10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2017

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12777

AZZ Inc.

(Exact name of registrant as specified in its charter)

TEXAS	75-0948250
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Museum Place, Suite 500
3100 West 7th Street
Fort Worth, Texas	76107
(Address of principal executive offices)	(Zip Code)

(817) 810-0095

Registrant’s telephone number, including area code:

NONE

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): 

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 

Title of each class:	Outstanding at August 31, 2017:
Common Stock, $1.00 par value per share	25,961,323

Explanatory Note

Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A") amends and restates certain items noted below in the Quarterly Report on Form 10-Q of AZZ Inc. (the “Company”) for the quarter ended August 31, 2017, as originally filed with the Securities and Exchange Commission on October 3, 2017 (the “Original Filing”). This Form 10-Q/A amends the Original Filing to reflect the correction of an error in the previously reported financial statements related to the Company’s revenue recognition practices within its Energy segment. See Note 2 to the Condensed Consolidated Financial Statements included in Item 1 for additional information and a reconciliation of the previously reported amounts to the restated amounts.

For the convenience of the reader, this form 10-Q/A sets forth the Original Filing, as amended, in its entirety; however, this Form 10-Q/A amends and restates only the following financial statements and disclosures that were impacted from the correction of the error:

• Part I, Item 1 - Financial Statements

• Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

• Part I, Item 4 - Controls and Procedures

• Part II, Item 6 - Exhibits

• Signatures

This Form 10-Q/A also amends Part II, Item 1 - Legal Proceedings to reflect updated legal matters. In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Form 10-Q/A (Exhibits 31.1, 31.2, 32.1 and 32.2), and the Company has provided its revised audited consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.

Except as described above, no other changes have been made to the Original Filing. This Form 10-Q/A speaks as of the date of the Original Filing and does not reflect events that may have occurred after the date of the Original Filing, or modify or update any disclosures that may have been affected by subsequent events.

The Company is also concurrently filing an amended Annual Report for the fiscal year ended February 28, 2017 and an amended Quarterly Report for the quarterly period ended May 31, 2017 to restate the previously issued annual and interim financial statements due to the accounting error described above.

2

AZZ Inc.

INDEX

		PAGE NO.
	Explanatory Note	2
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Condensed Financial Statements
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statement of Shareholders’ Equity	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	23
Item 4.	Controls and Procedures.	23
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings.	25
Item 1A.	Risk Factors.	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	25
Item 3.	Defaults Upon Senior Securities.	25
Item 4.	Mine Safety Disclosures.	25
Item 5.	Other Information.	25
Item 6.	Exhibits.	26
	SIGNATURES	27
	EXHIBIT INDEX	28

3

PART I. FINANCIAL INFORMATION

Item 1.         Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

	August 31, 2017			February 28, 2017
	(Restated)
Assets
Current assets:
Cash and cash equivalents	$	3,549		$	11,302
Accounts receivable (net of allowance for doubtful accounts of $391 as of August 31, 2017 and $347 as of February 28, 2017)	138,544			138,470
Inventories:
Raw material	89,138			80,169
Work-in-process	12,574			6,832
Finished goods	6,741			7,006
Costs and estimated earnings in excess of billings on uncompleted contracts	65,818			50,262
Deferred income taxes	—			249
Prepaid expenses and other	6,824			2,762
Total current assets	323,188			297,052
Deferred income taxes	215			—
Property, plant and equipment, net	230,314			228,610
Goodwill	310,032			306,579
Intangibles and other assets, net	145,833			146,113
	$	1,009,582		$	978,354
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	43,698		$	49,816
Income tax payable	1,357			778
Accrued salaries and wages	14,188			23,429
Other accrued liabilities	21,590			24,042
Customer deposits	1,606			1,459
Billings in excess of costs and estimated earnings on uncompleted contracts	21,687			20,617
Debt due within one year	14,286			16,629
Total current liabilities	118,412			136,770
Debt due after one year, net	287,522			254,800
Deferred income taxes	54,559			53,648
Total liabilities	460,493			445,218
Commitments and contingencies
Shareholders’ equity:
Common stock, $1 par, shares authorized 100,000; 25,961 shares issued and outstanding at August 31, 2017 and 25,964 shares issued and outstanding at February 28, 2017	25,961			25,964
Capital in excess of par value	36,391			37,739
Retained earnings	511,530			498,527
Accumulated other comprehensive loss	(24,793		)	(29,094		)
Total shareholders’ equity	549,089			533,136
	$	1,009,582		$	978,354

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net sales	$	196,329		$	200,790		$	401,612		$	451,156
Cost of sales	152,529			158,686			310,430			343,924
Gross margin	43,800			42,104			91,182			107,232
Selling, general and administrative	26,413			26,997			53,772			55,816
Operating income	17,387			15,107			37,410			51,416
Interest expense	3,400			3,580			6,760			7,505
Net loss on sale of property, plant and equipment and insurance proceeds	654			192			554			82
Other income - net	(394		)	(68		)	(479		)	(190		)
Income before income taxes	13,727			11,403			30,575			44,019
Income tax expense	3,941			1,244			8,727			11,671
Net income	$	9,786		$	10,159		$	21,848		$	32,348
Earnings per common share
Basic earnings per share	$	0.38		$	0.39		$	0.84		$	1.25
Diluted earnings per share	$	0.38		$	0.39		$	0.84		$	1.24

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net income	$	9,786		$	10,159		$	21,848		$	32,348
Other comprehensive income (loss):
Foreign currency translation adjustments
Unrealized translation gains	5,326			205			4,328			2,683
Interest rate swap, net of income tax of $7, $7, $15, and $15, respectively.	(14		)	(14		)	(27		)	(27		)
Other comprehensive income	5,312			191			4,301			2,656
Comprehensive income	$	15,098		$	10,350		$	26,149		$	35,004

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended August 31,
	2017			2016
	(Restated)			(Restated)
Cash Flows From Operating Activities:
Net income	$	21,848		$	32,348
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts	47			11
Amortization and depreciation	24,984			25,370
Deferred income taxes	850			2,266
Net loss on disposition of property, plant & equipment due to realignment	—			6,706
Net loss on sale of property, plant & equipment and insurance proceeds	554			82
Amortization of deferred borrowing costs	303			639
Share-based compensation expense	3,400			3,198
Effects of changes in assets & liabilities:
Accounts receivable	939			(3,247		)
Inventories	(13,304		)	(3,267		)
Prepaid expenses and other	(4,021		)	(3,040		)
Other assets	(1,106		)	141
Net change in billings related to costs and estimated earnings on uncompleted contracts	(14,197		)	(1,874		)
Accounts payable	(6,770		)	1,656
Other accrued liabilities and income taxes payable	(10,742		)	(10,961		)
Net cash provided by operating activities	2,785			50,028
Cash Flows From Investing Activities:
Proceeds from sale or insurance settlement of property, plant, and equipment	177			320
Purchase of property, plant and equipment	(16,636		)	(19,760		)
Acquisition of subsidiaries, net of cash acquired	(10,250		)	(22,679		)
Net cash used in investing activities	(26,709		)	(42,119		)
Cash Flows From Financing Activities:
Proceeds from revolving loan	209,000			86,000
Payments on revolving loan	(115,500		)	(92,000		)
Payments on long term debt	(63,504		)	(18,505		)
Purchases of treasury shares	(5,185		)	—
Payments of dividends	(8,845		)	(7,787		)
Net cash provided by (used in) financing activities	15,966			(32,292		)
Effect of exchange rate changes on cash	205			106
Net decrease in cash & cash equivalents	(7,753		)	(24,277		)
Cash & cash equivalents at beginning of period	11,302			40,191
Cash & cash equivalents at end of period	$	3,549		$	15,914
Supplemental disclosures
Cash paid for interest	$	7,020		$	7,230
Cash paid for income taxes	$	7,605		$	9,764

The accompanying notes are an integral part of the condensed consolidated financial statements.

7

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)

	Common Stock					Capital in Excess of Par Value			Retained Earnings (Restated)			Accumulated Other Comprehensive Income (Loss)			Total (Restated)
	Shares		Amount
Balance at February 28, 2017	25,964		$	25,964		$	37,739		$	498,527		$	(29,094	)	$	533,136
Stock compensation	16		16			3,384			—			—			3,400
Restricted stock units	42		42			(1,240		)	—			—			(1,198		)
Stock issued for SARs	1		1			(1		)	—			—			—
Employee stock purchase plan	35		35			1,597			—			—			1,632
Retirement of treasury shares	(97	)	(97		)	(5,088		)	—			—			(5,185		)
Cash dividends paid	—		—			—			(8,845		)	—			(8,845		)
Net income, as restated	—		—			—			21,848			—			21,848
Foreign currency translation	—		—			—			—			4,328			4,328
Interest rate swap, net of $15 income tax	—		—			—			—			(27		)	(27		)
Balance at August 31, 2017, as restated	25,961		$	25,961		$	36,391		$	511,530		$	(24,793	)	$	549,089

The accompanying notes are an integral part of the condensed consolidated financial statements.

8

AZZ Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. The Company and Basis of Presentation

AZZ Inc. (“AZZ”, the “Company”, "our" or “we”) was established in 1956 and incorporated under the laws of the State of Texas. We are a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. We have two distinct operating segments: the Energy Segment and Metal Coatings Segment. AZZ Metal Coatings is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.

As of March 1, 2017, our Galvanizing Segment was rebranded to the Metal Coatings Segment to more closely align the description of the segment with its current offerings and served markets. There have been no changes to the underlying information reported under this operating segment for prior periods, however, the new description will be included in the operating results for future filings and include the new powder coating offerings for the current and future periods.

Presentation

The accompanying condensed consolidated balance sheet as of February 28, 2017, which was derived from audited restated financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 28, 2017, included in the Company’s Annual Report on Form 10-K/A covering such period. 

Our fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ended February 28, 2018 is referred to as fiscal 2018.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial position of the Company as of August 31, 2017, the results of its operations for the three and six months ended August 31, 2017 and 2016, and cash flows for the six months ended August 31, 2017 and 2016. These interim results are not necessarily indicative of results for a full year.

Accounting Standards Recently Adopted

In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred taxes in a classified statement of financial position and was adopted by the Company on March 1, 2017. As a result of the adoption, the Company is required to offset deferred tax liabilities and assets, as well as any related valuation allowance, and present as a single non-current amount. However, the Company shall not offset deferred tax liabilities and assets attributable to different tax-paying components of the entity or to different tax jurisdictions. The adoption was on a prospective basis and therefore had no impact on prior year.

New Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires a lessee to recognize a liability to make lease payments and a right-of-use asset representing a right to use the underlying asset for the lease term on the balance sheet. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

9

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", issued as a new Topic, Accounting Standards Codification (ASC) Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. This ASU is effective for public entities for reporting periods beginning after December 15, 2017. This standard will be effective for the Company beginning in fiscal 2019. The Company is planning on adopting this standard retrospectively. We believe this standard will impact the timing of revenue recognition for contracts which contain multiple performance obligations with revenue recognized over time, however the overall impact to the prior year financial results is still under review.

2. Restatement of Previously Issued Financial Statements

As previously disclosed, the Company determined that for certain contracts within its Energy Segment for which revenue was historically recognized upon contract completion and transfer of title, the Company instead should have applied the percentage-of-completion method in accordance with the FASB’s Accounting Standards Codification No. 605-35, Construction-Type and Production-Type Contracts. In general, the percentage-of-completion method results in a revenue recognition pattern over time as a project progresses as opposed to deferring revenues until contract completion.

The Company concluded that the impact of applying the percentage-of-completion method to its revenue contracts was materially different from its previously reported results under its historical practice. As a result, the Company is restating its condensed consolidated financial statements for the periods impacted. The following financial tables reconcile the previously reported amounts to the restated amounts for each condensed consolidated financial statement.

The table below sets forth the condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	August 31, 2017
	As Reported		Correction			As Restated
Assets
Inventories - net	$	144,008	$	(35,555	)	$	108,453
Costs and estimated earnings in excess of billings on uncompleted contracts	32,082		33,736			65,818
Total current assets	325,007		(1,819		)	323,188
Total assets	$	1,011,401	$	(1,819	)	$	1,009,582
Liabilities and Shareholders’ Equity
Other accrued liabilities	$	20,085	$	1,505		$	21,590
Customer deposits	25,951		(24,345		)	1,606
Billings in excess of costs and estimated earnings on uncompleted contracts	6,708		14,979			21,687
Total current liabilities	126,273		(7,861		)	118,412
Deferred income tax liabilities	52,293		2,266			54,559
Total liabilities	466,088		(5,595		)	460,493
Shareholders’ equity:
Retained earnings	507,754		3,776			511,530
Total shareholders’ equity	545,313		3,776			549,089
Total liabilities and shareholders' equity	$	1,011,401	$	(1,819	)	$	1,009,582

10

The table below sets forth the condensed consolidated statements of income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands, except per share data):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	190,407	$	5,922	$	196,329	$	195,045	$	5,745	$	200,790
Cost of Sales	148,938		3,591		152,529		153,159		5,527		158,686
Gross Profit	41,469		2,331		43,800		41,886		218		42,104
Operating Income	15,056		2,331		17,387		14,889		218		15,107
Income Before Income Taxes	11,396		2,331		13,727		11,185		218		11,403
Income Tax Expense	3,067		874		3,941		1,162		82		1,244
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Earnings Per Common Share
Basic Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.39	$	—	$	0.39
Diluted Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.38	$	0.01	$	0.39

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	398,958	$	2,654	$	401,612	$	437,712	$	13,444	$	451,156
Cost of Sales	308,223		2,207		310,430		332,499		11,425		343,924
Gross Profit	90,735		447		91,182		105,213		2,019		107,232
Operating Income	36,963		447		37,410		49,397		2,019		51,416
Income Before Income Taxes	30,128		447		30,575		42,000		2,019		44,019
Income Tax Expense	8,559		168		8,727		10,914		757		11,671
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Earnings Per Common Share
Basic Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.20	$	0.05	$	1.25
Diluted Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.19	$	0.05	$	1.24

The table below sets forth the condensed consolidated statements of comprehensive income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Comprehensive Income	13,641		1,457		15,098		10,214		136		10,350

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Comprehensive Income	25,870		279		26,149		33,742		1,262		35,004

11

The table below sets forth the condensed consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Six Months Ended August 31,
	2017									2016
	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Cash flows from operating activities:
Net income	$	21,569		$	279		$	21,848		$	31,086		$	1,262		$	32,348
Deferred income taxes	682			168			850			1,509			757			2,266
Inventories	(19,658		)	6,354			(13,304		)	(15,832		)	12,565			(3,267		)
Net change in billings related to costs and estimated earnings on uncompleted contracts	(16,487		)	2,290			(14,197		)	8,028			(9,902		)	(1,874		)
Other accrued liabilities and income taxes payable	(1,651		)	(9,091		)	(10,742		)	(6,279		)	(4,682		)	(10,961		)
Net cash provided by operating activities:	$	2,785		$	—		$	2,785		$	50,028		$	—		$	50,028

The restatement had no impact on cash flows from investing activities or financing activities.

The table below sets forth the condensed consolidated statement of shareholders' equity, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Retained Earnings		Total Stockholders' Equity
Balance at August 31, 2017, as reported	$	507,754	$	545,313
Correction	3,776		3,776
Balance at August 31, 2017, as restated	$	511,530	$	549,089

In addition to the restated consolidated financial statements, the information contained in Notes 3 and 5 has been restated.

12

3. Earnings Per Share

Earnings per share is based on the weighted average number of shares outstanding during each period, adjusted for the dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended August 31,				Six Months Ended August 31,
	2017		2016		2017		2016
	(Restated)		(Restated)		(Restated)		(Restated)
Numerator:
Net income for basic and diluted earnings per common share	$	9,786	$	10,159	$	21,848	$	32,348
Denominator:
Denominator for basic earnings per common share–weighted average shares	25,970		25,987		25,991		25,950
Effect of dilutive securities:
Employee and director stock awards	66		132		74		131
Denominator for diluted earnings per common share	26,036		26,119		26,065		26,081
Earnings per share basic and diluted:
Basic earnings per common share	$	0.38	$	0.39	$	0.84	$	1.25
Diluted earnings per common share	$	0.38	$	0.39	$	0.84	$	1.24

4. Share-based Compensation

The Company has one share-based compensation plan, the 2014 Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the growth and prosperity of the Company by permitting the Company to grant to its employees, directors and advisors various types of restricted stock unit awards, performance share units, stock options, and stock appreciation rights to purchase common stock of the Company. The maximum number of shares that may be issued under the Plan is 1,500,000 shares. As of August 31, 2017, the Company has approximately 1,305,632 shares available for future issuance under the Plan.

Restricted Stock Unit Awards

Restricted stock unit awards are valued at the market price of our common stock on the grant date. Awards issued prior to fiscal 2015 generally have a three year cliff vesting schedule and awards issued subsequent to fiscal 2015 generally vest ratably over a period of three years but these awards may vest early in accordance with the Plan’s accelerated vesting provisions.

The activity of our non-vested restricted stock unit awards for the six month period endedAugust 31, 2017 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	134,547		$	51.10
Granted	45,613		60.00
Vested	(61,361	)	47.09
Forfeited	(4,021	)	55.50
Non-Vested Balance as of August 31, 2017	114,778		$	56.63

13

Performance Share Unit Awards

Performance share unit awards are valued at the market price of our common stock on the grant date. These awards have a three year performance cycle and will vest and become payable, if at all, on the third anniversary of the award date. The awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods. In addition, a multiplier may be applied to the total awards granted which is based on the Company’s total shareholder return during such three year period in comparison to a defined specific industry peer group as set forth in the plan.The activity of our non-vested performance share unit awards for the six month period endedAugust 31, 2017 is as follows:

	Performance Stock Units		Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	51,426		$	51.70
Granted	25,634		60.20
Vested	—		—
Forfeited	(2,631	)	27.25
Non-Vested Balance as of August 31, 2017	74,429		$	54.53

Stock Appreciation Rights

Stock appreciation rights are granted with an exercise price equal to the market value of our common stock on the date of grant. These awards generally have a contractual term of 7 years and vest ratably over a period of three years although some may vest immediately on issuance. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company’s stock appreciation rights activity for the six month period endedAugust 31, 2017 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 28, 2017	170,139		$	42.02
Granted	—		—
Exercised	(4,479	)	42.54
Forfeited	(2,145	)	45.36
Outstanding as of August 31, 2017	163,515		$	41.96
Exercisable as of August 31, 2017	153,515		$	41.75

The average remaining contractual term for those stock appreciation rights outstanding at August 31, 2017 is 3.02 years, with an aggregate intrinsic value of $1.1 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of August 31, 2017 is 3.01 years, with an aggregate intrinsic value of $1.1 million.

Employee Stock Purchase Plan

The Company also has an employee stock purchase plan, which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of 24 months (the "offering period"). On the first day of an offering period (the “enrollment date”) the participant is granted the option to purchase shares on each exercise date at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. The participant’s right to purchase common stock under the plan is restricted to no more than $25,000 per calendar year and the participant may not purchase more than 5,000 shares during any offering period. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period. The fair value of the estimated number of shares to be issued under each offering is determined using the Black-Scholes option pricing model. For the six month period endedAugust 31, 2017, the Company issued 35,447 shares under the Employee Stock Purchase Plan.

14

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows (in thousands):

Six months ended August 31,	2017		2016
Compensation Expense	$	3,400	$	3,198
Income tax benefits	$	1,088	$	1,023

Unrecognized compensation cost related to restricted stock units, performance share unit awards, stock appreciation rights, and the employee stock purchase plan at August 31, 2017 totals $8.6 million.

The Company’s policy is to issue shares required under these plans from the Company’s treasury shares or from the Company’s authorized but unissued shares.

5. Segments

Information regarding operations and assets by segment was as follows (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net Sales:
Energy	$	97,299		$	103,346		$	210,504		$	249,147
Metal Coatings	99,030			97,444			191,108			202,009
Total net sales	196,329			200,790			401,612			451,156
Operating Income:
Energy	2,363			8,413			9,074			28,967
Metal Coatings	23,409			15,032			44,651			39,334
Corporate	(8,385		)	(8,338		)	(16,315		)	(16,885		)
Total operating income	17,387			15,107			37,410			51,416
Interest expense	3,400			3,580			6,760			7,505
Net loss on sale of property, plant and equipment and insurance proceeds	654			192			554			82
Other income, net	(394		)	(68		)	(479		)	(190		)
Income before income taxes	$	13,727		$	11,403		$	30,575		$	44,019
	As of
	August 31, 2017			February 28, 2017
	(Restated)
Total Assets:
Energy	$	549,216		$	536,557
Metal Coatings	449,228			428,330
Corporate	11,138			13,467
	$	1,009,582		$	978,354

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Financial Information About Geographical Areas

Below is a breakdown of selected financial information by geographical area (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net Sales:
U.S.	$	162,594		$	146,783		$	329,323		$	308,881
International	33,839			54,163			72,393			142,970
Eliminations	(104		)	(156		)	(104		)	(695		)
Total Net Sales	$	196,329		$	200,790		$	401,612		$	451,156

	August 31, 2017		February 28, 2017
Property, Plant and Equipment, Net:
U.S.	$	206,298	$	205,079
Canada	18,169		18,002
Other Countries	5,847		5,529
Total Property, Plant and Equipment, Net	$	230,314	$	228,610

6. Warranty Reserves

A reserve has been established to provide for the estimated future cost of warranties on a portion of the Company’s delivered products and is classified within accrued liabilities on the consolidated balance sheet. Management periodically reviews the reserves and makes adjustments accordingly. Warranties cover such factors as non-conformance to specifications and defects in material and workmanship. The following table shows changes in the warranty reserves since the end of fiscal 2017 (in thousands):

	Warranty Reserve
Balance at February 28, 2017	$	2,098
Warranty costs incurred	(993		)
Additions charged to income	695
Balance at August 31, 2017	$	1,800

7. Debt

Our debt consisted of the following (in thousands):

	As of
	August 31, 2017			February 28, 2017
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	14,286			28,571
Term Note, due in quarterly installments beginning in June 2013 through March 2018	—			49,219
Revolving line of credit with bank	163,000			69,500
Total debt	302,286			272,290
Unamortized debt issuance costs for Senior Notes and Term Note	(478		)	(861		)
Total debt, net	301,808			271,429
Less amount due within one year	(14,286		)	(16,629		)
Debt due after one year, net	$	287,522		$	254,800

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On March 21, 2017, we executed the Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with Bank of America and other lenders. The 2017 Credit Agreement amended the Credit Agreement entered into on March 27, 2013 by the following: (i) extending the maturity date until March 21, 2022, (ii) providing for a senior revolving credit facility in a principal amount of up to $450 million, with an additional $150 million accordion, (iii) including a $75 million sublimit for the issuance of standby and commercial letters of credit, (iv) including a $30 million sublimit for swing line loans, (v) restricting indebtedness incurred in respect of capital leases, synthetic lease obligations and purchase money obligations not to exceed $20 million, (vi) restricting investments in any foreign subsidiaries not to exceed $50 million in the aggregate, and (vii) including various financial covenants and certain restricted payments relating to dividends and share repurchases as specifically set forth in the 2017 Credit Agreement. The balance due on the $75.0 million term facility under the previous Credit Agreement was paid in full as a result of the execution of the 2017 Credit Agreement. The financial covenants, as defined in the 2017 Credit Agreement, require us to maintain on a consolidated basis a Leverage Ratio not to exceed 3.25:1.0 and an Interest Coverage Ratio of at least 3.00:1.0. The 2017 Credit Agreement will be used to finance working capital needs, capital improvements, dividends, future acquisitions, letter of credit needs and share repurchases.

Interest rates for borrowings under the 2017 Credit Agreement are based on either a Eurodollar Rate or a Base Rate plus a margin ranging from 0.875% to 1.875% depending on our Leverage Ratio (as defined in the 2017 Credit Agreement). The Eurodollar Rate is defined as LIBOR for a term equivalent to the borrowing term (or other similar interbank rates if LIBOR is unavailable). The Base Rate is defined as the highest of the applicable Fed Funds rate plus 0.50%, the Prime rate, or the Eurodollar Rate plus 1.0% at the time of borrowing. The 2017 Credit Agreement also carries a Commitment Fee for the unfunded portion ranging from 0.175% to 0.30% per annum, depending on our Leverage Ratio.    

8. Acquisitions

On June 30, 2017, we completed the acquisition of the assets of Enhanced Powder Coating Ltd., (“EPC”), a privately held, high specification, National Aerospace and Defense Contractors Accreditation Program, ("NADCAP"), certified provider of powder coating, plating and anodizing services based in Gainesville, Texas. EPC, founded in 2003, offers a full spectrum of finish technology including powder coating, abrasive blasting and plating for heavy industrial, transportation, aerospace and light commercial industries. The acquisition of EPC is consistent with our strategic initiative to grow our Metal Coatings segment with products and services that complement our industry-leading galvanizing business.

9. Subsequent Events

On September 6, 2017, we completed the acquisition of all the assets and outsanding shares of Powergrid Solutions, Inc. ("PSI"), a privately held company, based in Oshkosh, Wisconsin. PSI designs, engineers and manufactures customized low and medium-voltage power quality, power generation and distribution equipment. PSI’s product portfolio includes metal-enclosed, metal-clad and padmount switchgear, serving the utility, commercial, industrial and renewable energy markets since 1982. The acquisition of PSI is a key addition to our electrical switchgear portfolio. The addition of PSI’s low-voltage and padmount switchgear allows AZZ to offer a comprehensive portfolio of customized switchgear solutions to both existing and new customers in a diverse set of industries.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD LOOKING STATEMENTS

Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. In addition, certain factors could affect the outcome of the matters described herein. This Quarterly Report on Form 10-Q/A may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand and response to products and services offered by AZZ, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets, and the hot dip galvanizing markets; prices and raw material cost, including zinc and natural gas which are used in the hot dip galvanizing process; changes in the political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer requested delays of shipments, acquisition opportunities, currency exchange rates, adequacy of financing, and availability of experienced management and employees to implement AZZ’s continued growth strategy; a downturn in market conditions in any industry relating to the products we inventory or sell or the services that we provide; the continuing economic volatility in the U.S. and other markets in which we operate; acts of war or terrorism inside the United States or abroad; natural disasters in the countries in which we operate; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business in AZZ’s Annual Report on Form 10-K/A for the fiscal year ended February 28, 2017 and other filings with the SEC, available for viewing on AZZ’s website at www.azz.com and on the SEC’s website at www.sec.gov.

You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. These statements are based on information as of the date hereof and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

The following discussion should be read in conjunction with management’s discussion and analysis contained in our Annual Report on Form 10-K/A for the fiscal year ended February 28, 2017, and with the condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q/A.

Restatement of Previously Issued Financial Statements

As previously disclosed, we determined that for certain contracts within our Energy Segment for which revenue was historically recognized upon contract completion and transfer of title, we instead should have applied the percentage-of-completion method in accordance with the FASB’s Accounting Standards Codification No. 605-35, Construction-Type and Production-Type Contracts. In general, the percentage-of-completion method results in a revenue recognition pattern over time as a project progresses as opposed to deferring revenues until contract completion.

We concluded that the impact of applying the percentage-of-completion method to our revenue contracts was materially different from its previously reported results under our historical practice. As a result, we are restating our consolidated financial statements for the periods impacted. See Note 2 to the Condensed Consolidated Financial Statements within Item 1 for additional information and a reconciliation of the previously reported amounts to the restated amounts.

RESULTS OF OPERATIONS

We have two distinct operating segments, the Energy Segment and the Metal Coatings Segment, as defined in our Annual Report on Form 10-K/A for the fiscal year ended February 28, 2017. Management believes that the most meaningful analysis of our results of operations is to analyze our performance by segment. We use revenue and operating income by segment to evaluate our segments. Segment operating income consists of net sales less cost of sales and selling, general and administrative expenses that are specifically identifiable to a segment. For a reconciliation of segment operating income to income before income taxes, see Note 5 to our quarterly consolidated financial statements included in this Quarterly Report on Form 10-Q/A.

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Orders and Backlog

Our entire backlog relates to our Energy Segment and was $300.1 million as of August 31, 2017, a decrease of $17.8 million, or 5.6%, as compared to $317.9 million as of February 28, 2017. Our backlog decreased $15.4 million, or 4.9%, as compared to the same period in the prior fiscal year. Both of these decreases were primarily the result of a softer market in the first half of fiscal 2018. For the three months ended August 31, 2017, our book-to-bill ratio increased to 0.97 to 1 from 0.96 to 1 when compared to same period of fiscal 2017 and our incoming orders decreased by $3.7 million, or 1.9%. The table below includes the progression of the backlog:

Backlog Table

(in thousands)(unaudited)

(Restated)

	Period Ended			Period Ended
Backlog	2/28/2017	$	317,922	02/29/2016	$	310,623
Bookings		193,754			250,479
Acquired Backlog		—			11,903
Shipments		205,283			250,366
Backlog	5/31/2017	306,393		5/31/2016	322,639
Book to Ship Ratio		0.94			1.00
Bookings		190,055			193,712
Shipments		196,329			200,790
Backlog	8/31/2017	300,119		8/31/2016	315,561
Book to Ship Ratio		0.97			0.96

Segment Revenues

For the three and six months ended August 31, 2017, consolidated revenues decreased $4.5 million, or 2.2%, and $49.5 million, or 11.0% as compared to the same period in fiscal 2017.

The following table reflects the breakdown of revenue by segment:

	Three Months Ended August 31,				Six Months Ended August 31,
	2017		2016		2017		2016
	(Restated)		(Restated)		(Restated)		(Restated)
	(In thousands)(unaudited)
Revenue:
Energy	$	97,299	$	103,346	$	210,504	$	249,147
Metal Coatings	99,030		97,444		191,108		202,009
Total Revenue	$	196,329	$	200,790	$	401,612	$	451,156

Revenues for the Energy Segment decreased 5.9% for the three months ended August 31, 2017, to $97.3 million as compared to the same period in fiscal 2017. The decrease in revenue during the second quarter was caused by several factors including reduced turnarounds in the U.S. refinery market, continued softness in the petrochemical market, and delays in the release of several large projects in the U.S. and overseas. Revenues decreased 15.5% for the six months ended August 31, 2017, to $210.5 million as compared to the same period in fiscal 2017, primarily on the turnaround softness in the first half of the year and the effects of the nuclear market from the Westinghouse bankruptcy filed on March 29, 2017.

Revenues for the Metal Coatings Segment increased 1.6% for the three months ended August 31, 2017, to $99.0 million as compared to the same period in fiscal 2017. The increase was a result of slightly higher volumes in steel processed during the period. Revenues decreased 5.4% for the six months ended August 31, 2017, to $191.1 million as compared to the same period in fiscal 2017. The decline in revenue was a result of a volume decrease in steel processed caused by softness in the solar, petrochemical, and the oil and gas markets.

Segment Operating Income

19

Operating income for the Energy Segment decreased by $6.1 million, or 71.9%, to $2.4 million for the three months ended August 31, 2017 as compared to the same period in fiscal 2017. This decrease is attributable to the reduction in refinery turnarounds described above, which typically carry a higher margin, coupled with generally lower margin projects in the balance of the segment. Operating income decreased $19.9 million, or 68.7%, to $9.1 million for the six months ended August 31, 2017 as compared to the same period in fiscal 2017. This decrease is attributable to the same impact of the market as discussed for the quarterly comparison.

Operating income for the Metal Coatings Segment increased by $8.4 million, or 55.7%, for the three months ended August 31, 2017 as compared to the same period in fiscal 2017 that included $7.3 million in realignment charges. Excluding the realignment charges, the remainder of the increase was attributable to higher volumes in the second quarter of fiscal 2018. Operating income increased by $5.3 million, or 13.5%, for the six months ended August 31, 2017 as compared to the same period of fiscal 2017. Excluding the impact of the realignment charges taken in the second quarter of fiscal 2017, the decrease is attributable to lower volumes in the first half of fiscal 2018.

Corporate Expenses

Corporate expenses were relatively flat for the three months ended August 31, 2017 as compared to the same period in fiscal 2017. Corporate expenses decreased $0.6 million, or 3.4%, for the six months ended August 31, 2017 as compared to the same period in fiscal 2017. This decrease is primarily attributable to lower employee performance based incentive compensation costs in fiscal 2018.

Interest Expense

Interest expense for the three and six month periods ended August 31, 2017 was $3.4 million and $6.8 million, respectively. Interest expense for the three and six month periods ended August 31, 2016 was $3.6 million and $7.5 million, respectively. The decrease in interest expense in comparison to the same respective periods in the prior year was the result of a lower average outstanding debt balance. As of August 31, 2017, our gross outstanding debt was $302.3 million, compared to $302.5 million outstanding as of August 31, 2016. Our gross debt to equity ratio was 0.55 to 1 as of August 31, 2017, compared to 0.59 to 1 as of August 31, 2016.

Net Loss On Sale of Property, Plant and Equipment and Insurance Proceeds

For the three and six months ended August 31, 2017 , the amounts recorded were primarily driven from the realized loss from a property sale. For the three and six months ended August 31, 2016, the amounts recorded were insignificant.

Other Income, Net

For the three and six months ended August 31, 2017 and 2016, the amounts recorded to other income were insignificant and primarily attributable to foreign exchange transactions and royalty income.

Income Taxes

The provision for income taxes reflects an effective tax rate of 28.7% and 28.5% for the three and six months ended August 31, 2017, respectively, as compared to 10.9% and 26.5% for the same respective periods in fiscal 2017. The increase in the rate for the three month period ended August 31, 2017 is attributable to the early adoption of ASU 2016-09 and state tax benefits from realignment costs incurred during the second quarter of fiscal 2017 and overall timing of stock compensation awards. The increase in the rate for the six month period ended August 31, 2017 is attributable to the early adoption of ASU 2016-09 in fiscal 2017 and overall timing of stock compensation awards during the second quarter of fiscal 2017.

Westinghouse Electric Company Bankruptcy Case

The Calvert Company, Inc. and Nuclear Logistics LLC, have existing contracts with subsidiaries of Westinghouse Electric Company (“WEC”). WEC and the relevant subsidiaries filed relief under Chapter 11of the Bankruptcy Code on March 29, 2017 in the United States Bankruptcy Court for the Southern District of New York, jointly administered as In re Westinghouse Electric Company, et al., Case No. 17-10751 (the "Bankruptcy Case").  To date, WEC has continued to operate under a Debtor-in-Possession Financing Facility and our subsidiaries continue to honor their executory contracts. Work continues on the Vogtle project, however, work has been halted by ownership at VC Summer.  The Company has been collecting on post-petition amounts due and owed. The Company estimates it had approximately $7.2 million mostly in pre-petition exposure with WEC to the Company’s two subsidiaries as of March 29, 2017.

20

LIQUIDITY AND CAPITAL RESOURCES

We have historically met our cash needs through a combination of cash flows from operating activities along with bank and bond market debt. Our cash requirements are generally for operating activities, cash dividend payments, capital improvements, debt repayment, acquisitions and share repurchases. We believe that our cash position, cash flows from operating activities and our expectation of continuing availability to draw upon our credit facilities are sufficient to meet our cash flow needs for the foreseeable future.

For the six month period endedAugust 31, 2017, net cash provided by operating activities was $2.8 million, net cash used in investing activities was $26.7 million, net cash provided by financing activities was $16.0 million, and an increase of $0.2 million from the net effect of exchange rate changes on cash resulting in a net decrease in cash and cash equivalents of $7.8 million. In comparison to fiscal 2017, the results in the statement of cash flows for operating activities for the six months ended August 31, 2017, are attributable to a decrease in net income and a less favorable impact of changes in working capital. The Company's use of cash for investing activities was lower due to reduced spending for acquisitions year over year and lower capital expenditures. Cash provided by financing activities was higher during the six months ended August 31, 2017 due to increased net borrowings, which was partially offset by purchases of treasury shares.

Our working capital was $204.8 million as of August 31, 2017, as compared to $166.2 million at August 31, 2016.

On March 21, 2017, we executed the Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with Bank of America and other lenders. The 2017 Credit Agreement amended the Credit Agreement entered into on March 27, 2013 by the following: (i) extending the maturity date until March 21, 2022, (ii) providing for a senior revolving credit facility in a principal amount of up to $450 million, with an additional $150 million accordion, (iii) including a $75 million sublimit for the issuance of standby and commercial letters of credit, (iv) including a $30 million sublimit for swing line loans, (v) restricting indebtedness incurred in respect of capital leases, synthetic lease obligations and purchase money obligations not to exceed $20 million, (vi) restricting investments in any foreign subsidiaries not to exceed $50 million in the aggregate, and (vii) including various financial covenants and certain restricted payments relating to dividends and share repurchases as specifically set forth in the 2017 Credit Agreement. The financial covenants, as defined in the 2017 Credit Agreement, require us to maintain on a consolidated basis a Leverage Ratio not to exceed 3.25:1.0 and an Interest Coverage Ratio of at least 3.00:1.0. The 2017 Credit Agreement will be used to finance working capital needs, capital improvements, dividends, future acquisitions, letter of credit needs and share repurchases.

Interest rates for borrowings under the 2017 Credit Agreement are based on either a Eurodollar Rate or a Base Rate plus a margin ranging from 0.875% to 1.875% depending on our Leverage Ratio (as defined in the Credit Agreement). The Eurodollar Rate is defined as LIBOR for a term equivalent to the borrowing term (or other similar interbank rates if LIBOR is unavailable). The Base Rate is defined as the highest of the applicable Fed Funds rate plus 0.50%, the Prime rate, or the Eurodollar Rate plus 1.0% at the time of borrowing. The Credit Agreement also carries a Commitment Fee for the unfunded portion ranging from 0.175% to 0.30% per annum, depending on our Leverage Ratio.

As of August 31, 2017, we had $163.0 million of outstanding debt against the revolving credit facility provided and letters of credit outstanding in the amount of $23.2 million, which left approximately $263.8 million of additional credit available under the 2017 Credit Agreement.

On March 31, 2008, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) pursuant to which the Company issued $100.0 million aggregate principal amount of its 6.24% unsecured Senior Notes (the “2008 Notes”) due March 31, 2018 through a private placement (the “2008 Note Offering”). Pursuant to the Note Purchase Agreement, the Company’s payment obligations with respect to the 2008 Notes may be accelerated upon any Event of Default, as defined in the Note Purchase Agreement.

The Company entered into an additional Note Purchase Agreement on January 21, 2011 (the “2011 Agreement”), pursuant to which the Company issued $125.0 million aggregate principal amount of its 5.42% unsecured Senior Notes (the “2011 Notes”), due in January of 2021, through a private placement (the “2011 Note Offering”). Pursuant to the 2011 Agreement, the Company's payment obligations with respect to the 2011 Notes may be accelerated under certain circumstances.

The 2008 Notes and the 2011 Notes each provide for various financial covenants requiring us, among other things, to a) maintain on a consolidated basis net worth (as defined in the Note Purchase Agreement) equal to at least the sum of $116.9 million plus 50.0% of future net income; b) maintain a ratio of indebtedness to EBITDA (as defined in Note Purchase Agreement) not to exceed 3.25:1.00; c) maintain on a consolidated basis a Fixed Charge Coverage Ratio (as defined in the Note Purchase Agreement) of at least 2.0:1.0; d) not at any time permit the aggregate amount of all Priority Indebtedness (as defined in the Note Purchase Agreement) to exceed 10.0% of Consolidated Net Worth.

21

As of August 31, 2017, the Company is in compliance with all of its debt covenants.

Historically, we have not experienced a significant impact on our operations from increases in general inflation other than for specific commodities. We have exposure to commodity price increases in both segments of our business, primarily copper, aluminum, steel and nickel based alloys in the Energy Segment and zinc and natural gas in the Metal Coatings Segment. We attempt to minimize these increases through escalation clauses in customer contracts for copper, aluminum, steel and nickel based alloys, when market conditions allow and through fixed cost contract purchases on zinc. In addition to these measures, we attempt to recover other cost increases through improvements to our manufacturing process, supply chain management, and through increases in prices where competitively feasible.

OFF BALANCE SHEET TRANSACTIONS AND RELATED MATTERS

Other than operating leases discussed below, there are no off-balance sheet transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have, or may have, a material effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources of the Company.

CONTRACTUAL COMMITMENTS

Leases

We lease various facilities under non-cancelable operating leases with an initial term in excess of one year.

Commodity pricing

The Company manages its exposure to commodity prices through the use of the following:

In the Energy Segment, we have exposure to commodity pricing for copper, aluminum, steel, and nickel based alloys. Because the Energy Segment does not commit contractually to minimum volumes, increases in price for these items are normally managed through escalation clauses in customer contracts, although during difficult market conditions these escalation clauses may not be obtainable. In addition, we attempt to enter into firm pricing contracts with our vendors on material at the time we receive orders from our customers to minimize risk.

In the Metal Coatings Segment, we utilize contracts with our zinc suppliers that include protective caps and fixed cost contracts to guard against rising zinc prices. We also secure firm pricing for natural gas supplies with individual utilities when possible. Management believes these agreements ensure adequate supplies and partially offset exposure to commodity price swings.

We have no contracted commitments for any commodities including steel, aluminum, natural gas, nickel based alloys, copper, zinc or any other commodity, except for those entered into under the normal course of business.

Other

As of August 31, 2017, we had outstanding letters of credit in the amount of $23.2 million.  These letters of credit are issued for a number of reasons, but are most commonly issued in lieu of customer retention withholding payments covering warranty or performance periods.

The following summarizes our operating leases, debt principal payments, and interest payments for the remainder of the next five years and beyond.

	Operating Leases		Long-Term Debt		Interest		Total
Fiscal:	(In thousands)
2018	$	3,501	$	—	$	6,392	$	9,893
2019	6,627		14,286		12,339		33,252
2020	5,502		—		11,893		17,395
2021	4,804		125,000		11,893		141,697
2022	4,699		—		5,118		9,817
Thereafter	21,828		163,000		525		185,353
Total	$	46,961	$	302,286	$	48,160	$	397,407

22

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Market risk affecting our operations results primarily from changes in interest rates and commodity prices. We have only limited involvement with derivative financial instruments and are not a party to any leveraged derivatives.

In the Energy Segment, we have exposure to commodity pricing for copper, aluminum, steel and nickel based alloys. Increases in price for these items are normally managed through escalation clauses in our customers' contracts, although during difficult market conditions customers' may resist these escalation clauses. In addition, we attempt to enter into firm pricing contracts with our vendors on material at the time we receive orders from our customers to minimize risk. We manage our exposures to commodity prices, primarily zinc used in our Metal Coatings Segment, by utilizing agreements with zinc suppliers that include protective caps and fixed contracts to guard against escalating commodity prices. We also secure firm pricing for natural gas supplies with individual utilities when possible. We believe these agreements ensure adequate supplies and partially offset exposure to commodity price escalation.

As of August 31, 2017, the Company had exposure to foreign currency exchange rates related to our operations in Canada, China, Brazil, Poland, and the Netherlands.

We do not believe that a hypothetical change of 10% of the interest rates or currency exchange rates that are currently in effect or a change of 10% of commodity prices would have a significant adverse effect on our results of operations, financial position, or cash flows as long as we are able to pass along the increases in commodity prices to our customers. However, there can be no assurance that either interest rates, exchange rates or commodity prices will not change in excess of the 10% hypothetical amount or that we would be able to pass along rising costs of commodity prices to our customers, and such hypothetical change could have an adverse effect on our results of operations, financial position, and cash flows.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, management of the Company has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, due to the material weakness described below, the Company's disclosure controls and procedures were not effective as of the end of the period covered by this Form 10-Q/A to provide reasonable assurance that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and were not effective as of the end of the period covered by this Form 10-Q/A to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely discussions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

Subsequent to filing the Company’s quarterly report on Form 10-Q for the period ended August 31, 2017, an error was discovered related to the Company’s historical revenue recognition policies and procedures. In particular, the Company determined that for certain contracts within its Energy Segment for which revenue was historically recognized upon contract completion and transfer of title, the Company instead should have applied the percentage-of-completion method in accordance with the FASB’s Accounting Standards Codification No. 605-35, Construction-Type and Production-Type Contracts. This error resulted in a material misstatement of the financial statements and required restatement of the financial statements included in the Company’s Form 10-K for the fiscal year ended February 28, 2017 and in the Company’s Form 10-Q for the quarterly periods ended May 31, 2017 and August 31, 2017. This error, which was not detected timely by management, was the result of inadequate design of controls pertaining to the Company’s review and ongoing monitoring of its revenue recognition policies. The deficiency represents a material weakness in the Company’s internal control over financial reporting.

Management is actively engaged in the planning for, and implementation of, remediation efforts to address the material weakness identified above. The remediation plan includes i) the implementation of new controls designed to evaluate the appropriateness of revenue recognition policies and procedures, ii) new controls over recording revenue transactions, and iii) additional training.

Management believes the measures described above and others that may be implemented will remediate the material weaknesses that we have identified. As management continues to evaluate and improve internal control over financial reporting, we may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures identified.

23

Subject to these remediation efforts, that were implemented after August 31, 2017, there have been no significant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On January 11, 2018, Logan Mullins, acting on behalf of himself and a putative class of persons who purchased or otherwise acquired the Company's securities between April 22, 2015 and January 8, 2018, filed a class action complaint in the U.S. District Court for the Northern District of Texas against the Company and two of its executive officers, Thomas E. Ferguson and Paul W. Fehlman. Logan Mullins v. AZZ, Inc., et al., Case No. 4:18-cv-00025-Y. The complaint alleges, among other things, that the Company's SEC filings contained statements that were rendered materially false and misleading by the Company's alleged failure to properly recognize revenue related to certain contracts in its Energy Segment in purported violation of (1) Section 10(b) of the Exchange Act and Rule 10b-5 and (2) Section 20(a) of the Exchange Act. The plaintiffs seek an award of compensatory and punitive damages, interests, attorneys' fees and costs. The Company denies the allegations and believes it has strong defenses to vigorously contest them. The Company cannot predict the outcome of this action nor when it will be resolved. If the plaintiffs were to prevail in this matter, the Company could be liable for damages, which could potentially be material and could adversely affect its financial condition or results of operations.

In addition, the Company and its subsidiaries are named defendants in various routine lawsuits incidental to our business.  These proceedings include labor and employment claims, use of the Company’s intellectual property, worker’s compensation and various environmental  matters, all arising in the normal course of business.  Although the outcome of these lawsuits or other proceedings cannot be predicted with certainty, and the amount of any potential liability that could arise with respect to such lawsuits or other matters cannot be predicted at this time, management, after consultation with legal counsel, does not expect liabilities, if any, from these claims or proceedings, either individually or in the aggregate, to have a material effect on the Company’s financial position, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed under Part I, Item 1A of our Annual Report on Form 10-K/A for the fiscal year ended February 28, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In January of 2012, our Board authorized the repurchase of up to ten percent of the outstanding shares of our Common Stock. The share repurchase authorization does not have an expiration date, and the amount and prices paid for any future share purchases under the authorization will be based on market conditions and other factors at the time of the purchase. Repurchases under this share repurchase authorization would be made through open market purchases or private transactions in accordance with applicable federal securities laws, including Rule 10b-18 under the Exchange Act.

The following tab provides information with respect to purchases of common stock of the Company made during the three months ended August 31, 2017, by the Company or any "affiliated purchaser" as defined in Rule 10b-18(a)(3) under the Exchange act:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Jun 1, 2017 through Jun 30, 2017	—	$	—	—	1,152,800
Jul 1, 2017 through Jul 31, 2017	—	—		—	1,152,800
Aug 1, 2017 through Aug 31, 2017	50,000	50.04		50,000	1,102,800
Total	50,000	$	50.04	50,000	1,102,800

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

25

None.

Item 6. Exhibits

Exhibits Required by Item 601 of Regulation S-K.

A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits on page 28, which immediately precedes such exhibits.

26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		AZZ Inc. (Registrant)
DATE: April 19, 2018	By:	/s/ Paul W. Fehlman
		Paul W. Fehlman Senior Vice President, Chief Financial Officer

27

EXHIBIT INDEX

3.1	Amended and Restated Certificate of Formation of AZZ Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on July 14, 2015)
3.2	Amended and Restated Bylaws of AZZ Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by the Registrant on January 23, 2017)
10.1	Note Purchase Agreement dated March 31, 2008, by and among AZZ incorporated and the purchasers listed therein (incorporated by reference to Exhibit 10(1) of the Current Report on Form 8-K filed by the registrant on April 2, 2008).
10.2	AZZ incorporated Employee Stock Purchase Plan (incorporated by reference to Appendix B of the Proxy Statement for the 2008 Annual Shareholders Meeting).
10.3	Note Purchase Agreement, dated as of January 20, 2011, by and among AZZ incorporated and the purchasers identified therein (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the registrant on January 21, 2011).
10.4	Amended and Restated Credit Agreement by and between AZZ Inc. as borrower, Bank of America N.A. as Administrative Agent, Swing Line Lender and L/C Issuer, and the other Lender's party thereto (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed March 24, 2017).
10.5*	AZZ incorporated 2014 Long Term Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Form DEFA filed May 29, 2014).
10.6*	First Amendment to AZZ Inc. 2014 Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the registrant on January 21, 2016.
31.1	Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
31.2	Certification by Chief Financial Officer Certificate pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
32.1	Certification by Chief Executive Officer Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
32.2	Chief Financial Officer Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed Herewith.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Management contract, compensatory plan or arrangement.

28

EX-31.1

Exhibit 31.1

Certification by Thomas E. Ferguson

Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Thomas E. Ferguson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of AZZ Inc. for the quarterly period ended August 31, 2017;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: April 19, 2018	/s/ Thomas E. Ferguson
	Thomas E. Ferguson
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification by Paul W. Fehlman

Pursuant to Securities Exchange Act Rule 13a-14(a)

I, Paul W. Fehlman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of AZZ Inc. for the quarterly period ended August 31, 2017;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated: April 19, 2018	/s/ Paul W. Fehlman
	Paul W. Fehlman
	Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Thomas E. Ferguson, has executed this certification in connection with the filing of AZZ Inc.’s (the "Company") Quarterly Report on Form 10-Q/A for the period ended August 31, 2017 (the “Report”). The undersigned hereby certifies that pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. to my knowledge the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 19, 2018	/s/ Thomas E. Ferguson
	Thomas E. Ferguson
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Paul W. Fehlman, has executed this certification in connection with the filing of AZZ Inc.’s (the "Company") Quarterly Report on Form 10-Q/A for the period ended August 31, 2017 (the “Report”). The undersigned hereby certifies that pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. to my knowledge the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 19, 2018	/s/ Paul W. Fehlman
	Paul W. Fehlman
	Senior Vice President and
	Chief Financial Officer

XML

Document and Entity Information	6 Months Ended
	Aug. 31, 2017 shares
Document and Entity Information [Abstract]
Entity Registrant Name	AZZ INC
Entity Central Index Key	0000008947
Document Type	10-Q/A
Document Period End Date	Aug. 31, 2017
Amendment Flag	true
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--02-28
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	25,961,323
Amendment Description	Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A") amends and restates certain items noted below in the Quarterly Report on Form 10-Q of AZZ Inc. (the “Company”) for the quarter ended August 31, 2017, as originally filed with the Securities and Exchange Commission on October 3, 2017 (the “Original Filing”). This Form 10-Q/A amends the Original Filing to reflect the correction of an error in the previously reported financial statements related to the Company’s revenue recognition practices within its Energy segment. See Note 2 to the Condensed Consolidated Financial Statements included in Item 1 for additional information and a reconciliation of the previously reported amounts to the restated amounts.

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Current Assets:
Cash and Cash Equivalents	$ 3,549	$ 11,302
Accounts receivable (net of allowance for doubtful accounts of $391 as of August 31, 2017 and $347 as of February 28, 2017)	138,544	138,470
Inventories:
Raw Material	89,138	80,169
Work-In-Process	12,574	6,832
Finished Goods	6,741	7,006
Costs and Estimated Earnings In Excess of Billings On Uncompleted Contracts	65,818	50,262
Deferred Income Taxes	0	249
Prepaid Expenses and Other	6,824	2,762
Total Current Assets	323,188	297,052
Deferred Tax Assets, Net, Noncurrent	215	0
Property, Plant and Equipment, Net	230,314	228,610
Goodwill	310,032	306,579
Intangibles and Other Assets, Net	145,833	146,113
Total Assets	1,009,582	978,354
Current Liabilities:
Accounts Payable	43,698	49,816
Income Tax Payables	1,357	778
Accrued Salaries and Wages	14,188	23,429
Other Accrued Liabilities	21,590	24,042
Customer Advance Payment	1,606	1,459
Long Term Debt Due Within One Year	14,286	16,629
Billings In Excess of Costs and Estimated Earnings On Uncompleted Contracts	21,687	20,617
Total Current Liabilities	118,412	136,770
Long-Term Debt Due After One Year	287,522	254,800
Deferred Income Taxes	54,559	53,648
Liabilities	460,493	445,218
Shareholders' Equity:
Common stock, $1 par, shares authorized 100,000; 25,961 shares issued and outstanding at August 31, 2017 and 25,964 shares issued and outstanding at February 28, 2017	25,961	25,964
Capital In Excess of Par Value	36,391	37,739
Retained Earnings	511,530	498,527
Accumulated Other Comprehensive Income	(24,793)	(29,094)
Total Shareholders' Equity	549,089	533,136
Total Liabilities and Shareholders' Equity	$ 1,009,582	$ 978,354

XML

Condensed consolidated Balance Sheets (Parenthetical) - USD ($)	Aug. 31, 2017	Feb. 28, 2017
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Doubtful Accounts	$ 391,332	$ 347,349
Common Stock, Par Value (usd per share)	$ 1	$ 1
Common Stock, Shares Authorized (shares)	100,000,000	100,000,000
Common Stock, Shares Issued (shares)	25,961,323	25,963,679
Common Stock, Shares, Outstanding	25,961,323	25,963,679

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Income Statement [Abstract]
Net Sales	$ 196,329	$ 200,790	$ 401,612	$ 451,156
Costs and Expenses
Cost of Sales	152,529	158,686	310,430	343,924
Gross Profit	43,800	42,104	91,182	107,232
Selling, General and Administrative	26,413	26,997	53,772	55,816
Operating Income (Loss)	17,387	15,107	37,410	51,416
Interest Expense	3,400	3,580	6,760	7,505
Gain (Loss) on Disposition of Property Plant Equipment	(654)	(192)	(554)	(82)
Other Expense (Income) - net	(394)	(68)	(479)	(190)
Income Before Income Taxes	13,727	11,403	30,575	44,019
Income Tax Expense	3,941	1,244	8,727	11,671
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Earnings Per Common Share
Basic Earnings Per Share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.25
Diluted Earnings Per Share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.24

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Other Comprehensive Income (Loss):
Unrealized Translation Gains (Losses)	5,326	205	4,328	2,683
Interest rate swap, net of income tax of $7, $7, $15, and $15, respectively.	(14)	(14)	(27)	(27)
Other Comprehensive Income (Loss)	5,312	191	4,301	2,656
Comprehensive Income	$ 15,098	$ 10,350	$ 26,149	$ 35,004

XML

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Statement of Comprehensive Income [Abstract]
Interest rate swap, income tax	$ 7	$ 7	$ 15	$ 15

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Cash Flows From Operating Activities:
Net Income	$ 21,848	$ 32,348
Adjustments To Reconcile Net Income To Net Cash Provided By Operating Activities:
Provision For Doubtful Accounts	47	11
Amortization and Depreciation	24,984	25,370
Deferred Income Tax Expense	850	2,266
Property, Plant and Equipment, Disposals	0	6,706
Net Loss (Gain) On Insurance Settlement or On Sale of Property, Plant & Equipment	554	82
Amortization of Deferred Borrowing Costs	303	639
Share Based Compensation Expense	3,400	3,198
Effects of Changes In Assets & Liabilities:
Accounts Receivable	939	(3,247)
Inventories	(13,304)	(3,267)
Prepaid Expenses and Other	(4,021)	(3,040)
Other Assets	(1,106)	141
Net Change In Billings Related To Costs and Estimated Earnings On Uncompleted Contracts	(14,197)	(1,874)
Accounts Payable	(6,770)	1,656
Other Accrued Liabilities and Income Taxes Payable	(10,742)	(10,961)
Net Cash Provided By Operating Activities	2,785	50,028
Cash Flows Used For Investing Activities:
Proceeds From Sale Or Insurance Settlement of Property, Plant, and Equipment	177	320
Purchase of Property, Plant and Equipment	(16,636)	(19,760)
Acquisition of Subsidiaries, Net of Cash Acquired	(10,250)	(22,679)
Net Cash From Investing Activities	(26,709)	(42,119)
Cash Flows From Financing Activities:
Proceeds from revolving loan	209,000	86,000
Payments on revolving loan	(115,500)	(92,000)
Payments on Long Term Debt	(63,504)	(18,505)
Payments for Repurchase of Common Stock	(5,185)	0
Payments of Dividends	(8,845)	(7,787)
Net Cash Used In Financing Activities	15,966	(32,292)
Effect of Exchange Rate Changes on Cash	205	106
Net Increase (Decrease) In Cash & Cash Equivalents	(7,753)	(24,277)
Cash & Cash Equivalents At Beginning of Period	11,302	40,191
Cash & Cash Equivalents At End of Period	3,549	15,914
Supplemental Disclosures
Cash Paid For Interest	7,020	7,230
Cash Paid For Income Taxes	$ 7,605	$ 9,764

XML

Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Aug. 31, 2017 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Capital in Excess of Par Value	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Balance at Feb. 28, 2017	$ 533,136	$ 25,964	$ 37,739	$ 498,527	$ (29,094)
Balance (shares) at Feb. 28, 2017		25,964
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock Compensation (shares)		16
Stock Compensation	3,400	$ 16	3,384
Restricted Stock Units (shares)		42
Restricted Stock Units	(1,198)	$ 42	(1,240)
Stock Issued for Stock Appreciation Rights Shares		1
Stock Issued For Stock Appreciation Rights	0	$ 1	(1)
Employee Stock Purchase Plan (shares)		35
Employee Stock Purchase Plan	1,632	$ 35	1,597
Treasury Stock, Shares, Retired		(97)
Treasury Stock, Retired, Par Value Method, Amount	(5,185)	$ 97	5,088
Cash Dividend Paid	(8,845)			(8,845)
Net Income	21,848
Foreign Currency Translation	4,328				4,328
Interest rate swap, net of $15 income tax	(27)				(27)
Balance at Aug. 31, 2017	$ 549,089	$ 25,961	$ 36,391	$ 511,530	$ (24,793)
Balance (shares) at Aug. 31, 2017		25,961

XML

Consolidated Statement of Shareholders' Equity (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Statement of Stockholders' Equity [Abstract]
Interest rate swap, income tax	$ 7	$ 7	$ 15	$ 15

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Basis of Presentation

6 Months Ended

Aug. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The Company and Basis of Presentation

AZZ Inc. (“AZZ”, the “Company”, "our" or “we”) was established in 1956 and incorporated under the laws of the State of Texas. We are a global provider of galvanizing services, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. We have two distinct operating segments: the Energy Segment and Metal Coatings Segment. AZZ Metal Coatings is a leading provider of metal finishing solutions for corrosion protection, including hot dip galvanizing to the North American steel fabrication industry. AZZ Energy is dedicated to delivering safe and reliable transmission of power from generation sources to end customers, and automated weld overlay solutions for corrosion and erosion mitigation to critical infrastructure in the energy markets worldwide.

As of March 1, 2017, our Galvanizing Segment was rebranded to the Metal Coatings Segment to more closely align the description of the segment with its current offerings and served markets. There have been no changes to the underlying information reported under this operating segment for prior periods, however, the new description will be included in the operating results for future filings and include the new powder coating offerings for the current and future periods.

Presentation

The accompanying condensed consolidated balance sheet as of February 28, 2017, which was derived from audited restated financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These financial statements should be read in conjunction with the audited financial statements and related notes for the fiscal year ended February 28, 2017, included in the Company’s Annual Report on Form 10-K/A covering such period. 

Our fiscal year ends on the last day of February and is identified as the fiscal year for the calendar year in which it ends. For example, the fiscal year ended February 28, 2018 is referred to as fiscal 2018.

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial position of the Company as of August 31, 2017, the results of its operations for the three and six months ended August 31, 2017 and 2016, and cash flows for the six months ended August 31, 2017 and 2016. These interim results are not necessarily indicative of results for a full year.

Accounting Standards Recently Adopted

In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” ASU 2015-17 simplifies the presentation of deferred taxes in a classified statement of financial position and was adopted by the Company on March 1, 2017. As a result of the adoption, the Company is required to offset deferred tax liabilities and assets, as well as any related valuation allowance, and present as a single non-current amount. However, the Company shall not offset deferred tax liabilities and assets attributable to different tax-paying components of the entity or to different tax jurisdictions. The adoption was on a prospective basis and therefore had no impact on prior year.

New Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires a lessee to recognize a liability to make lease payments and a right-of-use asset representing a right to use the underlying asset for the lease term on the balance sheet. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact that this standard will have on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers", issued as a new Topic, Accounting Standards Codification (ASC) Topic 606 ("ASU 2014-09"). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The premise of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. This ASU is effective for public entities for reporting periods beginning after December 15, 2017. This standard will be effective for the Company beginning in fiscal 2019. The Company is planning on adopting this standard retrospectively. We believe this standard will impact the timing of revenue recognition for contracts which contain multiple performance obligations with revenue recognized over time, however the overall impact to the prior year financial results is still under review.

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Restatement of Previously Issued Financial Statements

6 Months Ended

Aug. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

Restatement of Previously Issued Financial Statements

As previously disclosed, the Company determined that for certain contracts within its Energy Segment for which revenue was historically recognized upon contract completion and transfer of title, the Company instead should have applied the percentage-of-completion method in accordance with the FASB’s Accounting Standards Codification No. 605-35, Construction-Type and Production-Type Contracts. In general, the percentage-of-completion method results in a revenue recognition pattern over time as a project progresses as opposed to deferring revenues until contract completion.

The Company concluded that the impact of applying the percentage-of-completion method to its revenue contracts was materially different from its previously reported results under its historical practice. As a result, the Company is restating its condensed consolidated financial statements for the periods impacted. The following financial tables reconcile the previously reported amounts to the restated amounts for each condensed consolidated financial statement.

The table below sets forth the condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	August 31, 2017
	As Reported		Correction			As Restated
Assets
Inventories - net	$	144,008	$	(35,555	)	$	108,453
Costs and estimated earnings in excess of billings on uncompleted contracts	32,082		33,736			65,818
Total current assets	325,007		(1,819		)	323,188
Total assets	$	1,011,401	$	(1,819	)	$	1,009,582
Liabilities and Shareholders’ Equity
Other accrued liabilities	$	20,085	$	1,505		$	21,590
Customer deposits	25,951		(24,345		)	1,606
Billings in excess of costs and estimated earnings on uncompleted contracts	6,708		14,979			21,687
Total current liabilities	126,273		(7,861		)	118,412
Deferred income tax liabilities	52,293		2,266			54,559
Total liabilities	466,088		(5,595		)	460,493
Shareholders’ equity:
Retained earnings	507,754		3,776			511,530
Total shareholders’ equity	545,313		3,776			549,089
Total liabilities and shareholders' equity	$	1,011,401	$	(1,819	)	$	1,009,582

The table below sets forth the condensed consolidated statements of income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands, except per share data):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	190,407	$	5,922	$	196,329	$	195,045	$	5,745	$	200,790
Cost of Sales	148,938		3,591		152,529		153,159		5,527		158,686
Gross Profit	41,469		2,331		43,800		41,886		218		42,104
Operating Income	15,056		2,331		17,387		14,889		218		15,107
Income Before Income Taxes	11,396		2,331		13,727		11,185		218		11,403
Income Tax Expense	3,067		874		3,941		1,162		82		1,244
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Earnings Per Common Share
Basic Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.39	$	—	$	0.39
Diluted Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.38	$	0.01	$	0.39

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	398,958	$	2,654	$	401,612	$	437,712	$	13,444	$	451,156
Cost of Sales	308,223		2,207		310,430		332,499		11,425		343,924
Gross Profit	90,735		447		91,182		105,213		2,019		107,232
Operating Income	36,963		447		37,410		49,397		2,019		51,416
Income Before Income Taxes	30,128		447		30,575		42,000		2,019		44,019
Income Tax Expense	8,559		168		8,727		10,914		757		11,671
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Earnings Per Common Share
Basic Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.20	$	0.05	$	1.25
Diluted Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.19	$	0.05	$	1.24

The table below sets forth the condensed consolidated statements of comprehensive income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Comprehensive Income	13,641		1,457		15,098		10,214		136		10,350

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Comprehensive Income	25,870		279		26,149		33,742		1,262		35,004

The table below sets forth the condensed consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Six Months Ended August 31,
	2017									2016
	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Cash flows from operating activities:
Net income	$	21,569		$	279		$	21,848		$	31,086		$	1,262		$	32,348
Deferred income taxes	682			168			850			1,509			757			2,266
Inventories	(19,658		)	6,354			(13,304		)	(15,832		)	12,565			(3,267		)
Net change in billings related to costs and estimated earnings on uncompleted contracts	(16,487		)	2,290			(14,197		)	8,028			(9,902		)	(1,874		)
Other accrued liabilities and income taxes payable	(1,651		)	(9,091		)	(10,742		)	(6,279		)	(4,682		)	(10,961		)
Net cash provided by operating activities:	$	2,785		$	—		$	2,785		$	50,028		$	—		$	50,028

The restatement had no impact on cash flows from investing activities or financing activities.

The table below sets forth the condensed consolidated statement of shareholders' equity, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Retained Earnings		Total Stockholders' Equity
Balance at August 31, 2017, as reported	$	507,754	$	545,313
Correction	3,776		3,776
Balance at August 31, 2017, as restated	$	511,530	$	549,089

In addition to the restated consolidated financial statements, the information contained in Notes 3 and 5 has been restated.

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Earnings Per Share

6 Months Ended

Aug. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Earnings per share is based on the weighted average number of shares outstanding during each period, adjusted for the dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended August 31,				Six Months Ended August 31,
	2017		2016		2017		2016
	(Restated)		(Restated)		(Restated)		(Restated)
Numerator:
Net income for basic and diluted earnings per common share	$	9,786	$	10,159	$	21,848	$	32,348
Denominator:
Denominator for basic earnings per common share–weighted average shares	25,970		25,987		25,991		25,950
Effect of dilutive securities:
Employee and director stock awards	66		132		74		131
Denominator for diluted earnings per common share	26,036		26,119		26,065		26,081
Earnings per share basic and diluted:
Basic earnings per common share	$	0.38	$	0.39	$	0.84	$	1.25
Diluted earnings per common share	$	0.38	$	0.39	$	0.84	$	1.24

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Stock-based Compensation

6 Months Ended

Aug. 31, 2017

Share-based Compensation [Abstract]

Stock-based Compensation

Share-based Compensation

The Company has one share-based compensation plan, the 2014 Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the growth and prosperity of the Company by permitting the Company to grant to its employees, directors and advisors various types of restricted stock unit awards, performance share units, stock options, and stock appreciation rights to purchase common stock of the Company. The maximum number of shares that may be issued under the Plan is 1,500,000 shares. As of August 31, 2017, the Company has approximately 1,305,632 shares available for future issuance under the Plan.

Restricted Stock Unit Awards

Restricted stock unit awards are valued at the market price of our common stock on the grant date. Awards issued prior to fiscal 2015 generally have a three year cliff vesting schedule and awards issued subsequent to fiscal 2015 generally vest ratably over a period of three years but these awards may vest early in accordance with the Plan’s accelerated vesting provisions.

The activity of our non-vested restricted stock unit awards for the six month period endedAugust 31, 2017 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	134,547		$	51.10
Granted	45,613		60.00
Vested	(61,361	)	47.09
Forfeited	(4,021	)	55.50
Non-Vested Balance as of August 31, 2017	114,778		$	56.63

Performance Share Unit Awards

Performance share unit awards are valued at the market price of our common stock on the grant date. These awards have a three year performance cycle and will vest and become payable, if at all, on the third anniversary of the award date. The awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods. In addition, a multiplier may be applied to the total awards granted which is based on the Company’s total shareholder return during such three year period in comparison to a defined specific industry peer group as set forth in the plan.The activity of our non-vested performance share unit awards for the six month period endedAugust 31, 2017 is as follows:

	Performance Stock Units		Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	51,426		$	51.70
Granted	25,634		60.20
Vested	—		—
Forfeited	(2,631	)	27.25
Non-Vested Balance as of August 31, 2017	74,429		$	54.53

Stock Appreciation Rights

Stock appreciation rights are granted with an exercise price equal to the market value of our common stock on the date of grant. These awards generally have a contractual term of 7 years and vest ratably over a period of three years although some may vest immediately on issuance. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company’s stock appreciation rights activity for the six month period endedAugust 31, 2017 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 28, 2017	170,139		$	42.02
Granted	—		—
Exercised	(4,479	)	42.54
Forfeited	(2,145	)	45.36
Outstanding as of August 31, 2017	163,515		$	41.96
Exercisable as of August 31, 2017	153,515		$	41.75

The average remaining contractual term for those stock appreciation rights outstanding at August 31, 2017 is 3.02 years, with an aggregate intrinsic value of $1.1 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of August 31, 2017 is 3.01 years, with an aggregate intrinsic value of $1.1 million.

Employee Stock Purchase Plan

The Company also has an employee stock purchase plan, which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of 24 months (the "offering period"). On the first day of an offering period (the “enrollment date”) the participant is granted the option to purchase shares on each exercise date at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. The participant’s right to purchase common stock under the plan is restricted to no more than $25,000 per calendar year and the participant may not purchase more than 5,000 shares during any offering period. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period. The fair value of the estimated number of shares to be issued under each offering is determined using the Black-Scholes option pricing model. For the six month period endedAugust 31, 2017, the Company issued 35,447 shares under the Employee Stock Purchase Plan.

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows (in thousands):

Six months ended August 31,	2017		2016
Compensation Expense	$	3,400	$	3,198
Income tax benefits	$	1,088	$	1,023

Unrecognized compensation cost related to restricted stock units, performance share unit awards, stock appreciation rights, and the employee stock purchase plan at August 31, 2017 totals $8.6 million.

The Company’s policy is to issue shares required under these plans from the Company’s treasury shares or from the Company’s authorized but unissued shares.

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Segments

6 Months Ended

Aug. 31, 2017

Segment Reporting [Abstract]

Segments

Segments

Information regarding operations and assets by segment was as follows (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net Sales:
Energy	$	97,299		$	103,346		$	210,504		$	249,147
Metal Coatings	99,030			97,444			191,108			202,009
Total net sales	196,329			200,790			401,612			451,156
Operating Income:
Energy	2,363			8,413			9,074			28,967
Metal Coatings	23,409			15,032			44,651			39,334
Corporate	(8,385		)	(8,338		)	(16,315		)	(16,885		)
Total operating income	17,387			15,107			37,410			51,416
Interest expense	3,400			3,580			6,760			7,505
Net loss on sale of property, plant and equipment and insurance proceeds	654			192			554			82
Other income, net	(394		)	(68		)	(479		)	(190		)
Income before income taxes	$	13,727		$	11,403		$	30,575		$	44,019
	As of
	August 31, 2017			February 28, 2017
	(Restated)
Total Assets:
Energy	$	549,216		$	536,557
Metal Coatings	449,228			428,330
Corporate	11,138			13,467
	$	1,009,582		$	978,354

Financial Information About Geographical Areas

Below is a breakdown of selected financial information by geographical area (in thousands):

	Three Months Ended August 31,						Six Months Ended August 31,
	2017			2016			2017			2016
	(Restated)			(Restated)			(Restated)			(Restated)
Net Sales:
U.S.	$	162,594		$	146,783		$	329,323		$	308,881
International	33,839			54,163			72,393			142,970
Eliminations	(104		)	(156		)	(104		)	(695		)
Total Net Sales	$	196,329		$	200,790		$	401,612		$	451,156

	August 31, 2017		February 28, 2017
Property, Plant and Equipment, Net:
U.S.	$	206,298	$	205,079
Canada	18,169		18,002
Other Countries	5,847		5,529
Total Property, Plant and Equipment, Net	$	230,314	$	228,610

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Warranty Reserves

6 Months Ended

Aug. 31, 2017

Product Warranties Disclosures [Abstract]

Warranty Reserves

Warranty Reserves

A reserve has been established to provide for the estimated future cost of warranties on a portion of the Company’s delivered products and is classified within accrued liabilities on the consolidated balance sheet. Management periodically reviews the reserves and makes adjustments accordingly. Warranties cover such factors as non-conformance to specifications and defects in material and workmanship. The following table shows changes in the warranty reserves since the end of fiscal 2017 (in thousands):

	Warranty Reserve
Balance at February 28, 2017	$	2,098
Warranty costs incurred	(993		)
Additions charged to income	695
Balance at August 31, 2017	$	1,800

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DEBT (Notes)

6 Months Ended

Aug. 31, 2017

Debt [Abstract]

Long-term Debt [Text Block]

Debt

Our debt consisted of the following (in thousands):

	As of
	August 31, 2017			February 28, 2017
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	14,286			28,571
Term Note, due in quarterly installments beginning in June 2013 through March 2018	—			49,219
Revolving line of credit with bank	163,000			69,500
Total debt	302,286			272,290
Unamortized debt issuance costs for Senior Notes and Term Note	(478		)	(861		)
Total debt, net	301,808			271,429
Less amount due within one year	(14,286		)	(16,629		)
Debt due after one year, net	$	287,522		$	254,800

On March 21, 2017, we executed the Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with Bank of America and other lenders. The 2017 Credit Agreement amended the Credit Agreement entered into on March 27, 2013 by the following: (i) extending the maturity date until March 21, 2022, (ii) providing for a senior revolving credit facility in a principal amount of up to $450 million, with an additional $150 million accordion, (iii) including a $75 million sublimit for the issuance of standby and commercial letters of credit, (iv) including a $30 million sublimit for swing line loans, (v) restricting indebtedness incurred in respect of capital leases, synthetic lease obligations and purchase money obligations not to exceed $20 million, (vi) restricting investments in any foreign subsidiaries not to exceed $50 million in the aggregate, and (vii) including various financial covenants and certain restricted payments relating to dividends and share repurchases as specifically set forth in the 2017 Credit Agreement. The balance due on the $75.0 million term facility under the previous Credit Agreement was paid in full as a result of the execution of the 2017 Credit Agreement. The financial covenants, as defined in the 2017 Credit Agreement, require us to maintain on a consolidated basis a Leverage Ratio not to exceed 3.25:1.0 and an Interest Coverage Ratio of at least 3.00:1.0. The 2017 Credit Agreement will be used to finance working capital needs, capital improvements, dividends, future acquisitions, letter of credit needs and share repurchases.

Interest rates for borrowings under the 2017 Credit Agreement are based on either a Eurodollar Rate or a Base Rate plus a margin ranging from 0.875% to 1.875% depending on our Leverage Ratio (as defined in the 2017 Credit Agreement). The Eurodollar Rate is defined as LIBOR for a term equivalent to the borrowing term (or other similar interbank rates if LIBOR is unavailable). The Base Rate is defined as the highest of the applicable Fed Funds rate plus 0.50%, the Prime rate, or the Eurodollar Rate plus 1.0% at the time of borrowing. The 2017 Credit Agreement also carries a Commitment Fee for the unfunded portion ranging from 0.175% to 0.30% per annum, depending on our Leverage Ratio.

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Subsequent Events (Notes)

6 Months Ended

Aug. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On September 6, 2017, we completed the acquisition of all the assets and outsanding shares of Powergrid Solutions, Inc. ("PSI"), a privately held company, based in Oshkosh, Wisconsin. PSI designs, engineers and manufactures customized low and medium-voltage power quality, power generation and distribution equipment. PSI’s product portfolio includes metal-enclosed, metal-clad and padmount switchgear, serving the utility, commercial, industrial and renewable energy markets since 1982. The acquisition of PSI is a key addition to our electrical switchgear portfolio. The addition of PSI’s low-voltage and padmount switchgear allows AZZ to offer a comprehensive portfolio of customized switchgear solutions to both existing and new customers in a diverse set of industries.

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Restatement of Previously Issued Financial Statements (Tables)

6 Months Ended

Aug. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Schedule of Restatements of Previously Issued Financial Statements

The table below sets forth the condensed consolidated balance sheet, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	August 31, 2017
	As Reported		Correction			As Restated
Assets
Inventories - net	$	144,008	$	(35,555	)	$	108,453
Costs and estimated earnings in excess of billings on uncompleted contracts	32,082		33,736			65,818
Total current assets	325,007		(1,819		)	323,188
Total assets	$	1,011,401	$	(1,819	)	$	1,009,582
Liabilities and Shareholders’ Equity
Other accrued liabilities	$	20,085	$	1,505		$	21,590
Customer deposits	25,951		(24,345		)	1,606
Billings in excess of costs and estimated earnings on uncompleted contracts	6,708		14,979			21,687
Total current liabilities	126,273		(7,861		)	118,412
Deferred income tax liabilities	52,293		2,266			54,559
Total liabilities	466,088		(5,595		)	460,493
Shareholders’ equity:
Retained earnings	507,754		3,776			511,530
Total shareholders’ equity	545,313		3,776			549,089
Total liabilities and shareholders' equity	$	1,011,401	$	(1,819	)	$	1,009,582

The table below sets forth the condensed consolidated statements of income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands, except per share data):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	190,407	$	5,922	$	196,329	$	195,045	$	5,745	$	200,790
Cost of Sales	148,938		3,591		152,529		153,159		5,527		158,686
Gross Profit	41,469		2,331		43,800		41,886		218		42,104
Operating Income	15,056		2,331		17,387		14,889		218		15,107
Income Before Income Taxes	11,396		2,331		13,727		11,185		218		11,403
Income Tax Expense	3,067		874		3,941		1,162		82		1,244
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Earnings Per Common Share
Basic Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.39	$	—	$	0.39
Diluted Earnings Per Share	$	0.32	$	0.06	$	0.38	$	0.38	$	0.01	$	0.39

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Sales	$	398,958	$	2,654	$	401,612	$	437,712	$	13,444	$	451,156
Cost of Sales	308,223		2,207		310,430		332,499		11,425		343,924
Gross Profit	90,735		447		91,182		105,213		2,019		107,232
Operating Income	36,963		447		37,410		49,397		2,019		51,416
Income Before Income Taxes	30,128		447		30,575		42,000		2,019		44,019
Income Tax Expense	8,559		168		8,727		10,914		757		11,671
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Earnings Per Common Share
Basic Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.20	$	0.05	$	1.25
Diluted Earnings Per Share	$	0.83	$	0.01	$	0.84	$	1.19	$	0.05	$	1.24

The table below sets forth the condensed consolidated statements of comprehensive income, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Three Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	8,329	$	1,457	$	9,786	$	10,023	$	136	$	10,159
Comprehensive Income	13,641		1,457		15,098		10,214		136		10,350

	Six Months Ended August 31,
	2017						2016
	As Reported		Correction		As Restated		As Reported		Correction		As Restated
Net Income	$	21,569	$	279	$	21,848	$	31,086	$	1,262	$	32,348
Comprehensive Income	25,870		279		26,149		33,742		1,262		35,004

The table below sets forth the condensed consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Six Months Ended August 31,
	2017									2016
	As Reported			Correction			As Restated			As Reported			Correction			As Restated
Cash flows from operating activities:
Net income	$	21,569		$	279		$	21,848		$	31,086		$	1,262		$	32,348
Deferred income taxes	682			168			850			1,509			757			2,266
Inventories	(19,658		)	6,354			(13,304		)	(15,832		)	12,565			(3,267		)
Net change in billings related to costs and estimated earnings on uncompleted contracts	(16,487		)	2,290			(14,197		)	8,028			(9,902		)	(1,874		)
Other accrued liabilities and income taxes payable	(1,651		)	(9,091		)	(10,742		)	(6,279		)	(4,682		)	(10,961		)
Net cash provided by operating activities:	$	2,785		$	—		$	2,785		$	50,028		$	—		$	50,028

The restatement had no impact on cash flows from investing activities or financing activities.

The table below sets forth the condensed consolidated statement of shareholders' equity, including the balances originally reported, corrections and the as restated balances for each restated period (in thousands):

	Retained Earnings		Total Stockholders' Equity
Balance at August 31, 2017, as reported	$	507,754	$	545,313
Correction	3,776		3,776
Balance at August 31, 2017, as restated	$	511,530	$	549,089

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Earnings Per Share (Tables)

6 Months Ended

Aug. 31, 2017

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	Three Months Ended August 31,				Six Months Ended August 31,
	2017		2016		2017		2016
	(Restated)		(Restated)		(Restated)		(Restated)
Numerator:
Net income for basic and diluted earnings per common share	$	9,786	$	10,159	$	21,848	$	32,348
Denominator:
Denominator for basic earnings per common share–weighted average shares	25,970		25,987		25,991		25,950
Effect of dilutive securities:
Employee and director stock awards	66		132		74		131
Denominator for diluted earnings per common share	26,036		26,119		26,065		26,081
Earnings per share basic and diluted:
Basic earnings per common share	$	0.38	$	0.39	$	0.84	$	1.25
Diluted earnings per common share	$	0.38	$	0.39	$	0.84	$	1.24

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Stock-based Compensation (Tables)

6 Months Ended

Aug. 31, 2017

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-based Compensation, Performance Shares Award Unvested Activity [Table Text Block]

The activity of our non-vested performance share unit awards for the six month period endedAugust 31, 2017 is as follows:

	Performance Stock Units		Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	51,426		$	51.70
Granted	25,634		60.20
Vested	—		—
Forfeited	(2,631	)	27.25
Non-Vested Balance as of August 31, 2017	74,429		$	54.53

Restricted Stock Unit Awards Non-Vested

The activity of our non-vested restricted stock unit awards for the six month period endedAugust 31, 2017 is as follows:

	Restricted Stock  Units		Weighted Average  Grant Date Fair Value
Non-Vested Balance as of February 28, 2017	134,547		$	51.10
Granted	45,613		60.00
Vested	(61,361	)	47.09
Forfeited	(4,021	)	55.50
Non-Vested Balance as of August 31, 2017	114,778		$	56.63

Stock Appreciation Rights and Option Awards

A summary of the Company’s stock appreciation rights activity for the six month period endedAugust 31, 2017 is as follows:

	SAR’s		Weighted Average Exercise  Price
Outstanding as of February 28, 2017	170,139		$	42.02
Granted	—		—
Exercised	(4,479	)	42.54
Forfeited	(2,145	)	45.36
Outstanding as of August 31, 2017	163,515		$	41.96
Exercisable as of August 31, 2017	153,515		$	41.75

Share-based compensation expense and related income tax

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows (in thousands):

Six months ended August 31,	2017		2016
Compensation Expense	$	3,400	$	3,198
Income tax benefits	$	1,088	$	1,023

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Warranty Reserves (Tables)

6 Months Ended

Aug. 31, 2017

Product Warranties Disclosures [Abstract]

Changes in the warranty reserves

The following table shows changes in the warranty reserves since the end of fiscal 2017 (in thousands):

	Warranty Reserve
Balance at February 28, 2017	$	2,098
Warranty costs incurred	(993		)
Additions charged to income	695
Balance at August 31, 2017	$	1,800

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DEBT (Tables)

6 Months Ended

Aug. 31, 2017

Debt [Abstract]

Schedule of Debt [Table Text Block]

Our debt consisted of the following (in thousands):

	As of
	August 31, 2017			February 28, 2017
Senior Notes, due in balloon payment in January 2021	$	125,000		$	125,000
Senior Notes, due in annual installments of $14,286 beginning in March 2012 through March 2018	14,286			28,571
Term Note, due in quarterly installments beginning in June 2013 through March 2018	—			49,219
Revolving line of credit with bank	163,000			69,500
Total debt	302,286			272,290
Unamortized debt issuance costs for Senior Notes and Term Note	(478		)	(861		)
Total debt, net	301,808			271,429
Less amount due within one year	(14,286		)	(16,629		)
Debt due after one year, net	$	287,522		$	254,800

On March 21, 2017, we executed the Amended and Restated Credit Agreement (the “2017 Credit Agreement”) with Bank of America and other lenders. The 2017 Credit Agreement amended the Credit Agreement entered into on March 27, 2013 by the following: (i) extending the maturity date until March 21, 2022, (ii) providing for a senior revolving credit facility in a principal amount of up to $450 million, with an additional $150 million accordion, (iii) including a $75 million sublimit for the issuance of standby and commercial letters of credit, (iv) including a $30 million sublimit for swing line loans, (v) restricting indebtedness incurred in respect of capital leases, synthetic lease obligations and purchase money obligations not to exceed $20 million, (vi) restricting investments in any foreign subsidiaries not to exceed $50 million in the aggregate, and (vii) including various financial covenants and certain restricted payments relating to dividends and share repurchases as specifically set forth in the 2017 Credit Agreement. The balance due on the $75.0 million term facility under the previous Credit Agreement was paid in full as a result of the execution of the 2017 Credit Agreement. The financial covenants, as defined in the 2017 Credit Agreement, require us to maintain on a consolidated basis a Leverage Ratio not to exceed 3.25:1.0 and an Interest Coverage Ratio of at least 3.00:1.0. The 2017 Credit Agreement will be used to finance working capital needs, capital improvements, dividends, future acquisitions, letter of credit needs and share repurchases.

Interest rates for borrowings under the 2017 Credit Agreement are based on either a Eurodollar Rate or a Base Rate plus a margin ranging from 0.875% to 1.875% depending on our Leverage Ratio (as defined in the 2017 Credit Agreement). The Eurodollar Rate is defined as LIBOR for a term equivalent to the borrowing term (or other similar interbank rates if LIBOR is unavailable). The Base Rate is defined as the highest of the applicable Fed Funds rate plus 0.50%, the Prime rate, or the Eurodollar Rate plus 1.0% at the time of borrowing. The 2017 Credit Agreement also carries a Commitment Fee for the unfunded portion ranging from 0.175% to 0.30% per annum, depending on our Leverage Ratio.

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Restatement of Previously Issued Financial Statements - Balance Sheets (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventories - net	$ 108,453
Costs and estimated earnings in excess of billings on uncompleted contracts	65,818	$ 50,262
Total current assets	323,188	297,052
Total assets	1,009,582	978,354
Other accrued liabilities	21,590	24,042
Customer deposits	1,606	1,459
Billings in excess of costs and estimated earnings on uncompleted contracts	21,687	20,617
Total current liabilities	118,412	136,770
Deferred income tax liabilities	54,559	53,648
Total liabilities	460,493	445,218
Retained earnings	511,530	498,527
Total shareholders’ equity	549,089	533,136
Total liabilities and shareholders' equity	1,009,582	$ 978,354
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventories - net	144,008
Costs and estimated earnings in excess of billings on uncompleted contracts	32,082
Total current assets	325,007
Total assets	1,011,401
Other accrued liabilities	20,085
Customer deposits	25,951
Billings in excess of costs and estimated earnings on uncompleted contracts	6,708
Total current liabilities	126,273
Deferred income tax liabilities	52,293
Total liabilities	466,088
Retained earnings	507,754
Total shareholders’ equity	545,313
Total liabilities and shareholders' equity	1,011,401
Correction
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventories - net	(35,555)
Costs and estimated earnings in excess of billings on uncompleted contracts	33,736
Total current assets	(1,819)
Total assets	(1,819)
Other accrued liabilities	1,505
Customer deposits	(24,345)
Billings in excess of costs and estimated earnings on uncompleted contracts	14,979
Total current liabilities	(7,861)
Deferred income tax liabilities	2,266
Total liabilities	(5,595)
Retained earnings	3,776
Total shareholders’ equity	3,776
Total liabilities and shareholders' equity	$ (1,819)

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Restatement of Previously Issued Financial Statements - Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Sales	$ 196,329	$ 200,790	$ 401,612	$ 451,156
Cost of Sales	152,529	158,686	310,430	343,924
Gross Profit	43,800	42,104	91,182	107,232
Operating Income	17,387	15,107	37,410	51,416
Income Before Income Taxes	13,727	11,403	30,575	44,019
Income Tax Expense	3,941	1,244	8,727	11,671
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Basic Earnings Per Share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.25
Diluted Earnings Per Share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.24
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Sales	$ 190,407	$ 195,045	$ 398,958	$ 437,712
Cost of Sales	148,938	153,159	308,223	332,499
Gross Profit	41,469	41,886	90,735	105,213
Operating Income	15,056	14,889	36,963	49,397
Income Before Income Taxes	11,396	11,185	30,128	42,000
Income Tax Expense	3,067	1,162	8,559	10,914
Net Income	$ 8,329	$ 10,023	$ 21,569	$ 31,086
Basic Earnings Per Share (usd per share)	$ 0.32	$ 0.39	$ 0.83	$ 1.20
Diluted Earnings Per Share (usd per share)	$ 0.32	$ 0.38	$ 0.83	$ 1.19
Correction
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Sales	$ 5,922	$ 5,745	$ 2,654	$ 13,444
Cost of Sales	3,591	5,527	2,207	11,425
Gross Profit	2,331	218	447	2,019
Operating Income	2,331	218	447	2,019
Income Before Income Taxes	2,331	218	447	2,019
Income Tax Expense	874	82	168	757
Net Income	$ 1,457	$ 136	$ 279	$ 1,262
Basic Earnings Per Share (usd per share)	$ 0.06	$ 0.00	$ 0.01	$ 0.05
Diluted Earnings Per Share (usd per share)	$ 0.06	$ 0.01	$ 0.01	$ 0.05

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Restatement of Previously Issued Financial Statements - Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Comprehensive Income	15,098	10,350	26,149	35,004
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	8,329	10,023	21,569	31,086
Comprehensive Income	13,641	10,214	25,870	33,742
Correction
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	1,457	136	279	1,262
Comprehensive Income	$ 1,457	$ 136	$ 279	$ 1,262

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Restatement of Previously Issued Financial Statements - Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Deferred income taxes			850	2,266
Inventories			(13,304)	(3,267)
Net change in billings related to costs and estimated earnings on uncompleted contracts			(14,197)	(1,874)
Other accrued liabilities and income taxes payable			(10,742)	(10,961)
Net cash (used in) provided by operating activities:			2,785	50,028
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	8,329	10,023	21,569	31,086
Deferred income taxes			682	1,509
Inventories			(19,658)	(15,832)
Net change in billings related to costs and estimated earnings on uncompleted contracts			(16,487)	8,028
Other accrued liabilities and income taxes payable			(1,651)	(6,279)
Net cash (used in) provided by operating activities:			2,785	50,028
Correction
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income	$ 1,457	$ 136	279	1,262
Deferred income taxes			168	757
Inventories			6,354	12,565
Net change in billings related to costs and estimated earnings on uncompleted contracts			2,290	(9,902)
Other accrued liabilities and income taxes payable			(9,091)	(4,682)
Net cash (used in) provided by operating activities:			$ 0	$ 0

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Restatement of Previously Issued Financial Statements - Equity Statement (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	$ 549,089	$ 533,136
Retained Earnings
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	511,530	$ 498,527
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	545,313
As Reported | Retained Earnings
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	507,754
Correction
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	3,776
Correction | Retained Earnings
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total shareholders’ equity	$ 3,776

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Numerator:
Net Income	$ 9,786	$ 10,159	$ 21,848	$ 32,348
Denominator:
Denominator for basic earnings per common share-weighted average shares (shares)	25,970	25,987	25,991	25,950
Effect of dilutive securities:
Employee and Director stock awards (shares)	66	132	74	131
Denominator for diluted earnings per common share (shares)	26,036	26,119	26,065	26,081
Earnings per share basic and diluted:
Basic earnings per Common share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.25
Diluted earnings per common share (usd per share)	$ 0.38	$ 0.39	$ 0.84	$ 1.24

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Stock-based Compensation (Details) - Restricted Stock Units (RSUs) [Member]	6 Months Ended
	Aug. 31, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Non-Vested Balance as of February 28, 2017 | shares	134,547
Granted (shares) | shares	45,613
Vested (shares) | shares	(61,361)
Forfeited (shares) | shares	(4,021)
Non-Vested Balance as of August 31, 2017 | shares	114,778
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Non-Vested Balance as of February 28, 2017 | $ / shares	$ 51.10
Granted, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	60.00
Vested, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	47.09
Forfeited, Weighted Average Grant Date Fair Value (usd per share) | $ / shares	55.50
Non-Vested Balance as of August 31, 2017 | $ / shares	$ 56.63

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Stock-based Compensation (Details 1) - Stock Appreciation Rights (SARs) [Member] - $ / shares	6 Months Ended
	Aug. 31, 2017	Feb. 28, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	163,515	170,139
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 41.96	$ 42.02
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments, Number of Shares [Roll Forward]
Granted (shares)	0
Exercised (shares)	(4,479)
Forfeited (shares)	(2,145)
Exercisable as of August 31, 2017	153,515
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument, Weighted Average Grant Date Fair Value [Roll Forward]
Granted, Weighted Average Exercise Price (usd per share)	$ 0.00
Exercised, Weighted Average Exercise Price (usd per share)	42.54
Forfeited, Weighted Average Exercise Price (usd per share)	45.36
Exercisable as of August 31, 2017	$ 41.75

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Stock-based Compensation (Details 2) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Share based compensation expense and related income tax benefits
Income tax benefits	$ 1,088	$ 1,023

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Stock-based Compensation (Details Textual)	6 Months Ended
	Aug. 31, 2017 USD ($) share_based_compensation_plan $ / shares shares	May 31, 2017 shares	Feb. 28, 2017 $ / shares shares
Share Based Compensation (Textual) [Abstract]
Number Of Share-Based Compensation Plans | share_based_compensation_plan	1
Shares authorized (shares)		1,500,000
Share for future issuance (shares)	1,305,632
Unrecognized compensation cost | $	$ 8,565,163
Restricted Stock [Member]
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	74,429		51,426
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares	$ 54.53		$ 51.700
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	25,634
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 60.20
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(2,631)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares	$ 27.25
Stock Appreciation Rights (SARs) [Member]
Share Based Compensation (Textual) [Abstract]
Vesting ratably term	3 years
Term for the contract	7 years
Outstanding Average contractual term	3 years 7 days
Outstanding Aggregate intrinsic value | $	$ 1,100,000
Average remaining contractual term	3 years 2 days
Aggregate remaining intrinsic value | $	$ 1,100,000
Employee Stock [Member]
Share Based Compensation (Textual) [Abstract]
Term of offering under stock purchase plan	24 months
Granted option lower than	85.00%
Restricted common stock under plan | $	$ 25,000
Common stock purchased during period (shares)	5,000
Share-based Compensation Arrangement, By Share-based Payment Award, Common Shares Estimated To Be Issued	35,447

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Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016	Feb. 28, 2017
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	$ 230,314		$ 230,314		$ 228,610
Operations and assets by segment
Net Sales	196,329	$ 200,790	401,612	$ 451,156
Operating Income	17,387	15,107	37,410	51,416
Interest Expense	3,400	3,580	6,760	7,505
Gain (Loss) on Disposition of Property Plant Equipment	654	192	554	82
Other Nonoperating Income (Expense)	(394)	(68)	(479)	(190)
Income Before Income Taxes	13,727	11,403	30,575	44,019
Assets	1,009,582		1,009,582		978,354
Energy [Member]
Operations and assets by segment
Net Sales	97,299	103,346	210,504	249,147
Operating Income	2,363	8,413	9,074	28,967
Assets	549,216		549,216		536,557
Galvanizing Services [Member]
Operations and assets by segment
Net Sales	99,030	97,444	191,108	202,009
Operating Income	23,409	15,032	44,651	39,334
Assets	449,228		449,228		428,330
Corporate, Non-Segment [Member]
Operations and assets by segment
Operating Income	(8,385)	(8,338)	(16,315)	(16,885)
Corporate [Member]
Operations and assets by segment
Assets	11,138		11,138		13,467
UNITED STATES
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	206,298		206,298		205,079
Operations and assets by segment
Net Sales	162,594	146,783	329,323	308,881
CANADA
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	18,169		18,169		18,002
Other Countries [Member]
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	5,847		5,847		$ 5,529
International [Member]
Operations and assets by segment
Net Sales	33,839	54,163	72,393	142,970
Geography Eliminations [Member]
Operations and assets by segment
Net Sales	$ (104)	$ (156)	$ (104)	$ (695)

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Warranty Reserves (Details) $ in Thousands	6 Months Ended
	Aug. 31, 2017 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Opening Balance	$ 2,098
Warranty costs incurred	993
Closing Balance	1,800
Product Warranty Accrual, Warranties Issued	$ 695

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DEBT (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Debt Instrument [Line Items]
Long-term Debt	$ 301,808	$ 271,429
Long-term Debt, Gross	302,286	272,290
Unamortized Debt Issuance Expense	(478)	(861)
Debt, Current	(14,286)	(16,629)
Long-term Debt, Excluding Current Maturities	287,522	254,800
Senior Notes [Member] | Unsecured Senior Notes Due January 2021 [Member]
Debt Instrument [Line Items]
Long-term Debt	125,000	125,000
Senior Notes [Member] | Unsecured Senior Notes Due March 2012 through March 2018 [Member]
Debt Instrument [Line Items]
Long-term Debt	14,286	28,571
Medium-term Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	0	49,219
Line of Credit [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 163,000	$ 69,500

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Realignment (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Restructuring Cost and Reserve [Line Items]
Restructuring Charges	$ 0	$ (6,706)