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Operating Segments
 9 Months Ended
Nov. 30, 2023
Segment Reporting [Abstract]  
Operating Segments
8. Operating Segments
Segment Information
The Company’s Chief Executive Officer, who is the chief operating decision maker ("CODM"), reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Sales and operating income are the primary measures used by the CODM to evaluate segment operating performance and to allocate resources to the AZZ Metal Coatings and the AZZ Precoat Metals segments, and net income is the primary measure used by the CODM to evaluate performance and allocate resources to the AZZ Infrastructure Solutions segment. Expenses related to certain centralized administration or executive functions that are not specifically related to an operating segment are included in Corporate. As presented in Note 3, the AVAIL JV operating results for the period prior to deconsolidation are included within discontinued operations, with the exception of AZZ Crowley Tubing, which was retained by the Company and merged into the AZZ Metal Coatings segment. See Note 3 for the results of operations related to the AZZ Infrastructure Solutions segment.
A summary of each of the Company's operating segments is as follows:
AZZ Metal Coatings — provides hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating, and other metal coating applications to the steel fabrication and other industries through facilities located throughout the United States and Canada. Hot-dip galvanizing is a metallurgical manufacturing process in which molten zinc reacts to steel. The zinc alloying provides corrosion protection and extends the life cycle of fabricated steel for several decades.
AZZ Precoat Metals — engages in the advanced application of protective and decorative coatings and related value-added manufacturing for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation and air conditioning (HVAC); container; transportation and other end markets.
AZZ Infrastructure Solutions — consists of the equity in earnings of the Company's 40% investment in the AVAIL JV, as well as other expenses directly related to AIS receivables and liabilities that were retained following the divestiture of the AIS business. The AVAIL JV provides specialized products and services designed to support primarily industrial and electrical applications. The product offerings include custom switchgear, electrical enclosures, medium- and high-voltage bus ducts, explosion proof and hazardous duty lighting products. The AZZ Infrastructure Solutions segment also focuses on life-cycle extension for the power generation, refining and industrial infrastructure, through providing automated weld overlay solutions for corrosion and erosion mitigation.
Net income from continuing operations by segment for the three and nine months ended November 30, 2023 and 2022 was as follows (in thousands):
Three Months Ended November 30, 2023
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)(3)
Total
Sales$163,186 $218,419 $— $— $381,605 
Cost of sales115,952 177,504 — — 293,456 
Gross margin47,234 40,915 — — 88,149 
Selling, general and administrative9,392 8,163 290 17,480 35,325 
Operating income (loss) from continuing operations37,842 32,752 (290)(17,480)52,824 
Interest expense— — — 25,855 25,855 
Equity in earnings of unconsolidated subsidiaries— — (8,742)— (8,742)
Other expense29 — — 12 41 
Income (loss) from continuing operations before income tax$37,813 $32,752 $8,452 (43,347)35,670 
Income tax expense8,780 8,780 
Net income (loss) from continuing operations$(52,127)$26,890 
Nine Months Ended November 30, 2023
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)(3)
Total
Sales$501,816 $669,204 $— $— $1,171,020 
Cost of sales353,280 535,326 — — 888,606 
Gross margin148,536 133,878 — — 282,414 
Selling, general and administrative20,143 24,429 6,244 52,271 103,087 
Operating income (loss) from continuing operations128,393 109,449 (6,244)(52,271)179,327 
Interest expense— — — 82,331 82,331 
Equity in earnings of unconsolidated subsidiaries— — (11,136)— (11,136)
Other (income) expense40 — — (49)(9)
Income (loss) from continuing operations before income tax$128,353 $109,449 $4,892 (134,553)108,141 
Income tax expense24,397 24,397 
Net income (loss) from continuing operations$(158,950)$83,744 
(1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV, as well as other
    expenses related to receivables and liabilities that were retained by the Company following the sale of the AIS business.
(2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments.
(3) For fiscal year 2024, amortization expense for acquired intangible assets is included in Corporate expenses in "Selling, general and
    administrative" expense as these expenses are not allocated to the segments.
Three Months Ended November 30, 2022
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)(3)
Total
Sales$158,274 $215,027 $— $— $373,301 
Cost of sales120,134 180,085 — — 300,219 
Gross margin38,140 34,942 — — 73,082 
Selling, general and administrative4,594 13,889 — 9,206 27,689 
Operating income (loss) from continuing operations33,546 21,053 — (9,206)45,393 
Interest expense— — — 26,123 26,123 
Equity in earnings of unconsolidated subsidiaries— — (1,006)— (1,006)
Other income(124)— — (486)(610)
Income (loss) from continuing operations before income tax$33,670 $21,053 $1,006 (34,843)20,886 
Income tax expense2,447 2,447 
Net income (loss) from continuing operations$(37,290)$18,439 
Nine Months Ended November 30, 2022
Metal Coatings
Precoat Metals(4)
Infrastructure Solutions(1)
Corporate(2)(3)
Total
Sales$487,567 $499,578 $— $— $987,145 
Cost of sales350,152 402,303 — — 752,455 
Gross margin137,415 97,275 — — 234,690 
Selling, general and administrative13,603 33,361 — 50,283 97,247 
Operating income (loss) from continuing operations123,812 63,914 — (50,283)137,443 
Interest expense— — — 61,739 61,739 
Equity in earnings of unconsolidated subsidiaries— — (1,006)— (1,006)
Other (income) expense6 (41)— (547)(582)
Income (loss) from continuing operations before income tax$123,806 $63,955 $1,006 (111,475)77,292 
Income tax expense18,380 18,380 
Net income (loss) from continuing operations$(129,855)$58,912 
(1) Infrastructure Solutions segment includes the Company’s equity in (earnings) loss from its investment in the AVAIL JV.
(2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments.
(3) For fiscal year 2023, amortization expense for acquired intangible assets is included in Metal Coatings expenses in "Cost of sales" and in Precoat
    Metals in "Selling, general and administrative" expense.
(4) For the nine months ended November 30, 2022, Precoat Metals segment includes results from May 13, 2022 - November 30, 2022.
Asset balances by operating segment for each period were as follows (in thousands):
As of
November 30, 2023February 28, 2023
Assets:
Metal Coatings$559,149 $588,337 
Precoat Metals1,504,828 1,488,810 
Infrastructure Solutions - Investment in Joint Venture97,238 84,760 
Corporate47,541 59,572 
Total assets$2,208,756 $2,221,479 

Financial Information About Geographical Areas
Financial information about geographical areas for the periods presented was as follows (in thousands):
Three Months Ended November 30,Nine Months Ended November 30,
2023202220232022
Sales:
United States$370,485 $363,660 $1,140,344 $951,855 
Canada11,120 9,641 30,676 35,290 
Total$381,605 $373,301 $1,171,020 $987,145 
As of
November 30, 2023February 28, 2023
Property, plant and equipment, net:
United States$506,070 $478,722 
Canada19,268 19,781 
Total$525,338 $498,503