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Operating Segments
 6 Months Ended
Aug. 31, 2024
Segment Reporting [Abstract]  
Operating Segments
6. Operating Segments
Segment Information
Our Chief Executive Officer, who is the chief operating decision maker ("CODM"), reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Sales and operating income are the primary measures used by the CODM to evaluate segment operating performance and to allocate resources to the AZZ Metal Coatings and the AZZ Precoat Metals segments, 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.
A summary of each of our operating segments is as follows:
AZZ Metal Coatings — provides hot-dip galvanizing, spin galvanizing, powder coating, anodizing and plating, and other metal coating applications to the steel fabrication industry and other industries through facilities located throughout North America. Hot-dip galvanizing is a metallurgical manufacturing process in which molten zinc reacts with steel, which provides corrosion protection and extends the lifecycle of fabricated steel for several decades.
AZZ Precoat Metals — provides coil coating application of protective and decorative coatings and related value-added downstream processing for steel and aluminum coils. Primarily serving the construction, appliance, heating, ventilation, and air conditioning (HVAC), container, transportation, and other end markets, the coil coating process emphasizes sustainability and enhanced product lifecycles. It involves cleaning, treating, painting, and curing metal coils as a flat material before they are cut, formed, and fabricated into finished products. This highly efficient method optimizes waste through tight film control and improves final product performance by painting and curing the substrates under conditions unmatched by other application processes.

AZZ Infrastructure Solutions — consists of the equity in earnings of our 40% investment in the AVAIL JV, as well as other expenses directly related to AIS receivables and liabilities that were retained following the divestiture of the AIS business. The AVAIL JV is a global provider of application-critical equipment, highly engineered technologies, and specialized services to the power generation, transmission, distribution, oil and gas, and industrial markets.
The following tables contain operating segment data for the three and six months ended August 31, 2024 and 2023 by segment, for the Company's corporate operations and on a consolidated basis (in thousands):
Three Months Ended August 31, 2024
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)
Total
Sales$171,500 $237,507 $— $— $409,007 
Cost of sales118,193 187,300 — — 305,493 
Gross margin53,307 50,207 — — 103,514 
Selling, general and administrative5,619 7,677 9 22,563 35,868 
Operating income (loss)47,688 42,530 (9)(22,563)67,646 
Interest expense— — — (21,909)(21,909)
Equity in earnings of unconsolidated subsidiaries— — 1,478 — 1,478 
Other (expense) income(7)— — 424 417 
Income (loss) before income tax$47,681 $42,530 $1,469 (44,048)47,632 
Income tax expense12,213 12,213 
Net income (loss)$(56,261)$35,419 
See notes below tables.
Six Months Ended August 31, 2024
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)
Total
Sales$348,152 $474,063 $— $— $822,215 
Cost of sales240,929 375,102 — — 616,031 
Gross margin107,223 98,961 — — 206,184 
Selling, general and administrative11,602 16,338 38 40,811 68,789 
Operating income (loss)95,621 82,623 (38)(40,811)137,395 
Interest expense— — — (44,683)(44,683)
Equity in earnings of unconsolidated subsidiaries— — 5,302 — 5,302 
Other income49 — — 572 621 
Income (loss) before income tax$95,670 $82,623 $5,264 (84,922)98,635 
Income tax expense23,614 23,614 
Net income (loss)$(108,536)$75,021 
See notes below tables.
Three Months Ended August 31, 2023
Metal CoatingsPrecoat Metals
Infrastructure Solutions(1)
Corporate(2)
Total
Sales$169,837 $228,705 $— $— $398,542 
Cost of sales119,471 181,825 — — 301,296 
Gross margin50,366 46,880 — — 97,246 
Selling, general and administrative5,285 7,874 5,932 17,148 36,239 
Operating income (loss)45,081 39,006 (5,932)(17,148)61,007 
Interest expense— — — (27,770)(27,770)
Equity in earnings of unconsolidated subsidiaries— — 974 — 974 
Other income13 — — 75 88 
Income (loss) before income tax$45,094 $39,006 $(4,958)(44,843)34,299 
Income tax expense5,967 5,967 
Net income (loss)$(50,810)$28,332 
See notes below tables.

Six Months Ended August 31, 2023
Metal Coatings
Precoat Metals(4)
Infrastructure Solutions(1)
Corporate(2)
Total
Sales$338,631 $450,784 $— $— $789,415 
Cost of sales237,328 357,822 — — 595,150 
Gross margin101,303 92,962 — — 194,265 
Selling, general and administrative10,751 16,266 5,954 34,791 67,762 
Operating income (loss)90,552 76,696 (5,954)(34,791)126,503 
Interest expense— — — (56,476)(56,476)
Equity in earnings of unconsolidated subsidiaries— — 2,394 — 2,394 
Other income (expense)(11)— — 61 50 
Income (loss) before income tax$90,541 $76,696 $(3,560)(91,206)72,471 
Income tax expense15,617 15,617 
Net income (loss)$(106,823)$56,854 
(1) Infrastructure Solutions segment includes the equity in earnings from our investment in the AVAIL JV as well as other expenses related to
receivables and liabilities that were retained following the sale of the AIS business.
(2) Interest expense and Income tax expense are included in the Corporate segment as these items are not allocated to the segments.
Asset balances by operating segment for each period were as follows (in thousands):
As of
August 31, 2024February 29, 2024
Assets:
Metal Coatings$550,394 $553,505 
Precoat Metals1,557,895 1,500,122 
Infrastructure Solutions - Investment in Joint Venture97,768 98,169 
Corporate34,273 43,709 
Total assets$2,240,330 $2,195,505 

Financial Information About Geographical Areas
Financial information about geographical areas for the periods presented was as follows (in thousands). The geographic area is based on the location of the operating facility and no customer accounted for 10 percent or more of consolidated sales.
Three Months Ended August 31,Six Months Ended August 31,
2024202320242023
Sales:
United States$398,658 $388,538 $801,709 $769,860 
Canada10,349 10,004 20,506 19,555 
Total$409,007 $398,542 $822,215 $789,415 

As of
August 31, 2024February 29, 2024
Property, plant and equipment, net:
United States$550,761 $522,693 
Canada18,971 18,959 
Total$569,732 $541,652