Discontinued Operations

12 Months Ended

Feb. 28, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

9. Discontinued Operations

Discontinued Operations

On September 30, 2022, AZZ contributed its AZZ Infrastructure Solutions ("AIS") segment, excluding AZZ Crowley Tubing, to a joint venture, AIS Investment Holdings LLC (the "AVAIL JV") and sold a 60% interest in the AVAIL JV to Fernweh Group LLC ("Fernweh"). On September 30, 2022, the AVAIL JV was deconsolidated. Beginning October 1, 2022, the Company began accounting for its 40% interest in the AVAIL JV under the equity method of accounting. The AVAIL JV is included in the AZZ Infrastructure Solutions segment.

The divestiture of the AZZ Infrastructure Solutions segment represents an intentional strategic shift in our operations and allowed AZZ to become a focused provider of coating and galvanizing solutions for critical applications. As a result, the results of the AIS segment were classified as discontinued operations in our consolidated statements of operations and excluded from both continuing operations and segment results for the fiscal year ended February 28, 2023.

As part of recognizing the business as held for sale in accordance with GAAP, we were required to measure AIS at the lower of its carrying amount or fair value less cost to sell. As a result of this analysis, during fiscal 2023, we recognized a non-cash, pre-tax loss on disposal of $159.9 million. The loss is included in "Loss on disposal of discontinued operations" in the consolidated statements of operations. The loss was determined by comparing the fair value of the consideration received for the sale of a 60% interest in the AVAIL JV and the fair value of our retained 40% investment in the AVAIL JV with the net assets of the AVAIL JV immediately prior to the transaction. The fair value of our retained investment in the AVAIL JV was determined in a manner consistent with the transaction price received for the sale of the 60% interest in the AVAIL JV.

The results of operations from discontinued operations for fiscal year 2023 have been reflected as discontinued operations in the consolidated statements of operations and consist of the following (in thousands):

	Year Ended
		February 28, 2023
Sales		$	256,224
Cost of sales		202,707
Gross margin		53,517
Selling, general and administrative		26,186
Loss on disposal of discontinued operations		159,910
Operating loss from discontinued operations		(132,579)
Interest expense		(8)
Other expense, net		(6,270)
Loss from discontinued operations before income tax		(138,857)
Income tax benefit		(19,544)
Net loss from discontinued operations		$	(119,313)
Loss per common share from discontinued operations:
Basic loss per share		$	(4.81)
Diluted loss per share		$	(4.78)

The depreciation, amortization, capital expenditures, and significant operating and investing non-cash items of the discontinued operation for fiscal year 2023, consists of the following (in thousands):

	Year Ended
		February 28, 2023
Depreciation and amortization		$	7,279
Purchase of property, plant and equipment		4,831
Non-cash loss on disposal of discontinued operations		159,910

As of February 28, 2025, February 29, 2024, and February 28, 2023 the Company had no restructuring liabilities outstanding.