Leases (Tables)

6 Months Ended

Aug. 31, 2024

Leases [Abstract]

Lease, Cost

The following table outlines the classification of right-of-use ("ROU") asset and lease liabilities in the consolidated balance sheets as of August 31, 2024 and February 29, 2024 (in thousands):

	Balance Sheet Classification	As of
		August 31, 2024		February 29, 2024
Assets
Operating right-of-use assets	Right-of-use assets	$	17,194	$	19,808
Finance right-of-use assets	Right-of-use assets	4,859		3,931
Liabilities
Operating lease liabilities ― short-term	Lease liability - short-term	$	5,579	$	5,893
Operating lease liabilities ― long-term	Lease liability - long-term	12,284		14,606
Finance lease liabilities ― short-term	Lease liability - short-term	995		766
Finance lease liabilities ― long-term	Lease liability - long-term	3,979		3,221

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

	Three Months Ended August 31,				Six Months Ended August 31,
	2024		2023		2024		2023
Operating cash flows from operating leases included in lease liabilities	$	1,794	$	1,834	$	3,561	$	3,654
Lease liabilities obtained from new ROU assets - operating	410		373		628		1,895
Decrease in ROU assets related to lease terminations	—		(1,294)		—		(1,302)
Financing cash flows from finance leases included in lease liabilities	236		92		432		162
Operating cash flows from finance leases included in lease liabilities	83		21		151		37
Lease liabilities obtained from new ROU assets - finance leases	1,009		599		1,419		599

	As of
	August 31, 2024		February 29, 2024
Weighted-average remaining lease term - operating leases	3.8 years		4.12 years
Weighted-average discount rate - operating leases	4.62	%	4.49	%
Weighted-average remaining lease term - finance leases	4.84 years		5.21 years
Weighted-average discount rate - finance leases	7.08	%	6.70	%

The following table outlines the classification of lease expense related to operating and finance leases in the statements of operations (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2024		2023		2024		2023
Operating lease expense:
Cost of sales	$	3,026	$	3,035	$	6,029	$	6,060
Selling, general and administrative	488		506		977		1,005
Total operating lease expense	3,514		3,541		$	7,006	$	7,065
Financing lease expense:
Cost of sales	269		101		492		177
Interest expense	83		21		151		37
Total financing lease expense	352		122		643		214
Total lease expense	$	3,866	$	3,663	$	7,649	$	7,279

Sublease income for the three and six months ended August 31, 2024 and 2023 was as follows (in thousands):

	Three Months Ended August 31,				Six Months Ended August 31,
	2024		2023		2024		2023
Sublease income	$	254	$	248	$	509	$	488

Lessee, Operating Lease, Liability, Maturity

As of August 31, 2024, maturities of our lease liabilities were as follows (in thousands):

Fiscal year:	Operating Leases		Finance Leases		Total
2025	$	3,259	$	665	$	3,924
2026	5,912		1,263		7,175
2027	4,598		1,224		5,822
2028	2,542		1,137		3,679
2029	1,918		920		2,838
2030	462		499		961
Thereafter	796		170		966
Total lease payments	$	19,487	$	5,878	$	25,365
Less imputed interest	(1,624)		(904)		(2,528)
Total	$	17,863	$	4,974	$	22,837

Finance Lease, Liability, Maturity

As of August 31, 2024, maturities of our lease liabilities were as follows (in thousands):

Fiscal year:	Operating Leases		Finance Leases		Total
2025	$	3,259	$	665	$	3,924
2026	5,912		1,263		7,175
2027	4,598		1,224		5,822
2028	2,542		1,137		3,679
2029	1,918		920		2,838
2030	462		499		961
Thereafter	796		170		966
Total lease payments	$	19,487	$	5,878	$	25,365
Less imputed interest	(1,624)		(904)		(2,528)
Total	$	17,863	$	4,974	$	22,837