Leases (Tables)

12 Months Ended

Feb. 29, 2024

The following table outlines the classification of right-of-use asset and lease liabilities in the consolidated balance sheets for fiscal 2024 and 2023 (in thousands):


	Balance Sheet Classification	As of February 29/28,
		2024		2023
Assets
Operating right-of-use assets	Right-of-use assets	$	19,808	$	25,076
Finance right-of-use assets	Right-of-use assets	3,931		1,316
Liabilities
Operating lease liabilities ― short-term	Lease liability - short-term	$	5,893	$	6,119
Operating lease liabilities ― long-term	Lease liability - long-term	14,606		19,659
Finance lease liabilities ― short-term	Lease liability - short-term	766		284
Finance lease liabilities ― long-term	Lease liability - long-term	3,221		1,045

Supplemental information related to AZZ's operating leases was as follows (in thousands, except years and percentages):


	2024			2023
Operating cash flows from operating leases included in lease liabilities	$	7,270		$	5,832
Lease liabilities obtained from new ROU assets - operating	$	2,321		$	3,986
Weighted-average remaining lease term - operating leases	4.12 years			5.04 years
Weighted-average discount rate - operating leases	4.49		%	4.31		%
Decrease in ROU assets related to lease terminations	$	(1,294)		$	—
Financing cash flows from finance leases included in lease liabilities	$	425		$	186
Operating cash flows from finance leases included in lease liabilities	$	109		$	33
Lease liabilities obtained from new ROU assets - finance leases	$	3,083		$	420
Weighted-average remaining lease term - finance leases	5.21 years			4.61 years
Weighted-average discount rate - finance leases	6.70		%	5.15		%

The following table outlines the classification of lease expense related to operating and finance leases in the consolidated statements of operations for fiscal 2024, 2023, and 2022 (in thousands):


	Year Ended February 29/28,
	2024		2023		2022
Operating lease expense:
Cost of sales	$	11,877	$	12,210	$	6,744
Selling, general and administrative	2,000		1,858		1,264
Total operating lease expense	$	13,877	$	14,068	$	8,008
Financing lease expense:
Cost of sales	$	468	$	199	$	93
Interest expense	109		33		13
Total financing lease expense	$	577	$	232	$	106
Total lease expense	$	14,454	$	14,300	$	8,114

Lessee, Operating Lease, Liability, Maturity

As of February 29, 2024, maturities of our lease liabilities were as follows (in thousands):


Fiscal year:	Operating Leases		Finance Leases		Total
2025	$	6,667	$	1,004	$	7,671
2026	5,686		927		6,613
2027	4,500		888		5,388
2028	2,475		801		3,276
2029	1,871		584		2,455
Thereafter	1,251		532		1,783
Total lease payments	$	22,450	$	4,736	$	27,186
Less imputed interest	(1,951)		(749)		(2,700)
Total	$	20,499	$	3,987	$	24,486

Finance Lease, Liability, Maturity

As of February 29, 2024, maturities of our lease liabilities were as follows (in thousands):


Fiscal year:	Operating Leases		Finance Leases		Total
2025	$	6,667	$	1,004	$	7,671
2026	5,686		927		6,613
2027	4,500		888		5,388
2028	2,475		801		3,276
2029	1,871		584		2,455
Thereafter	1,251		532		1,783
Total lease payments	$	22,450	$	4,736	$	27,186
Less imputed interest	(1,951)		(749)		(2,700)
Total	$	20,499	$	3,987	$	24,486