Leases (Tables)

12 Months Ended

Feb. 28, 2025

The following table outlines the classification of right-of-use ("ROU") asset and lease liabilities in the consolidated balance sheets for fiscal 2025 and 2024 (in thousands):


		As of
		February 28, 2025		February 29, 2024
Assets	Balance Sheet Classification
Operating right-of-use assets	Right-of-use assets	$	19,471	$	19,808
Finance right-of-use assets	Right-of-use assets	6,480		3,931
Liabilities
Operating lease liabilities ― short-term	Lease liability - short-term	6,373		5,893
Operating lease liabilities ― long-term	Lease liability - long-term	13,741		14,606
Finance lease liabilities ― short-term	Lease liability - short-term	1,376		766
Finance lease liabilities ― long-term	Lease liability - long-term	5,271		3,221

Supplemental information related to our leases was as follows (in thousands, except years and percentages):


	As of
	February 28, 2025			February 29, 2024
Operating cash flows from operating leases included in lease liabilities	$	7,213		$	7,270
Lease liabilities obtained from new ROU assets - operating	$	6,073		$	2,321
Weighted-average remaining lease term - operating leases	3.79 years			4.12 years
Weighted-average discount rate - operating leases	5.06		%	4.49		%
Decrease in ROU assets related to lease terminations	$	—		$	(1,294)
Financing cash flows from finance leases included in lease liabilities	$	988		$	425
Operating cash flows from finance leases included in lease liabilities	$	341		$	109
Lease liabilities obtained from new ROU assets - finance leases	$	3,781		$	3,083
Weighted-average remaining lease term - finance leases	4.57 years			5.21 years
Weighted-average discount rate - finance leases	6.86		%	6.70		%

The following table outlines our lease expense in the consolidated statements of operations for fiscal 2025, 2024, and 2023 (in thousands):


	Year Ended
	February 28, 2025		February 29, 2024		February 28, 2023
Operating lease expense:
Cost of sales	$	6,117	$	6,008	$	7,934
Selling, general and administrative	1,932		1,947		1,810
Total operating lease expense	8,049		7,955		9,744
Financing lease expense:
Cost of sales	1,117		468		199
Interest expense	341		109		33
Total financing lease expense	1,458		577		232
Variable lease expense:
Cost of sales	471		454		251

Total variable lease expense	471		454		251
Short-term lease expense:
Cost of sales	6,402		5,416		4,025
Selling, general and administrative	33		52		48
Total short-term lease expense	6,435		5,468		4,073
Total lease expense	$	16,413	$	14,454	$	14,300

Lessee, Operating Lease, Liability, Maturity

As of February 28, 2025, maturities of our lease liabilities were as follows (in thousands):


Fiscal year:	Operating Leases		Finance Leases		Total
2026	$	7,209	$	1,779	$	8,988
2027	5,853		1,738		7,591
2028	3,787		1,644		5,431
2029	3,122		1,438		4,560
2030	1,202		913		2,115

Thereafter	902		206		1,108
Total lease payments	22,075		7,718		29,793
Less imputed interest	(1,961)		(1,071)		(3,032)
Total	$	20,114	$	6,647	$	26,761

Finance Lease, Liability, Maturity

As of February 28, 2025, maturities of our lease liabilities were as follows (in thousands):


Fiscal year:	Operating Leases		Finance Leases		Total
2026	$	7,209	$	1,779	$	8,988
2027	5,853		1,738		7,591
2028	3,787		1,644		5,431
2029	3,122		1,438		4,560
2030	1,202		913		2,115

Thereafter	902		206		1,108
Total lease payments	22,075		7,718		29,793
Less imputed interest	(1,961)		(1,071)		(3,032)
Total	$	20,114	$	6,647	$	26,761

Operating Lease, Lease Income

We sublease multiple buildings in Columbia, South Carolina to multiple subtenants. The Columbia sublease agreements are by and between AZZ Precoat Metals and multiple subtenants. Sublease income is recognized over the term of the sublease on a straight-line basis and is reported in the consolidated statement of operations as a reduction to "Cost of sales."


	Year Ended
	February 28, 2025		February 29, 2024		February 28, 2023
Sublease income	$	1,055	$	1,002	$	773