for the nine month period endedNovember 30, 2016 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	98,693		$	45.03
Granted	73,585		56.65
Vested	(35,324	)	45.70
Forfeited	—		—
Non-Vested Balance as of November 30, 2016	136,954		$	51.10

Performance Share Unit Awards

Performance share unit awards are valued at the market price of our common stock on the grant date. These awards have a three year performance cycle and will vest and become payable, if at all, on the third anniversary of the award date. The awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods. In addition, a multiplier may be applied to the total awards granted which is based on the Company’s total shareholder return during such three year period in comparison to a defined specific industry peer group as set forth in the plan.The activity of our non-vested performance share unit awards for the nine month period endedNovember 30, 2016 is as follows:

10

	Performance Stock Units	Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	27,415	$	46.65
Granted	24,011	57.47
Vested	—	—
Forfeited	—	—
Non-Vested Balance as of November 30, 2016	51,426	$	51.70

Stock Appreciation Rights

Stock appreciation rights are granted with an exercise price equal to the market value of our common stock on the date of grant. These awards generally have a contractual term of 7 years and vest ratably over a period of three years although some may vest immediately on issuance. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company’s stock appreciation rights activity for the nine month period endedNovember 30, 2016 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 29, 2016	312,748		$	34.23
Granted	—		—
Exercised	(128,427	)	25.71
Forfeited	—		—
Outstanding as of November 30, 2016	184,321		$	40.16
Exercisable as of November 30, 2016	143,371		$	39.00

The average remaining contractual term for those stock appreciation rights outstanding at November 30, 2016 is 3.52 years, with an aggregate intrinsic value of $4.6 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of November 30, 2016 is 3.33 years, with an aggregate intrinsic value of $3.7 million.

Employee Stock Purchase Plan

The Company also has an employee stock purchase plan, which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of 24 months (the "offering period"). On the first day of an offering period (the “enrollment date”) the participant is granted the option to purchase shares on each exercise date at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. The participant’s right to purchase common stock under the plan is restricted to no more than $25,000 per calendar year and the participant may not purchase more than 5,000 shares during any offering period. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period. The fair value of the estimated number of shares to be issued under each offering is determined using the Black-Scholes option pricing model. For the nine month period endedNovember 30, 2016, the Company issued 70,937 shares under the Employee Stock Purchase Plan.

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows:

Nine months ended November 30,	2016		2015
	(In thousands)
	(Unaudited)
Compensation Expense	$	4,408	$	3,493
Income tax benefits	$	1,411	$	1,223

Unrecognized compensation cost related to restricted stock units, performance share unit awards, stock appreciation rights, and the employee stock purchase plan at November 30, 2016 totals $8.0 million.

The Company’s policy is to issue shares required under these plans from the Company’s treasury shares or from the Company’s authorized but unissued shares. As of November 30, 2016, the Company has repurchased 100,000 shares at an

11

average price of $52.82 per share under the Company's share repurchase program. For more information on the Company's requirements for the share repurchase program, see Part II, Item 2.

4. Segments

Information regarding operations and assets by segment was as follows:

	Three Months Ended November 30,						Nine Months Ended November 30,
	2016			2015			2016			2015
	(Unaudited) (In thousands)
Net Sales:
Energy	$	135,553		$	136,007		$	371,256		$	383,787
Galvanizing	91,906			106,440			293,915			301,794
Total net sales	227,459			242,447			665,171			685,581
Operating Income:
Energy	15,434			18,846			42,383			45,807
Galvanizing	21,345			24,264			60,679			71,689
Corporate	(7,995		)	(6,702		)	(24,880		)	(21,784		)
Total operating income	28,784			36,408			78,182			95,712
Interest expense	3,654			3,743			11,159			11,612
Net (gain) loss on sale of property, plant and equipment and insurance proceeds	(57		)	(16		)	26			(465		)
Other (income) expense, net	(759		)	(27		)	(949		)	828
Income before income taxes	$	25,946		$	32,708		$	67,946		$	83,737
Total Assets:
Energy	$	577,328		$	539,193		$	577,328		$	539,193
Galvanizing	421,991			432,297			421,991			432,297
Corporate	18,356			19,462			18,356			19,462
	$	1,017,675		$	990,952		$	1,017,675		$	990,952

Financial Information About Geographical Areas

Below is a breakdown of selected financial information by geographical area:

	Three Months Ended November 30,					Nine Months Ended November 30,
	2016		2015			2016			2015
	(Unaudited) (In thousands)
Net Sales:
U.S.	$	191,526	$	197,372		$	537,084		$	543,306
International	35,933		45,424			128,243			142,970
Eliminations	—		(349		)	(156		)	(695		)
Total Net Sales	$	227,459	$	242,447		$	665,171		$	685,581

12

	November 30, 2016		February 29, 2016
	(In thousands)
	(Unaudited)
Property, Plant and Equipment, Net:
U.S.	$	200,943	$	204,587
Canada	17,774		17,868
Other Countries	5,375		3,878
Total Property, Plant and Equipment, Net	$	224,092	$	226,333

5. Warranty Reserves

A reserve has been established to provide for the estimated future cost of warranties on a portion of the Company’s delivered products and is classified within accrued liabilities on the consolidated balance sheet. Management periodically reviews the reserves and makes adjustments accordingly. Warranties cover such factors as non-conformance to specifications and defects in material and workmanship. The following table shows changes in the warranty reserves since the end of fiscal 2016:

	Warranty Reserve
	(unaudited)
	(in thousands)
Balance at February 29, 2016	$	2,915
Warranty costs incurred	(1,465		)
Additions charged to income	1,246
Balance at November 30, 2016	$	2,696

6. Debt

Our debt consisted of the following:

	As of
	November 30, 2016			February 29, 2016
	(In thousands)
	(Unaudited)
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	28,571			42,857
Term Note, due in quarterly installments beginning in June 2013 through March 2018	51,563			58,125
Revolving line of credit with bank	107,000			101,000
Total debt	312,134			326,982
Unamortized debt issuance costs for Senior Notes and Term Note	(980		)	(1,361		)
Total debt, net	311,154			325,621
Less amount due within one year	(18,973		)	(23,192		)
Debt due after one year, net	$	292,181		$	302,429

13

7. Realignment Costs

As part of its ongoing efforts to optimize cost and effectiveness, during the second quarter of fiscal 2017, the Company undertook a review of its operations in order to optimize financial performance of its operating assets. As a result, the Company recognized $8.0 million of realignment charges in the second quarter of fiscal 2017. A total of $6.7 million was included in Cost of Sales for the disposition and write off of certain fixed assets within the Galvanizing Segment, including the cost of closing two plants, the write off of certain assets related to the conversion of a third plant from a standard galvanizing plant to a galvanized rebar plant, and the cost of writing off certain other functionally obsolete assets across other galvanizing plants during the second quarter. We also reserved $1.3 million in Selling, General and Administrative Expense for realignment costs related to one-time employee severance associated with changes needed to improve management efficiency in the Energy and Galvanizing Segments.

The following table shows changes in the realignment accrual for the nine months ended November 30, 2016:

	Realignment Accrual
	(unaudited)
	(in thousands)
Realignment reserve balance as of February 29, 2016	$	61
Additions to reserve	1,260
Realignment costs utilized	(890		)
Realignment reserve balance as of November 30, 2016	$	431

8. Acquisitions and Divestitures

On March 1, 2016, we completed an acquisition of the equity securities of Power Electronics, Inc. ("PEI"), a Millington, Maryland-based manufacturer and integrator of electrical enclosure systems. The acquisition of PEI will enhance our capacity to serve existing and new customers in a diverse set of industries along the Eastern seaboard of the United States.

Unaudited pro forma results of operations assuming the PEI acquisition had taken place at the beginning of each period are not provided because the historical operating results of PEI were not significant and pro forma results would not be significantly different from reported results for the periods presented.

On October 3, 2016, AZZ entered into an agreement to divest its indirectly held subsidiary, Nuclear Logistics LLC (“NL”) to Westinghouse Electric Company, LLC (“Westinghouse”) in exchange for cash. Terms of the transaction were not disclosed, and are subject to customary terms and conditions. As of November 30, 2016 and through the date of this report, negotiations for the divestiture were still underway and a close date could not be determined. In addition, management has the intention to withdraw the plan to divest NLI if the current transaction is not completed, and to continue current operations. As a result of the ongoing negotiations between AZZ and Westinghouse and management's overall plan for the subsidiary, the Company determined it had not met the criteria set forth under ASC 360-10-45-9, initial criteria for classification as held for sale, as of November 30, 2016, therefore a reclassification on the balance sheet was not made.

9. Subsequent Events

None.

14

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. In addition, certain factors could affect the outcome of the matters described herein. This Quarterly Report on Form 10-Q may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand and response to products and services offered by AZZ, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the hot dip galvanizing markets; prices and raw material cost, including zinc and natural gas which are used in the hot dip galvanizing process; changes in the political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer requested delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management and employees to implement AZZ’s continued growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; the continuing economic volatility in the U.S. and other markets in which we operate; acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business in AZZ’s Annual Report on Form 10-K for the fiscal year ended February 29, 2016 and other filings with the SEC, available for viewing on AZZ’s website at www.azz.com and on the SEC’s website at www.sec.gov.

You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

The following discussion should be read in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K for the fiscal year ended February 29, 2016, and with the condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

RESULTS OF OPERATIONS

We have two distinct operating segments, the Energy Segment and the Galvanizing Segment, as defined in our Annual Report on Form 10-K for the fiscal year ended February 29, 2016. Management believes that the most meaningful analysis of our results of operations is to analyze our performance by segment. We use revenue and operating income by segment to evaluate our segments. Segment operating income consists of net sales less cost of sales and selling, general and administrative expenses that are specifically identifiable to a segment. For a reconciliation of segment operating income to pretax income, see Note 4 to our quarterly consolidated financial statements included in this Quarterly Report on Form 10-Q.

Orders and Backlog

Our entire backlog relates to our Energy Segment and was $347.3 million as of November 30, 2016, an increase of $12.8 million, or 3.8%, as compared to $334.5 million as of February 29, 2016. Our backlog increased $22.9 million, or 7.1%, as compared to the same period in the prior fiscal year. Both of these increases were primarily the result of the acquisition of PEI on March 1, 2016. For the three months ended November 30, 2016, our book-to-ship ratio increased to 0.98 to 1 from 0.94 to 1 when compared to same period of fiscal 2016 and our incoming orders decreased slightly by $6.8 million, or 3.0%. The table below includes the progression of the backlog:

15

Backlog Table

(in thousands)(unaudited)

	Period Ended			Period Ended
Backlog	2/29/2016	$	334,456	02/28/2015	$	332,595
Bookings		250,479			215,156
Acquired Backlog		11,903			—
Shipments		242,667			228,888
Backlog	5/31/2016	354,171		5/31/2015	318,863
Book to Ship Ratio		1.03			0.94
Bookings		193,712			233,532
Shipments		195,045			214,246
Backlog	8/31/2016	352,838		8/31/2015	338,149
Book to Ship Ratio		0.99			1.09
Bookings		221,874			228,677
Shipments		227,459			242,447
Backlog	11/30/2016	347,253		11/30/2015	324,379
Book to Ship Ratio		0.98			0.94

Segment Revenues

For the three and nine month periods ended November 30, 2016, consolidated revenues decreased $15.0 million, or 6.2%, and $20.4 million, or 3.0%, respectively, as compared to the same periods in fiscal 2016.

The following table reflects the breakdown of revenue by segment:

	Three Months Ended				Nine Months Ended
	11/30/2016		11/30/2015		11/30/2016		11/30/2015
	(In thousands)(unaudited)
Revenue:
Energy	$	135,553	$	136,007	$	371,256	$	383,787
Galvanizing	91,906		106,440		293,915		301,794
Total Revenue	$	227,459	$	242,447	$	665,171	$	685,581

Revenues for the Energy Segment decreased 0.3% for the three months ended November 30, 2016, to $135.6 million as compared to the same period in fiscal 2016. The decrease in revenue during the third quarter was caused by several factors including reduced turnarounds in the U.S. refinery market, continued softness in the petrochemical market, and delays in the release of several large projects in the U.S. and overseas. Revenues decreased 3.3% for the nine months ended November 30, 2016 to $371.3 million as compared to the same period in fiscal 2016, primarily on softness in the third quarter described above.

Revenues for the Galvanizing Segment decreased 13.7% for the three months ended November 30, 2016, to $91.9 million as compared to the same period in fiscal 2016. The decline was a result of a volume decrease in steel processed caused by softness in the solar, petrochemical, and the oil and gas markets which offset higher pricing during the period. Revenues decreased 2.6%, for the nine months ended November 30, 2016, to $293.9 million as compared to the same period in fiscal 2016. The decrease was attributable to the same factors impacting the quarter.

Segment Operating Income

Operating income for the Energy Segment decreased by $3.4 million, or 18.1%, to $15.4 million for the three months ended November 30, 2016 as compared to the same period in fiscal 2016. This decrease is attributable to the reduction in refinery turnarounds described above, which typically carry a higher margin, coupled with generally lower margin projects in the balance of the segment. Operating income decreased $3.4 million, or 7.5%, to $42.4 million for the nine months ended November 30, 2016 as compared to the same period of fiscal 2016 and attributable to the same factors impacting the third quarter in addition to the $0.7 million of realignment costs recorded during the second quarter of fiscal 2017.

16

Operating income for the Galvanizing Segment decreased by $2.9 million, or 12.0%, for the three months ended November 30, 2016 as compared to the same period in fiscal 2016. This decrease was primarily attributable to lower revenues. Operating income decreased $11.0 million, or 15.4%, for the nine months ended November 30, 2016 as compared to the same period in fiscal 2016, primarily driven by the $7.3 million of realignment charge related to the shutdown of two galvanizing plants, the repurposing of a third plant, and the disposal of obsolete assets taken in the second quarter of fiscal 2017.

Corporate Expenses

Corporate expenses increased by $1.3 million, or 19.3%, and $3.1 million, or 14.2% for the three and nine month periods ended November 30, 2016 as compared to the same respective periods in fiscal 2016. This increase is attributable to higher spend on professional services, higher employee costs, and depreciation of corporate assets in fiscal 2017.

Interest

Interest expense for the three and nine month periods ended November 30, 2016 was $3.7 million and $11.2 million, respectively. The slight decrease in interest expense for the three and nine month periods ended November 30, 2016 in comparison to the same respective periods in the prior year was the result of a lower average outstanding debt balance. As of November 30, 2016, our gross outstanding debt was $312.1 million, compared to $321.9 million outstanding as of November 30, 2015. Our gross debt to equity ratio was 0.60 to 1 as of November 30, 2016, compared to 0.69 to 1 as of November 30, 2015.

Net Gain On Sale of Property, Plant and Equipment and Insurance Proceeds

For the three months ended November 30, 2016 and 2015, the Company recorded an insignificant net gain due to sales from miscellaneous equipment. For the nine months ended November 30, 2016, the Company recorded an insignificant net loss due to sales from miscellaneous equipment and for the nine months ended November 30, 2015, the Company recorded a net gain of $0.4 million as a result of insurance proceeds received along with a gain on the sale of our St. Catharines property located in Ontario, Canada.

Other (Income) Expense

For the three and nine month periods ended November 30, 2016, the amounts recorded to other (income) expense were primarily attributable to an insurance receivable of $0.6 million and foreign exchange (gains) and losses. For the three and nine month periods ended November 30, 2015, the amounts recorded to other (income) expense were primarily attributable to foreign exchange (gains) and losses.

Income Taxes

The provision for income taxes reflects an effective tax rate of 29.7% and 27.4% for the three and nine month periods ended November 30, 2016, respectively, as compared to 28.0% and 27.5% for the same respective periods in fiscal 2015.

LIQUIDITY AND CAPITAL RESOURCES

We have historically met our cash needs through a combination of cash flows from operating activities along with bank and bond market debt. Our cash requirements are generally for operating activities, cash dividend payments, capital improvements, debt repayment and acquisitions. We believe that our cash position, cash flows from operating activities and our expectation of continuing availability to draw upon our credit facilities are sufficient to meet our cash flow needs for the foreseeable future.

For the nine month period endedNovember 30, 2016, net cash provided by operating activities was $57.3 million, net cash used in investing activities was $51.3 million, net cash used in financing activities was $32.3 million, and a decrease of $0.4 million from the net effect of exchange rate changes on cash resulting in a net decrease in cash and cash equivalents of $26.7 million. In comparison to fiscal 2016, the results in the statement of cash flows for the nine month period ended November 30, 2016, are attributable to a decrease in net income, higher charges due to additional realignment recorded during the year, and by a less favorable impact of changes in working capital. The Company's use of cash was lower for capital improvements year over year and fewer acquisitions were completed during the first nine months of fiscal 2017. Repayments under our Credit Agreement were also higher during the first nine months of fiscal 2017 when compared to the prior year and the Company began purchasing treasury shares during the current fiscal year.

Our working capital was $180.7 million as of November 30, 2016, as compared to $144.2 million at November 30, 2015.

On March 27, 2013, we entered into a Credit Agreement (the “Credit Agreement”) with Bank of America and other lenders. The Credit Agreement provides for a $75.0 million term facility and a $225.0 million revolving credit facility that includes a $75.0

17

million “accordion” feature. The Credit Agreement is used to provide for working capital needs, capital improvements, dividends, future acquisitions and letter of credit needs.

Interest rates for borrowings under the Credit Agreement are based on either a Eurodollar Rate or a Base Rate plus a margin ranging from 1.0% to 2.0% depending on our Leverage Ratio (as defined in the Credit Agreement). The Eurodollar Rate is defined as LIBOR for a term equivalent to the borrowing term (or other similar interbank rates if LIBOR is unavailable). The Base Rate is defined as the highest of the applicable Fed Funds rate plus 0.50%, the Prime rate, or the Eurodollar Rate plus 1.0% at the time of borrowing. The Credit Agreement also carries a Commitment Fee for the unfunded portion ranging from 0.20% to 0.30% per annum, depending on our Leverage Ratio.

The $75.0 million term facility under the Credit Agreement requires quarterly principal and interest payments, which commenced on June 30, 2013 and are required to be made through March 27, 2018, the maturity date.

The Credit Agreement provides various financial covenants requiring us, among other things, to a) maintain on a consolidated basis net worth equal to at least the sum of $230.0 million, plus 50.0% of future net income, b) maintain on a consolidated basis a Leverage Ratio not to exceed 3.25:1.0, c) maintain on a consolidated basis a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.75:1.0 and d) not to make Capital Expenditures (as defined in the Credit Agreement) on a consolidated basis in an amount in excess of $60.0 million during the fiscal year ended February 28, 2014 and $50.0 million during any subsequent year.

On August 8, 2016 we executed the First Amendment to the Credit Agreement.  The changes included, among other things, amendments to covenants including removing the cap on Capital Expenditures, raising the limits on asset disposition and other secured debt, and establishing a basket for investments specifically in joint ventures.  The amendment also removed limitations on dividends and on redemption of equity interest as long as the Company’s Leverage Ratio remained below 2.75:1.0.

As of November 30, 2016, we had $107.0 million of outstanding debt against the revolving credit facility provided and letters of credit outstanding in the amount of $21.6 million, which left approximately $96.4 million of additional credit available under the Credit Agreement.

On March 31, 2008, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) pursuant to which the Company issued $100.0 million aggregate principal amount of its 6.24% unsecured Senior Notes (the “2008 Notes”) due March 31, 2018 through a private placement (the “2008 Note Offering”). Pursuant to the Note Purchase Agreement, the Company’s payment obligations with respect to the 2008 Notes may be accelerated upon any Event of Default, as defined in the Note Purchase Agreement.

The Company entered into an additional Note Purchase Agreement on January 21, 2011 (the “2011 Agreement”), pursuant to which the Company issued $125.0 million aggregate principal amount of its 5.42% unsecured Senior Notes (the “2011 Notes”), due in January of 2021, through a private placement (the “2011 Note Offering”). Pursuant to the 2011 Agreement, the Company's payment obligations with respect to the 2011 Notes may be accelerated under certain circumstances.

The 2008 Notes and the 2011 Notes each provide for various financial covenants requiring us, among other things, to a) maintain on a consolidated basis net worth (as defined in the Note Purchase Agreement) equal to at least the sum of $116.9 million plus 50.0% of future net income; b) maintain a ratio of indebtedness to EBITDA (as defined in Note Purchase Agreement) not to exceed 3.25:1.00; c) maintain on a consolidated basis a Fixed Charge Coverage Ratio (as defined in the Note Purchase Agreement) of at least 2.0:1.0; d) not at any time permit the aggregate amount of all Priority Indebtedness (as defined in the Note Purchase Agreement) to exceed 10.0% of Consolidated Net Worth.

As of November 30, 2016, the Company is in compliance with all of its debt covenants.

Historically, we have not experienced a significant impact on our operations from increases in general inflation other than for specific commodities. We have exposure to commodity price increases in both segments of our business, primarily copper, aluminum, steel and nickel based alloys in the Energy Segment and zinc and natural gas in the Galvanizing Segment. We attempt to minimize these increases through escalation clauses in customer contracts for copper, aluminum, steel and nickel based alloys, when market conditions allow and through fixed cost contract purchases on zinc. In addition to these measures, we attempt to recover other cost increases through improvements to our manufacturing process, supply chain management, and through increases in prices where competitively feasible.

18

OFF BALANCE SHEET TRANSACTIONS AND RELATED MATTERS

Other than operating leases discussed below, there are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.

CONTRACTUAL COMMITMENTS

Leases

We lease various facilities under non-cancelable operating leases with an initial term in excess of one year.

Commodity pricing

The Company manages its exposure to commodity prices through the use of the following:

In the Energy Segment, we have exposure to commodity pricing for copper, aluminum, steel, and nickel based alloys. Because the Energy Segment does not commit contractually to minimum volumes, increases in price for these items are normally managed through escalation clauses in customer contracts, although during difficult market conditions these escalation clauses may not be obtainable. In addition, we attempt to enter into firm pricing contracts with our vendors on material at the time we receive orders from our customers to minimize risk.

In the Galvanizing Segment, we utilize contracts with our zinc suppliers that include protective caps and fixed cost contracts to guard against rising zinc prices. We also secure firm pricing for natural gas supplies with individual utilities when possible. Management believes these agreements ensure adequate supplies and partially offset exposure to commodity price swings.

We have no contracted commitments for any commodities including steel, aluminum, natural gas, nickel based alloys, copper, zinc or any other commodity, except for those entered into under the normal course of business.

Other

As of November 30, 2016, we had outstanding letters of credit in the amount of $21.6 million.  These letters of credit are issued for a number of reasons, but are most commonly issued in lieu of customer retention withholding payments covering warranty or performance periods.

The following summarizes our operating leases, debt principal payments, and interest payments for the next five years and beyond.

	Operating Leases		Long-Term Debt		Interest		Total
Fiscal:	(In thousands)
2017	$	1,904	$	2,344	$	4,455	$	8,703
2018	5,938		16,629		12,279		34,846
2019	4,992		168,161		8,256		181,409
2020	2,812		—		6,775		9,587
2021	2,275		125,000		6,775		134,050
Thereafter	9,360		—		—		9,360
Total	$	27,281	$	312,134	$	38,540	$	377,955

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Market risk affecting our operations results primarily from changes in interest rates and commodity prices. We have only limited involvement with derivative financial instruments and are not a party to any leveraged derivatives.

In the Energy Segment, we have exposure to commodity pricing for copper, aluminum, steel and nickel based alloys. Increases in price for these items are normally managed through escalation clauses in our customers' contracts, although during difficult market conditions customers' may resist these escalation clauses. In addition, we attempt to enter into firm pricing contracts with our vendors on material at the time we receive orders from our customers to minimize risk. We manage our exposures to commodity prices, primarily zinc used in our Galvanizing Services Segment, by utilizing agreements with zinc suppliers that include protective caps and fixed contracts to guard against escalating commodity prices. We also secure firm pricing for natural gas supplies with individual utilities when possible. We believe these agreements ensure adequate supplies and partially offset exposure to commodity price escalation.

As of November 30, 2016, the Company had exposure to foreign currency exchange rates related to our operations in Canada, China, Brazil, Poland, and the Netherlands.

We do not believe that a hypothetical change of 10% of the interest rate or currency exchange rate that are currently in effect or a change of 10% of commodity prices would have a significant adverse effect on our results of operations, financial position, or cash flows as long as we are able to pass along the increases in commodity prices to our customers. However, there can be no assurance that either interest rates, exchange rates or commodity prices will not change in excess of the 10% hypothetical amount or that we would be able to pass along rising costs of commodity prices to our customers, and such hypothetical change could have an adverse effect on our results of operations, financial position, and cash flows.

19

Item 4.    Controls and Procedures

Under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, management of the Company has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective and provide reasonable assurance, as of the end of the period covered by this report, that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and were effective to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely discussions regarding required disclosure.

There have been no significant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

20

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are named defendants in various routine lawsuits incidental to our business.  These proceedings include labor and employment claims, use of the Company’s intellectual property, worker’s compensation and various environmental  matters, all arising in the normal course of business.  Although the outcome of these lawsuits or other proceedings cannot be predicted with certainty, and the amount of any potential liability that could arise with respect to such lawsuits or other matters cannot be predicted at this time, management, after consultation with legal counsel, does not expect liabilities, if any, from these claims or proceedings, either individually or in the aggregate, to have a material effect on the Company’s financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended February 29, 2016.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In January of 2012, our Board authorized the repurchase of up to ten percent of the outstanding shares of our Common Stock. The share repurchase authorization does not have an expiration date, and the amount and prices paid for any future share purchases under the authorization will be based on market conditions and other factors at the time of the purchase. Repurchases under this share repurchase authorization would be made through open market purchases or private transactions in accordance with applicable federal securities laws, including Rule 10b-18 under the Exchange Act.

As of November 30, 2016, the Company repurchased 100,000 shares at an average price of $52.82 per share under the Company's share repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits Required by Item 601 of Regulation S-K.

A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits on page 24, which immediately precedes such exhibits.

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		AZZ Inc. (Registrant)
DATE: January 6, 2017	By:	/s/ Paul W. Fehlman
		Paul W. Fehlman Senior Vice President, Chief Financial Officer

22

EXHIBIT INDEX

3.1	Amended and Restated Certificate of Formation of AZZ Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on July 14, 2015)
3.2	Amended and Restated Bylaws of AZZ Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Registrant on July 14, 2015)
10.1	Note Purchase Agreement dated March 31, 2008, by and among AZZ incorporated and the purchasers listed therein (incorporated by reference to Exhibit 10(1) of the Current Report on Form 8-K filed by the registrant on April 2, 2008).
10.2	AZZ incorporated Employee Stock Purchase Plan (incorporated by reference to Appendix B of the Proxy Statement for the 2008 Annual Shareholders Meeting).
10.3	Note Purchase Agreement, dated as of January 20, 2011, by and among AZZ incorporated and the purchasers identified therein (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the registrant on January 21, 2011).
10.4	Credit Agreement, dated as of March 27, 2013, by and among AZZ, Bank of America N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, and the other Lenders party thereto (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the registrant on April 2, 2013).
10.5	First Amendment to the Credit Agreement, dated as of August 8, 2016, between AZZ, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuers, and the other Lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the registrant on August 10, 2016).
10.6*	Amended and Restated Employment Agreement by and between AZZ Inc. and Tom Ferguson, dated as of September 29, 2016 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed September 29, 2016).
10.7*	AZZ incorporated 2014 Long Term Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Form DEFA filed May 29, 2014).
10.8*	First Amendment to AZZ Inc. 2014 Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the registrant on January 21, 2016.
31.1	Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
31.2	Certification by Chief Financial Officer Certificate pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
32.1	Certification by Chief Executive Officer Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
32.2	Chief Financial Officer Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Management contract, compensatory plan or arrangement.

23

EX-31.1

Exhibit 31.1

Certification by Thomas E. Ferguson

Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Thomas E. Ferguson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AZZ Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: January 6, 2017	/s/ Thomas E. Ferguson
	Thomas E. Ferguson
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification by Paul W. Fehlman

Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Paul W. Fehlman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of AZZ Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: January 6, 2017	/s/ Paul W. Fehlman
	Paul W. Fehlman
	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Thomas E. Ferguson, has executed this certification in connection with the filing with the Securities and Exchange Commission of AZZ Inc.’s Quarterly Report on Form 10-Q for the period ended November 30, 2016 (the “Report”). The undersigned hereby certifies that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of AZZ Inc.

Dated: January 6, 2017	/s/ Thomas E. Ferguson
	Thomas E. Ferguson
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Paul W. Fehlman, has executed this certification in connection with the filing with the Securities and Exchange Commission of AZZ Inc.’s Quarterly Report on Form 10-Q for the period ended November 30, 2016 (the “Report”). The undersigned hereby certifies that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of AZZ Inc.

Dated: January 6, 2017	/s/ Paul W. Fehlman
	Paul W. Fehlman
	Senior Vice President and
	Chief Financial Officer

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Document and Entity Information	9 Months Ended
	Nov. 30, 2016 shares
Document and Entity Information [Abstract]
Entity Registrant Name	AZZ INC
Entity Central Index Key	0000008947
Document Type	10-Q
Document Period End Date	Nov. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--02-28
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	25,953,941

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 30, 2016	Feb. 29, 2016
Current Assets:
Cash and Cash Equivalents	$ 13,479	$ 40,191
Accounts receivable (net of allowance for doubtful accounts of $349 as of November 30, 2016 and $264 as of February 29, 2016)	167,039	131,416
Inventories:
Raw Material	77,126	66,548
Work-In-Process	48,196	28,539
Finished Goods	496	7,048
Costs and Estimated Earnings In Excess of Billings On Uncompleted Contracts	26,059	32,287
Deferred Income Taxes	223	200
Prepaid Expenses and Other	4,666	3,105
Total Current Assets	337,284	309,334
Property, Plant and Equipment, Net	224,092	226,333
Goodwill	305,411	292,527
Intangibles and Other Assets, Net	150,888	153,816
Total Assets	1,017,675	982,010
Current Liabilities:
Accounts Payable	55,910	46,748
Income Tax Payables	4,290	2,697
Accrued Salaries and Wages	21,842	30,473
Other Accrued Liabilities	24,456	20,406
Customer Advance Payment	19,351	15,652
Long Term Debt Due Within One Year	18,973	23,192
Billings In Excess of Costs and Estimated Earnings On Uncompleted Contracts	11,718	9,237
Total Current Liabilities	156,540	148,405
Long-Term Debt Due After One Year	292,181	302,429
Deferred Income Taxes	49,650	49,960
Liabilities	498,371	500,794
Shareholders' Equity:
Common stock, $1 par, shares authorized 100,000; 26,054 shares issued and 25,954 oustanding at November 30, 2016 and 25,874 shares issued and oustanding at February 29, 2016	26,054	25,874
Capital In Excess of Par Value	41,493	35,148
Retained Earnings	487,875	450,754
Accumulated Other Comprehensive Income	(30,836)	(30,560)
Treasury Stock, Common, Value	(5,282)	0
Total Shareholders' Equity	519,304	481,216
Total Liabilities and Shareholders' Equity	$ 1,017,675	$ 982,010

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Condensed consolidated Balance Sheets (Parenthetical) - USD ($)	Nov. 30, 2016	Feb. 29, 2016
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Doubtful Accounts	$ 349,388	$ 264,105
Common Stock, Par Value (usd per share)	$ 1	$ 1
Common Stock, Shares Authorized (shares)	100,000,000	100,000,000
Common Stock, Shares Issued (shares)	26,053,941	25,873,690
Common Stock, Shares, Outstanding	25,952,974	25,873,690

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015
Income Statement [Abstract]
Net Sales	$ 227,459	$ 242,447	$ 665,171	$ 685,581
Costs and Expenses
Cost of Sales	173,593	179,999	506,091	510,324
Gross Profit	53,866	62,448	159,080	175,257
Selling, General and Administrative	25,082	26,040	80,898	79,545
Operating Income (Loss)	28,784	36,408	78,182	95,712
Interest Expense	3,654	3,743	11,159	11,612
Gain (Loss) on Disposition of Property Plant Equipment	57	16	(26)	465
Other Expense (Income) - net	(759)	(27)	(949)	828
Income Before Income Taxes	25,946	32,708	67,946	83,737
Income Tax Expense	7,695	9,161	18,609	23,023
Net Income	$ 18,251	$ 23,547	$ 49,337	$ 60,714
Earnings Per Common Share
Basic Earnings Per Share (usd per share)	$ 0.70	$ 0.91	$ 1.90	$ 2.35
Diluted Earnings Per Share (usd per share)	$ 0.70	$ 0.91	$ 1.89	$ 2.34

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015
Statement of Comprehensive Income [Abstract]
Net Income	$ 18,251	$ 23,547	$ 49,337	$ 60,714
Other Comprehensive Income (Loss):
Unrealized Translation Gains (Losses)	(2,918)	(1,492)	(235)	(6,652)
Interest rate swap, net of income tax of $7, $7, $22, and $22, respectively.	(14)	(14)	(41)	(41)
Other Comprehensive Income (Loss)	(2,932)	(1,506)	(276)	(6,693)
Comprehensive Income	$ 15,319	$ 22,041	$ 49,061	$ 54,021

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015
Statement of Comprehensive Income [Abstract]
Interest rate swap, income tax	$ 7	$ 7	$ 22	$ 22

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015
Cash Flows From Operating Activities:
Net Income	$ 49,337	$ 60,714
Adjustments To Reconcile Net Income To Net Cash Provided By Operating Activities:
Provision For Doubtful Accounts	18	(1,045)
Amortization and Depreciation	37,964	35,077
Deferred Income Tax Expense	(331)	(32)
Property, Plant and Equipment, Disposals	6,602	464
Net Loss (Gain) On Insurance Settlement or On Sale of Property, Plant & Equipment	26	(465)
Amortization of Deferred Borrowing Costs	952	1,015
Share Based Compensation Expense	4,408	3,493
Effects of Changes In Assets & Liabilities:
Accounts Receivable	(33,706)	(3,209)
Inventories	(20,760)	(7,872)
Prepaid Expenses and Other	(1,554)	(935)
Other Assets	(2,451)	(420)
Net Change In Billings Related To Costs and Estimated Earnings On Uncompleted Contracts	8,853	(3,056)
Accounts Payable	7,588	15,835
Other Accrued Liabilities and Income Taxes Payable	329	4,594
Net Cash Provided By Operating Activities	57,275	104,158
Cash Flows Used For Investing Activities:
Proceeds From Sale Or Insurance Settlement of Property, Plant, and Equipment	543	1,111
Purchase of Property, Plant and Equipment	(29,135)	(32,161)
Acquisition of Subsidiaries, Net of Cash Acquired	(22,679)	(49,818)
Net Cash From Investing Activities	(51,271)	(80,868)
Cash Flows From Financing Activities:
Excess Tax Benefits From Stock Options and Stock Appreciation Rights	0	496
Proceeds from revolving loan	150,000	112,481
Payments on revolving loan	(144,000)	(108,561)
Payments on Long Term Debt	(20,848)	(19,911)
Payments for Repurchase of Common Stock	(5,282)	0
Payments of Dividends	(12,216)	(11,606)
Net Cash Used In Financing Activities	(32,346)	(27,101)
Effect of Exchange Rate Changes on Cash	(370)	(1,118)
Net Increase (Decrease) In Cash & Cash Equivalents	(26,712)	(4,929)
Cash & Cash Equivalents At Beginning of Period	40,191	22,527
Cash & Cash Equivalents At End of Period	13,479	17,598
Supplemental Disclosures
Cash Paid For Interest	9,291	9,942
Cash Paid For Income Taxes	$ 17,768	$ 15,638

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Consolidated Statement of Shareholders' Equity (Unaudited) - 9 months ended Nov. 30, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Capital in Excess of Par Value	Treasury Stock, Common [Member]	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at Feb. 29, 2016	$ 481,216	$ 25,874	$ 35,148	$ 0	$ 450,754	$ (30,560)
Balance (shares) at Feb. 29, 2016		25,874
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Compensation (shares)		13
Stock Compensation	4,408	$ 13	4,395
Restricted Stock Units (shares)		25
Restricted Stock Units	(573)	$ 25	(598)
Stock Issued for Stock Appreciation Rights Shares		71
Stock Issued For Stock Appreciation Rights	(224)	$ 71	(295)
Employee Stock Purchase Plan (shares)		71
Employee Stock Purchase Plan	2,914	$ 71	2,843
Treasury Stock, Common, Value	(5,282)
Cash Dividend Paid	12,216				(12,216)
Net Income	49,337
Foreign Currency Translation	(235)					(235)
Interest rate swap, net of $22 income tax	(41)					(41)
Balance at Nov. 30, 2016	$ 519,304	$ 26,054	$ 41,493	$ (5,282)	$ 487,875	$ (30,836)
Balance (shares) at Nov. 30, 2016		26,054

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Consolidated Statement of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015
Statement of Stockholders' Equity [Abstract]
Interest rate swap, income tax	$ 7	$ 7	$ 22	$ 22

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Basis of Presentation

9 Months Ended

Nov. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The Company and Basis of Presentation

AZZ Inc. (“AZZ”, the “Company”, "our" or “we”) was established in 1956 and incorporated under the laws of the State of Texas. We are a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. We have two distinct operating segments: the Energy Segment and Galvanizing Segment. AZZ Galvanizing is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.

Presentation

The accompanying condensed consolidated balance sheet as of February 29, 2016, which was derived from audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 29, 2016, included in the Company’s Annual Report on Form 10-K covering such period. 

Our fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ended February 28, 2017 is referred to as fiscal 2017.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial position of the Company as of November 30, 2016, the results of its operations for the three and nine months ended November 30, 2016 and 2015, and cash flows for the nine months ended November 30, 2016 and 2015. These interim results are not necessarily indicative of results for a full year.

Accounting Standards Recently Adopted

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendment in this ASU affects all organizations that issue share-based payment awards to employees and is intended to simplify several aspects of the accounting for these awards, including income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and allowing an accounting policy election to account for forfeitures as they occur. As permitted by ASU 2016-09, the Company elected to early adopt ASU 2016-09 in the quarter ended August 31, 2016 with an effective date of March 1, 2016. As a result of the adoption, a tax benefit of $1.3 million was recorded in the quarter ended August 31, 2016. The tax benefit was driven primarily by the exercise, during the first six months of fiscal 2017, of share-based awards issued prior to FY2014. The adoption was on a prospective basis and therefore had no impact on prior years.

In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Previously, debt issuance costs were recognized as deferred charges and recorded as other assets. In August 2015, the FASB issued ASU 2015-15, "Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements." ASU 2015-15 allows an entity to defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The guidance is effective for annual and interim periods beginning after December 15, 2015 with early adoption permitted and is to be implemented retrospectively.

Effective March 1, 2016, we adopted these standards which required the retroactive application and represented a change in accounting principle. The unamortized debt issuance costs of approximately $1.4 million associated with a portion of our outstanding debt , which were previously presented as a component of intangibles and other assets on the consolidated balance sheets, are reflected as a reduction to the carrying liability of our outstanding debt. Debt issuance costs associated with our revolving line of credit remain classified in intangibles and other assets and continue to be charged to interest expense over the term of the agreement. As a result of this change in accounting principal, the consolidated balance sheet as of February 29, 2016 was adjusted as follows:

	February 29, 2016
	Previously Reported		Effect of Adoption of Accounting Principle			As Adjusted
	(in thousands)
Assets:
Intangibles and other assets	$	155,177	$	(1,361	)	$	153,816
Total assets	$	983,371	$	(1,361	)	$	982,010
Liabilities:
Debt due after one year	$	303,790	$	(1,361	)	$	302,429
Total liabilities	$	502,155	$	(1,361	)	$	500,794

New Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires a lessee to recognize a liability to make lease payments and a right-of-use asset representing a right to use the underlying asset for the lease term on the balance sheet. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", issued as a new Topic, Accounting Standards Codification (ASC) Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. On April 1, 2015, the FASB decided to defer the effective date of the new revenue standard by one year. As a result, public entities would apply the new revenue standard to annual reporting periods beginning after December 15, 2017. This standard will be effective for the Company beginning in fiscal 2019. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements or decided upon the method of adoption.

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Earnings Per Share

9 Months Ended

Nov. 30, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Earnings per share is based on the weighted average number of shares outstanding during each period, adjusted for the dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months ended November 30,				Nine Months Ended November 30,
	2016		2015		2016		2015
	(Unaudited) (In thousands except per share data)
Numerator:
Net income for basic and diluted earnings per common share	$	18,251	$	23,547	$	49,337	$	60,714
Denominator:
Denominator for basic earnings per common share–weighted average shares	26,005		25,823		25,974		25,787
Effect of dilutive securities:
Employee and director stock awards	128		154		130		133
Denominator for diluted earnings per common share	26,133		25,977		26,104		25,920
Earnings per share basic and diluted:
Basic earnings per common share	$	0.70	$	0.91	$	1.90	$	2.35
Diluted earnings per common share	$	0.70	$	0.91	$	1.89	$	2.34

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Stock-based Compensation

9 Months Ended

Nov. 30, 2016

Share-based Compensation [Abstract]

Stock-based Compensation

Share-based Compensation

The Company has one share-based compensation plan, the 2014 Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the growth and prosperity of the Company by permitting the Company to grant to its employees, directors and advisors various types of restricted stock unit awards, performance share units, stock options, and stock appreciation rights to purchase common stock of the Company. The maximum number of shares that may be issued under the Plan is 1,500,000 shares. As of November 30, 2016 the Company has approximately 1,280,249 shares available for future issuance under the Plan.

Restricted Stock Unit Awards

Restricted stock unit awards are valued at the market price of our common stock on the grant date. Awards issued prior to fiscal 2015 generally have a three year cliff vesting schedule and awards issued subsequent to fiscal 2015 generally vest ratably over a period of three years but these awards may vest early in accordance with the Plan’s accelerated vesting provisions.

The activity of our non-vested restricted stock unit awards for the nine month period endedNovember 30, 2016 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	98,693		$	45.03
Granted	73,585		56.65
Vested	(35,324	)	45.70
Forfeited	—		—
Non-Vested Balance as of November 30, 2016	136,954		$	51.10

Performance Share Unit Awards

Performance share unit awards are valued at the market price of our common stock on the grant date. These awards have a three year performance cycle and will vest and become payable, if at all, on the third anniversary of the award date. The awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods. In addition, a multiplier may be applied to the total awards granted which is based on the Company’s total shareholder return during such three year period in comparison to a defined specific industry peer group as set forth in the plan.The activity of our non-vested performance share unit awards for the nine month period endedNovember 30, 2016 is as follows:

	Performance Stock Units	Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	27,415	$	46.65
Granted	24,011	57.47
Vested	—	—
Forfeited	—	—
Non-Vested Balance as of November 30, 2016	51,426	$	51.70

Stock Appreciation Rights

Stock appreciation rights are granted with an exercise price equal to the market value of our common stock on the date of grant. These awards generally have a contractual term of 7 years and vest ratably over a period of three years although some may vest immediately on issuance. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company’s stock appreciation rights activity for the nine month period endedNovember 30, 2016 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 29, 2016	312,748		$	34.23
Granted	—		—
Exercised	(128,427	)	25.71
Forfeited	—		—
Outstanding as of November 30, 2016	184,321		$	40.16
Exercisable as of November 30, 2016	143,371		$	39.00

The average remaining contractual term for those stock appreciation rights outstanding at November 30, 2016 is 3.52 years, with an aggregate intrinsic value of $4.6 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of November 30, 2016 is 3.33 years, with an aggregate intrinsic value of $3.7 million.

Employee Stock Purchase Plan

The Company also has an employee stock purchase plan, which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of 24 months (the "offering period"). On the first day of an offering period (the “enrollment date”) the participant is granted the option to purchase shares on each exercise date at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. The participant’s right to purchase common stock under the plan is restricted to no more than $25,000 per calendar year and the participant may not purchase more than 5,000 shares during any offering period. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period. The fair value of the estimated number of shares to be issued under each offering is determined using the Black-Scholes option pricing model. For the nine month period endedNovember 30, 2016, the Company issued 70,937 shares under the Employee Stock Purchase Plan.

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows:

Nine months ended November 30,	2016		2015
	(In thousands)
	(Unaudited)
Compensation Expense	$	4,408	$	3,493
Income tax benefits	$	1,411	$	1,223

Unrecognized compensation cost related to restricted stock units, performance share unit awards, stock appreciation rights, and the employee stock purchase plan at November 30, 2016 totals $8.0 million.

The Company’s policy is to issue shares required under these plans from the Company’s treasury shares or from the Company’s authorized but unissued shares. As of November 30, 2016, the Company has repurchased 100,000 shares at an average price of $52.82 per share under the Company's share repurchase program. For more information on the Company's requirements for the share repurchase program, see Part II, Item 2.

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Segments

9 Months Ended

Nov. 30, 2016

Segment Reporting [Abstract]

Segments

Segments

Information regarding operations and assets by segment was as follows:

	Three Months Ended November 30,						Nine Months Ended November 30,
	2016			2015			2016			2015
	(Unaudited) (In thousands)
Net Sales:
Energy	$	135,553		$	136,007		$	371,256		$	383,787
Galvanizing	91,906			106,440			293,915			301,794
Total net sales	227,459			242,447			665,171			685,581
Operating Income:
Energy	15,434			18,846			42,383			45,807
Galvanizing	21,345			24,264			60,679			71,689
Corporate	(7,995		)	(6,702		)	(24,880		)	(21,784		)
Total operating income	28,784			36,408			78,182			95,712
Interest expense	3,654			3,743			11,159			11,612
Net (gain) loss on sale of property, plant and equipment and insurance proceeds	(57		)	(16		)	26			(465		)
Other (income) expense, net	(759		)	(27		)	(949		)	828
Income before income taxes	$	25,946		$	32,708		$	67,946		$	83,737
Total Assets:
Energy	$	577,328		$	539,193		$	577,328		$	539,193
Galvanizing	421,991			432,297			421,991			432,297
Corporate	18,356			19,462			18,356			19,462
	$	1,017,675		$	990,952		$	1,017,675		$	990,952

Financial Information About Geographical Areas

Below is a breakdown of selected financial information by geographical area:

	Three Months Ended November 30,					Nine Months Ended November 30,
	2016		2015			2016			2015
	(Unaudited) (In thousands)
Net Sales:
U.S.	$	191,526	$	197,372		$	537,084		$	543,306
International	35,933		45,424			128,243			142,970
Eliminations	—		(349		)	(156		)	(695		)
Total Net Sales	$	227,459	$	242,447		$	665,171		$	685,581

	November 30, 2016		February 29, 2016
	(In thousands)
	(Unaudited)
Property, Plant and Equipment, Net:
U.S.	$	200,943	$	204,587
Canada	17,774		17,868
Other Countries	5,375		3,878
Total Property, Plant and Equipment, Net	$	224,092	$	226,333

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Warranty Reserves

9 Months Ended

Nov. 30, 2016

Product Warranties Disclosures [Abstract]

Warranty Reserves

Warranty Reserves

A reserve has been established to provide for the estimated future cost of warranties on a portion of the Company’s delivered products and is classified within accrued liabilities on the consolidated balance sheet. Management periodically reviews the reserves and makes adjustments accordingly. Warranties cover such factors as non-conformance to specifications and defects in material and workmanship. The following table shows changes in the warranty reserves since the end of fiscal 2016:

	Warranty Reserve
	(unaudited)
	(in thousands)
Balance at February 29, 2016	$	2,915
Warranty costs incurred	(1,465		)
Additions charged to income	1,246
Balance at November 30, 2016	$	2,696

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DEBT (Notes)

9 Months Ended

Nov. 30, 2016

Debt [Abstract]

Long-term Debt [Text Block]

Debt

Our debt consisted of the following:

	As of
	November 30, 2016			February 29, 2016
	(In thousands)
	(Unaudited)
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	28,571			42,857
Term Note, due in quarterly installments beginning in June 2013 through March 2018	51,563			58,125
Revolving line of credit with bank	107,000			101,000
Total debt	312,134			326,982
Unamortized debt issuance costs for Senior Notes and Term Note	(980		)	(1,361		)
Total debt, net	311,154			325,621
Less amount due within one year	(18,973		)	(23,192		)
Debt due after one year, net	$	292,181		$	302,429

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Realignment (Notes)

9 Months Ended

Nov. 30, 2016

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Activities Disclosure [Text Block]

Realignment Costs

As part of its ongoing efforts to optimize cost and effectiveness, during the second quarter of fiscal 2017, the Company undertook a review of its operations in order to optimize financial performance of its operating assets. As a result, the Company recognized $8.0 million of realignment charges in the second quarter of fiscal 2017. A total of $6.7 million was included in Cost of Sales for the disposition and write off of certain fixed assets within the Galvanizing Segment, including the cost of closing two plants, the write off of certain assets related to the conversion of a third plant from a standard galvanizing plant to a galvanized rebar plant, and the cost of writing off certain other functionally obsolete assets across other galvanizing plants during the second quarter. We also reserved $1.3 million in Selling, General and Administrative Expense for realignment costs related to one-time employee severance associated with changes needed to improve management efficiency in the Energy and Galvanizing Segments.

The following table shows changes in the realignment accrual for the nine months ended November 30, 2016:

	Realignment Accrual
	(unaudited)
	(in thousands)
Realignment reserve balance as of February 29, 2016	$	61
Additions to reserve	1,260
Realignment costs utilized	(890		)
Realignment reserve balance as of November 30, 2016	$	431

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Acquisitions (Notes)

9 Months Ended

Nov. 30, 2016

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Acquisitions and Divestitures

On March 1, 2016, we completed an acquisition of the equity securities of Power Electronics, Inc. ("PEI"), a Millington, Maryland-based manufacturer and integrator of electrical enclosure systems. The acquisition of PEI will enhance our capacity to serve existing and new customers in a diverse set of industries along the Eastern seaboard of the United States.

Unaudited pro forma results of operations assuming the PEI acquisition had taken place at the beginning of each period are not provided because the historical operating results of PEI were not significant and pro forma results would not be significantly different from reported results for the periods presented.

On October 3, 2016, AZZ entered into an agreement to divest its indirectly held subsidiary, Nuclear Logistics LLC (“NL”) to Westinghouse Electric Company, LLC (“Westinghouse”) in exchange for cash. Terms of the transaction were not disclosed, and are subject to customary terms and conditions. As of November 30, 2016 and through the date of this report, negotiations for the divestiture were still underway and a close date could not be determined. In addition, management has the intention to withdraw the plan to divest NLI if the current transaction is not completed, and to continue current operations. As a result of the ongoing negotiations between AZZ and Westinghouse and management's overall plan for the subsidiary, the Company determined it had not met the criteria set forth under ASC 360-10-45-9, initial criteria for classification as held for sale, as of November 30, 2016, therefore a reclassification on the balance sheet was not made.

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Subsequent Events (Notes)

9 Months Ended

Nov. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

None.

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Earnings Per Share (Tables)

9 Months Ended

Nov. 30, 2016

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months ended November 30,				Nine Months Ended November 30,
	2016		2015		2016		2015
	(Unaudited) (In thousands except per share data)
Numerator:
Net income for basic and diluted earnings per common share	$	18,251	$	23,547	$	49,337	$	60,714
Denominator:
Denominator for basic earnings per common share–weighted average shares	26,005		25,823		25,974		25,787
Effect of dilutive securities:
Employee and director stock awards	128		154		130		133
Denominator for diluted earnings per common share	26,133		25,977		26,104		25,920
Earnings per share basic and diluted:
Basic earnings per common share	$	0.70	$	0.91	$	1.90	$	2.35
Diluted earnings per common share	$	0.70	$	0.91	$	1.89	$	2.34

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Stock-based Compensation (Tables)

9 Months Ended

Nov. 30, 2016

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based Compensation, Performance Shares Award Unvested Activity [Table Text Block]

The activity of our non-vested performance share unit awards for the nine month period endedNovember 30, 2016 is as follows:

	Performance Stock Units	Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	27,415	$	46.65
Granted	24,011	57.47
Vested	—	—
Forfeited	—	—
Non-Vested Balance as of November 30, 2016	51,426	$	51.70

Restricted Stock Unit Awards Non-Vested

The activity of our non-vested restricted stock unit awards for the nine month period endedNovember 30, 2016 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	98,693		$	45.03
Granted	73,585		56.65
Vested	(35,324	)	45.70
Forfeited	—		—
Non-Vested Balance as of November 30, 2016	136,954		$	51.10

Stock Appreciation Rights and Option Awards

A summary of the Company’s stock appreciation rights activity for the nine month period endedNovember 30, 2016 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 29, 2016	312,748		$	34.23
Granted	—		—
Exercised	(128,427	)	25.71
Forfeited	—		—
Outstanding as of November 30, 2016	184,321		$	40.16
Exercisable as of November 30, 2016	143,371		$	39.00

Share-based compensation expense and related income tax

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows:

Nine months ended November 30,	2016		2015
	(In thousands)
	(Unaudited)
Compensation Expense	$	4,408	$	3,493
Income tax benefits	$	1,411	$	1,223

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Warranty Reserves (Tables)

9 Months Ended

Nov. 30, 2016

Product Warranties Disclosures [Abstract]

Changes in the warranty reserves

The following table shows changes in the warranty reserves since the end of fiscal 2016:

	Warranty Reserve
	(unaudited)
	(in thousands)
Balance at February 29, 2016	$	2,915
Warranty costs incurred	(1,465		)
Additions charged to income	1,246
Balance at November 30, 2016	$	2,696

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DEBT (Tables)

9 Months Ended

Nov. 30, 2016

Debt [Abstract]

Schedule of Debt [Table Text Block]

Our debt consisted of the following:

	As of
	November 30, 2016			February 29, 2016
	(In thousands)
	(Unaudited)
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	28,571			42,857
Term Note, due in quarterly installments beginning in June 2013 through March 2018	51,563			58,125
Revolving line of credit with bank	107,000			101,000
Total debt	312,134			326,982
Unamortized debt issuance costs for Senior Notes and Term Note	(980		)	(1,361		)
Total debt, net	311,154			325,621
Less amount due within one year	(18,973		)	(23,192		)
Debt due after one year, net	$	292,181		$	302,429

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015
Numerator:
Net income for basic and diluted earnings per common share	$ 18,251	$ 23,547	$ 49,337	$ 60,714
Denominator:
Denominator for basic earnings per common share-weighted average shares (shares)	26,005	25,823	25,974	25,787
Effect of dilutive securities:
Employee and Director stock awards (shares)	128	154	130	133
Denominator for diluted earnings per common share (shares)	26,133	25,977	26,104	25,920
Earnings per share basic and diluted:
Basic earnings per Common share (usd per share)	$ 0.70	$ 0.91	$ 1.90	$ 2.35
Diluted earnings per common share (usd per share)	$ 0.70	$ 0.91	$ 1.89	$ 2.34

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Stock-based Compensation (Details) - Restricted Stock Units (RSUs) [Member]	9 Months Ended
	Nov. 30, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-Vested Balance as of February 29, 2016 | shares	98,693
Granted (shares) | shares	73,585
Vested (shares) | shares	(35,324)
Forfeited (shares) | shares	0
Non-Vested Balance as of November 30, 2016 | shares	136,954
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-Vested Balance as of February 29, 2016 | $ / shares	$ 45.03
Granted, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	56.65
Vested, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	45.70
Forfeited, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	0.00
Non-Vested Balance as of November 30, 2016 | $ / shares	$ 51.10

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Stock-based Compensation (Details 1) - Stock Appreciation Rights (SARs) [Member] - $ / shares	9 Months Ended
	Nov. 30, 2016	Feb. 29, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	184,321	312,748
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 40.16	$ 34.23
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments, Number of Shares [Roll Forward]
Granted (shares)	0
Exercised (shares)	(128,427)
Forfeited (shares)	0
Exercisable as of November 30, 2016	143,371
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument, Weighted Average Grant Date Fair Value [Roll Forward]
Granted, Weighted Average Exercise Price (usd per share)	$ 0.00
Exercised, Weighted Average Exercise Price (usd per share)	25.71
Forfeited, Weighted Average Exercise Price (usd per share)	0.00
Exercisable as of November 30, 2016	$ 39.00

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Stock-based Compensation (Details 2) - USD ($) $ in Thousands	9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015
Share based compensation expense and related income tax benefits
Compensation Expense	$ 4,408	$ 3,493
Income tax benefits	$ 1,411	$ 1,223

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Stock-based Compensation (Details Textual)	9 Months Ended
	Nov. 30, 2016 USD ($) share_based_compensation_plan $ / shares shares	Feb. 29, 2016 $ / shares shares
Share Based Compensation (Textual) [Abstract]
Number Of Share-Based Compensation Plans | share_based_compensation_plan	1
Shares authorized (shares)	1,500,000
Share for future issuance (shares)	1,280,249
Unrecognized compensation cost | $	$ 8,007,574
Treasury Stock, Shares, Acquired	100,000
Treasury Stock Acquired, Average Cost Per Share | $ / shares	$ 52.82
Restricted Stock [Member]
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	51,426	27,415
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares	$ 51.70	$ 46.650
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	24,011
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 57.47
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares	$ 0.00
Stock Appreciation Rights (SARs) [Member]
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Term for the contract	7 years
Outstanding Average contractual term	3 years 6 months 7 days
Outstanding Aggregate intrinsic value | $	$ 4,600,000
Average remaining contractual term	3 years 3 months 28 days
Aggregate remaining intrinsic value | $	$ 3,700,000
Employee Stock [Member]
Share Based Compensation (Textual) [Abstract]
Term of offering under stock purchase plan	24 months
Granted option lower than	85.00%
Restricted common stock under plan | $	$ 25,000
Common stock purchased during period (shares)	5,000
Share-based Compensation Arrangement, By Share-based Payment Award, Common Shares Estimated To Be Issued	70,937

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Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 30, 2015	Nov. 30, 2016	Nov. 30, 2015	Feb. 29, 2016
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	$ 224,092		$ 224,092		$ 226,333
Operations and assets by segment
Net Sales	227,459	$ 242,447	665,171	$ 685,581
Operating Income	28,784	36,408	78,182	95,712
Interest Expense	3,654	3,743	11,159	11,612
Gain (Loss) on Disposition of Property Plant Equipment	(57)	(16)	26	(465)
Other Nonoperating Income (Expense)	(759)	(27)	(949)	828
Income Before Income Taxes	25,946	32,708	67,946	83,737
Assets	1,017,675	990,952	1,017,675	990,952	982,010
Energy [Member]
Operations and assets by segment
Net Sales	135,553	136,007	371,256	383,787
Operating Income	15,434	18,846	42,383	45,807
Assets	577,328	539,193	577,328	539,193
Galvanizing Services [Member]
Operations and assets by segment
Net Sales	91,906	106,440	293,915	301,794
Operating Income	21,345	24,264	60,679	71,689
Assets	421,991	432,297	421,991	432,297
Corporate, Non-Segment [Member]
Operations and assets by segment
Operating Income	(7,995)	(6,702)	(24,880)	(21,784)
Corporate [Member]
Operations and assets by segment
Assets	18,356	19,462	18,356	19,462
UNITED STATES
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	200,943		200,943		204,587
Operations and assets by segment
Net Sales	191,526	197,372	537,084	543,306
CANADA
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	17,774		17,774		17,868
Other Countries [Member]
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	5,375		5,375		$ 3,878
International [Member]
Operations and assets by segment
Net Sales	35,933	45,424	128,243	142,970
Geography Eliminations [Member]
Operations and assets by segment
Net Sales	$ 0	$ (349)	$ (156)	$ (695)

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Warranty Reserves (Details) $ in Thousands	9 Months Ended
	Nov. 30, 2016 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Opening Balance	$ 2,915
Warranty costs incurred	1,465
Closing Balance	2,696
Product Warranty Accrual, Warranties Issued	$ 1,246

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DEBT (Details) - USD ($) $ in Thousands	Nov. 30, 2016	Feb. 29, 2016
Debt Instrument [Line Items]
Long-term Debt	$ 311,154	$ 325,621
Long-term Debt, Gross	312,134	326,982
Unamortized Debt Issuance Expense	(980)	(1,361)
Debt, Current	(18,973)	(23,192)
Long-term Debt, Excluding Current Maturities	292,181	302,429
Senior Notes [Member] | Unsecured Senior Notes Due January 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt	125,000	125,000
Senior Notes [Member] | Unsecured Senior Notes Due March 2012 through March 2018 [Member]
Debt Instrument [Line Items]
Long-term Debt	28,571	42,857
Medium-term Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	51,563	58,125
Line of Credit [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 107,000	$ 101,000

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Realignment (Details) - USD ($) $ in Thousands	6 Months Ended	9 Months Ended
	Aug. 31, 2016	Nov. 30, 2016	Nov. 30, 2015	Feb. 29, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		$ (6,602)	$ (464)
Restructuring Reserve		431		$ 61
Restructuring Reserve, Period Increase (Decrease)	$ 1,260
Restructuring Reserve, Accrual Adjustment	$ (890)
Restructuring Charges [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Charges		6,700
Severance Costs		$ 1,300