Income Taxes

12 Months Ended

Feb. 28, 2026

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The provision for income taxes for fiscal year 2026, 2025 and 2024 consisted of the following (in thousands):

	Year Ended
	February 28, 2026		February 28, 2025		February 29, 2024
Income before income taxes:
Domestic	$	412,281	$	165,822	$	123,955
Foreign	8,034		4,861		6,148
Income before income taxes	420,315		170,683		130,103
Current provision:
Federal	55,957		28,660		19,839
Foreign	2,206		1,738		2,189
State and local	12,104		3,350		1,716
Total current provision for income taxes	70,267		33,748		23,744
Deferred provision (benefit):
Federal	27,094		7,123		3,920
Foreign	494		(340)		(316)
State and local	5,200		1,319		1,148
Total deferred provision for income taxes	32,788		8,102		4,752
Total provision for income taxes	$	103,055	$	41,850	$	28,496

A reconciliation from the federal statutory income tax amount and federal statutory income tax rate to the effective income tax amount and effective income tax rate is as follows for fiscal year 2026:

	Year Ended
	February 28, 2026
	Amount		Percent
U.S. Federal Statutory Income Tax Rate	$	88,266	21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect(1)	15,107		3.6	%
Foreign Tax Effects	472		0.1	%
Effect of Cross-Border Tax Laws	22		—	%
Tax Credits
Research and development tax credits	(4,588)		(1.1)	%
Nontaxable or Nondeductible Items	1,587		0.4	%
Changes in Unrecognized Tax Benefits	1,169		0.3	%
Other Adjustments	1,020		0.2	%
Effective Tax	$	103,055	24.5	%

(1) Fiscal year 2026 State taxes in Illinois, Wisconsin, Massachusetts, Tennessee, Missouri, Kansas, and Oklahoma contributed to the majority of the tax effect in this category.

A reconciliation from the federal statutory income tax rate to the effective income tax rate is as follows for the fiscal years 2025 and 2024:

	Year Ended
	February 28, 2025		February 29, 2024
U.S. Federal Statutory Income Tax	21.0	%	21.0	%
Permanent Differences	1.0		0.5
State Income Taxes, Net of Federal Income Tax Benefit	2.3		1.9
Stock Compensation	(0.5)		0.1
Tax Credits	(0.2)		(1.7)
Foreign Tax Rate Differential	0.2		0.2
ASC 740-10 Uncertain Tax Positions	0.1		(1.8)
Other	0.6		1.7
Effective Income Tax Rate	24.5	%	21.9	%

The effective tax rate was flat at 24.5% for fiscal 2026, compared to fiscal 2025. In the current year, the effective tax rate was negatively impacted by an increase in state tax expense from our investment in the AVAIL JV, partially offset by higher R&D tax credits related to the construction of the new aluminum coil coating facility in Washington, Missouri. In the prior year, the effective tax rate was negatively impacted by non-deductible items such as compensation limited by IRC Sec. 162(m), meals and entertainment subject to the 50% limitation under IRC Sec. 274(n) and higher state tax expense, net of federal benefit.

Deferred federal and state income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial accounting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income tax liability are as follows for fiscal year 2026 and 2025 (in thousands):

	As of
	February 28, 2026		February 28, 2025
Deferred income tax assets:
Employee related items	$	8,745	$	10,867
Inventories	5,727		5,205
Accrued warranty	1,199		1,336
Accounts receivable	1,505		1,926
Lease liabilities	14,888		6,406
Net operating loss and other credit carryforwards	4,956		5,707
Research and experiment expenses	970		5,046
Interest expense limitation	3,701		8,565
Outside basis difference—AVAIL JV	5,720		274
Other deferred income tax assets	449		334
Total deferred income tax assets	47,860		45,666
Deferred income tax liabilities:
Depreciation methods and property basis differences	(51,711)		(36,671)
Right-of-use lease assets	(14,622)		(6,219)
Other assets and tax-deductible goodwill	(54,068)		(41,975)
Total deferred income tax liabilities	(120,401)		(84,865)
Net deferred income tax liabilities	$	(72,541)	$	(39,199)

The increase in net deferred tax liability was primarily attributable to the enactment of the One Big Beautiful Bill Act ("OBBBA") on July 4, 2025, as well as an increase in book over tax basis related to goodwill and the deductibility of interest expense that had previously been capitalized for tax purposes. The OBBBA reinstated 100% bonus depreciation, permitting us

to fully deduct the cost of qualifying assets in the year placed in service. In addition, the OBBBA eliminated the requirement to amortize domestic research and development expenditures over five years and instead allows for an immediate deduction in the year incurred, including deductions for previously unamortized domestic research and development expenditures from prior periods.

As of February 28, 2026, the Company had pretax state Net Operating Loss ("NOL") carry-forwards of $62.9 million which, if unused, will begin to expire in fiscal 2028 and pretax foreign NOL carry-forwards of $2.4 million, which, if unused, will begin to expire in fiscal 2043.

As of February 28, 2026 and February 28, 2025, a portion of the Company's deferred tax assets were the result of state and foreign jurisdiction NOL carry-forwards and state credit carry-forwards. We believe that it is more-likely-than-not that the benefit from certain foreign NOL carry-forwards and state credit carry-forwards will be realized. Therefore, we have not provided a valuation allowance as of February 28, 2026.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our operations. U.S. GAAP states that a tax benefit from an uncertain tax position may be recognized when it is more-likely-than-not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. We may (1) record unrecognized tax benefits as liabilities in accordance with U.S. GAAP and (2) adjust these liabilities when our judgment changes because of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information becomes available.

A reconciliation of the beginning and ending balance of total unrecognized tax benefits, which is included in "Other long-term liabilities" in the consolidated balance sheets for the years ended February 28, 2026 and February 28, 2025 is as follows (in thousands):

	As of
	February 28, 2026		February 28, 2025
Balance at beginning of period	$	1,699	$	1,808
Increase for tax positions related to current periods:
Gross increases	—		73
Increase for tax positions related to prior periods:
Gross increases	919		—
Gross decreases	(104)		—
Lapse of statute of limitations	(195)		(182)
Balance at end of period	$	2,319	$	1,699

Unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate were $2.3 million and $1.7 million at February 28, 2026 and 2025, respectively.

We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. Penalties and interest recorded to tax expense (benefit) for fiscal 2026 and 2025 were $0.5 million and $0.3 million, respectively.

We have prior year tax returns currently being examined in one state and do not have any other returns currently being examined by taxing authorities. We believe that we have provided adequate reserves for our income tax uncertainties in all open tax years. As the outcome of any tax audits cannot be predicted with certainty, if any issues addressed in our tax audits are resolved in a manner inconsistent with management's expectations, we could adjust our provision for income taxes in the future.

As of February 28, 2026, we have operations and taxable presence in the U.S. and Canada. The tax positions of the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions. We currently consider U.S. federal and state and Canada, to be significant tax jurisdictions. Our U.S. federal and state tax returns since February 28, 2023 remain open to examination. Our Canada tax returns since February 28, 2022 remain open to examination. The statute of limitations for fiscal year 2023 for U.S. will expire in December 2026, and fiscal year 2022 for Canada will expire in August 2026.

Prior to the enactment of H.R. 1, formerly known as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), we asserted that all unremitted earnings of our foreign subsidiaries were considered indefinitely reinvested. As a result of the Tax Act, we reported and paid U.S. tax on most of our previously unremitted foreign earnings. As of February 28, 2026, we continue to be indefinitely reinvested with respect to investments in its foreign subsidiaries. Additionally, we have not recorded deferred tax liabilities associated with the remaining unremitted earnings that are considered indefinitely reinvested. It is impracticable for us to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings, due to the complexities associated with the hypothetical calculation.

The following table presents income taxes paid, net of refunds (in thousands):

	Year Ended
	February 28, 2026		February 28, 2025		February 29, 2024
U.S. Federal	$	59,314	$	26,064	$	13,629
U.S. State and Local	14,944		2,050		3,582
Foreign	1,696		1,680		2,103
Cash paid for income taxes, net of refunds	$	75,954	$	29,794	$	19,314

For fiscal year 2026, no individual non-U.S. Federal jurisdiction accounted for 5% or more of total income taxes paid, net of refunds.

The OBBBA did not have a material impact to our net income tax expense or effective tax rate, but did result in a reduction in our fiscal 2026 cash tax payments.