Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 31, 2019 | Dec. 12, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-12777 | |
Entity Registrant Name | AZZ Inc. | |
Entity Incorporation, State or Country Code | TX | |
Entity Tax Identification Number | 75-0948250 | |
Entity Address, Address Line One | One Museum Place, Suite 500 | |
Entity Address, Address Line Two | 3100 West 7th Street | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76107 | |
City Area Code | 817 | |
Local Phone Number | 810-0095 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | AZZ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,239,787 | |
Entity Central Index Key | 0000008947 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --02-28 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2019 | Feb. 28, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 13,583 | $ 24,005 |
Accounts receivable (net of allowance for doubtful accounts of $4,663 as of August 31, 2019 and $2,267 as of February 28, 2019) | 154,460 | 144,887 |
Inventories: | ||
Raw material | 98,135 | 94,410 |
Work-in-process | 8,418 | 19,067 |
Finished goods | 3,761 | 11,370 |
Contract assets | 90,759 | 75,561 |
Prepaid expenses and other | 10,925 | 9,245 |
Total current assets | 380,041 | 378,545 |
Property, plant and equipment, net | 214,098 | 210,227 |
Operating Lease, Right-of-Use Asset | 45,709 | 45,870 |
Goodwill | 353,516 | 323,756 |
Intangibles and other assets, net | 126,753 | 130,172 |
Total assets | 1,120,117 | 1,088,570 |
Current liabilities: | ||
Accounts payable | 65,746 | 53,047 |
Income tax payable | 6,409 | 632 |
Accrued salaries and wages | 23,401 | 30,395 |
Other accrued liabilities | 23,437 | 17,631 |
Customer deposits | 696 | 481 |
Contract liabilities | 23,658 | 56,928 |
Operating Lease, Liability, Current | 5,901 | 5,657 |
Total current liabilities | 149,248 | 164,771 |
Debt due after one year, net | 255,812 | 240,745 |
Operating Lease, Liability, Noncurrent | 40,990 | 41,190 |
Other long-term liabilities | 5,335 | 1,513 |
Deferred income taxes | 34,126 | 36,623 |
Total liabilities | 485,511 | 484,842 |
Shareholders’ equity: | ||
Common stock, $1 par, shares authorized 100,000; 26,221 shares issued and outstanding at August 31, 2019 and 26,115 shares issued and outstanding at February 28, 2019 | 26,221 | 26,115 |
Capital in excess of par value | 50,211 | 46,141 |
Retained earnings | 588,172 | 560,224 |
Accumulated other comprehensive loss | (29,998) | (28,752) |
Total shareholders’ equity | 634,606 | 603,728 |
Total liabilities and shareholders' equity | $ 1,120,117 | $ 1,088,570 |
Condensed consolidated Balanc_2
Condensed consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Aug. 31, 2019 | Feb. 28, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Doubtful Accounts | $ 4,663 | $ 2,267 |
Common Stock, Par Value (usd per share) | $ 1 | $ 1 |
Common Stock, Shares Authorized (shares) | 100,000 | 100,000 |
Common Stock, Shares Issued (shares) | 26,221 | 26,115 |
Common Stock, Shares, Outstanding | 26,221 | 26,115 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 236,190 | $ 222,787 | $ 525,313 | $ 485,023 |
Costs and Expenses | ||||
Cost of Revenue | 183,504 | 175,883 | 406,520 | 379,414 |
Gross margin | 52,686 | 46,904 | 118,793 | 105,609 |
Selling, general and administrative | 30,479 | 29,799 | 65,612 | 64,808 |
Operating income | 22,207 | 17,105 | 53,181 | 40,801 |
Interest expense | 3,548 | 3,980 | 7,132 | 7,818 |
Other (income) expense, net | 686 | (857) | 1,110 | (1,148) |
Income before income taxes | 17,973 | 13,982 | 44,939 | 34,131 |
Income tax expense | 2,415 | 2,738 | 8,097 | 7,169 |
Net income | $ 15,558 | $ 11,244 | $ 36,842 | $ 26,962 |
Earnings Per Common Share | ||||
Basic Earnings Per Share (usd per share) | $ 0.59 | $ 0.43 | $ 1.41 | $ 1.04 |
Diluted Earnings Per Share (usd per share) | 0.59 | 0.43 | 1.40 | 1.03 |
Common Stock, Dividends, Per Share, Declared | $ 0.17 | $ 0.17 | $ 0.34 | $ 0.34 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 15,558 | $ 11,244 | $ 36,842 | $ 26,962 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of income tax of $0 | 741 | 455 | (1,219) | (1,801) |
Interest rate swap, net of income tax of $7, $7, $15 and $15, respectively. | (13) | (13) | (27) | (27) |
Other comprehensive income (loss) | 728 | 442 | (1,246) | (1,828) |
Comprehensive income | $ 16,286 | $ 11,686 | $ 35,596 | $ 25,134 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Interest rate swap, income tax | $ 7 | $ 7 | $ 15 | $ 15 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net income | $ 36,842 | $ 26,962 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for doubtful accounts | 2,177 | 2,050 |
Amortization and depreciation | 24,584 | 25,698 |
Deferred income taxes | (3,867) | 467 |
Net loss on property, plant and equipment due to impairment | 0 | 811 |
Net (gain) loss on sale of property, plant and equipment | (306) | (308) |
Amortization of deferred borrowing costs | 269 | 343 |
Share-based compensation expense | 3,086 | 3,659 |
Effects of changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | (9,179) | (13,179) |
Inventories | 15,550 | (2,171) |
Prepaid expenses and other | (2,055) | (2,390) |
Other assets | 368 | (1,017) |
Net change in contract assets and liabilities | (49,952) | (19,278) |
Accounts payable | 13,009 | (10,025) |
Other accrued liabilities and income taxes payable | 7,709 | 5,072 |
Net cash provided by operating activities | 38,235 | 16,694 |
Cash Flows Used For Investing Activities: | ||
Proceeds from sale of property, plant and equipment | 332 | 339 |
Purchase of Property, Plant and Equipment | (16,496) | (7,179) |
Acquisition of Subsidiaries, Net of Cash Acquired | (39,924) | (8,000) |
Net Cash From Investing Activities | (56,088) | (14,840) |
Cash Flows From Financing Activities: | ||
Proceeds from Stock Options Exercised | 1,781 | 1,327 |
Payments Related to Tax Withholding for Share-based Compensation | (691) | (554) |
Payments on revolving loan | (204,500) | (169,000) |
Payments on Long Term Debt | 0 | (14,286) |
Payments of Dividends | (8,894) | (8,844) |
Net Cash Used In Financing Activities | 7,196 | (13,357) |
Proceeds from revolving loan | 219,500 | 178,000 |
Effect of Exchange Rate Changes on Cash | 235 | (146) |
Net Increase (Decrease) In Cash & Cash Equivalents | (10,422) | (11,649) |
Cash & Cash Equivalents At Beginning of Period | 24,005 | 20,853 |
Cash & Cash Equivalents At End of Period | 13,583 | 9,204 |
Supplemental Disclosures | ||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 6,819 | 7,838 |
Cash Paid For Income Taxes | $ 3,770 | $ 1,514 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity - CY Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance (shares) at Feb. 28, 2018 | 25,959 | ||||
Balance at Feb. 28, 2018 | $ 565,203 | $ 25,959 | $ 38,446 | $ 526,018 | $ (25,220) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,358 | $ 0 | 1,358 | ||
Restricted Stock Units (shares) | 31 | ||||
Restricted Stock Units | (518) | $ 31 | (549) | ||
Employee Stock Purchase Plan (shares) | 37 | ||||
Employee Stock Purchase Plan | 1,327 | $ 37 | 1,290 | ||
Cash Dividend Paid | (4,418) | (4,418) | |||
Net income | 15,718 | 15,718 | |||
Foreign Currency Translation | (2,256) | (2,256) | |||
Interest rate swap | (14) | (14) | |||
Balance (shares) at May. 31, 2018 | 26,027 | ||||
Balance at May. 31, 2018 | 577,116 | $ 26,027 | 40,545 | 538,034 | (27,490) |
Balance (shares) at Feb. 28, 2018 | 25,959 | ||||
Balance at Feb. 28, 2018 | 565,203 | $ 25,959 | 38,446 | 526,018 | (25,220) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 26,962 | ||||
Foreign Currency Translation | (1,801) | ||||
Interest rate swap | (27) | ||||
Balance (shares) at Aug. 31, 2018 | 26,050 | ||||
Balance at Aug. 31, 2018 | 586,641 | $ 26,050 | 42,787 | 544,852 | (27,048) |
Balance (shares) at May. 31, 2018 | 26,027 | ||||
Balance at May. 31, 2018 | 577,116 | $ 26,027 | 40,545 | 538,034 | (27,490) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 2,301 | $ 0 | 2,301 | ||
Restricted Stock Units (shares) | 23 | ||||
Restricted Stock Units | (36) | $ 23 | (59) | ||
Cash Dividend Paid | (4,426) | (4,426) | |||
Net income | 11,244 | 11,244 | |||
Foreign Currency Translation | 455 | 455 | |||
Interest rate swap | (13) | (13) | |||
Balance (shares) at Aug. 31, 2018 | 26,050 | ||||
Balance at Aug. 31, 2018 | 586,641 | $ 26,050 | 42,787 | 544,852 | (27,048) |
Balance (shares) at Feb. 28, 2019 | 26,115 | ||||
Balance at Feb. 28, 2019 | 603,728 | $ 26,115 | 46,141 | 560,224 | (28,752) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,350 | $ 0 | 1,350 | ||
Restricted Stock Units (shares) | 37 | ||||
Restricted Stock Units | (691) | $ 37 | (728) | ||
Cash Dividend Paid | (4,440) | (4,440) | |||
Net income | 21,284 | 21,284 | |||
Foreign Currency Translation | (1,960) | (1,960) | |||
Interest rate swap | (14) | (14) | |||
Balance (shares) at May. 31, 2019 | 26,152 | ||||
Balance at May. 31, 2019 | 619,257 | $ 26,152 | 46,763 | 577,068 | (30,726) |
Balance (shares) at Feb. 28, 2019 | 26,115 | ||||
Balance at Feb. 28, 2019 | 603,728 | $ 26,115 | 46,141 | 560,224 | (28,752) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 36,842 | ||||
Foreign Currency Translation | (1,219) | ||||
Interest rate swap | (27) | ||||
Balance (shares) at Aug. 31, 2019 | 26,221 | ||||
Balance at Aug. 31, 2019 | 634,606 | $ 26,221 | 50,211 | 588,172 | (29,998) |
Balance (shares) at May. 31, 2019 | 26,152 | ||||
Balance at May. 31, 2019 | 619,257 | $ 26,152 | 46,763 | 577,068 | (30,726) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,736 | $ 0 | 1,736 | ||
Restricted Stock Units (shares) | 18 | ||||
Restricted Stock Units | 0 | $ 18 | (18) | ||
Employee Stock Purchase Plan (shares) | 51 | ||||
Employee Stock Purchase Plan | 1,781 | $ 51 | 1,730 | 0 | |
Cash Dividend Paid | (4,454) | (4,454) | |||
Net income | 15,558 | 15,558 | |||
Foreign Currency Translation | 741 | 741 | |||
Interest rate swap | (13) | (13) | |||
Balance (shares) at Aug. 31, 2019 | 26,221 | ||||
Balance at Aug. 31, 2019 | $ 634,606 | $ 26,221 | $ 50,211 | $ 588,172 | $ (29,998) |
Consolidated Statement of Sha_2
Consolidated Statement of Shareholders' Equity - PY Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] |
Balance (shares) at Feb. 28, 2018 | 25,959 | ||||
Balance at Feb. 28, 2018 | $ 565,203 | $ 25,959 | $ 38,446 | $ 526,018 | $ (25,220) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative Effect on Retained Earnings, Net of Tax | 716 | 716 | |||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,358 | $ 0 | 1,358 | ||
Restricted Stock Units (shares) | 31 | ||||
Restricted Stock Units | (518) | $ 31 | (549) | ||
Employee Stock Purchase Plan (shares) | 37 | ||||
Employee Stock Purchase Plan | 1,327 | $ 37 | 1,290 | ||
Cash Dividend Paid | (4,418) | (4,418) | |||
Net income | 15,718 | 15,718 | |||
Foreign Currency Translation | (2,256) | (2,256) | |||
Interest rate swap | (14) | (14) | |||
Balance (shares) at May. 31, 2018 | 26,027 | ||||
Balance at May. 31, 2018 | 577,116 | $ 26,027 | 40,545 | 538,034 | (27,490) |
Balance (shares) at Feb. 28, 2018 | 25,959 | ||||
Balance at Feb. 28, 2018 | 565,203 | $ 25,959 | 38,446 | 526,018 | (25,220) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 26,962 | ||||
Foreign Currency Translation | (1,801) | ||||
Interest rate swap | (27) | ||||
Balance (shares) at Aug. 31, 2018 | 26,050 | ||||
Balance at Aug. 31, 2018 | 586,641 | $ 26,050 | 42,787 | 544,852 | (27,048) |
Balance (shares) at May. 31, 2018 | 26,027 | ||||
Balance at May. 31, 2018 | 577,116 | $ 26,027 | 40,545 | 538,034 | (27,490) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 2,301 | $ 0 | 2,301 | ||
Restricted Stock Units (shares) | 23 | ||||
Restricted Stock Units | (36) | $ 23 | (59) | ||
Cash Dividend Paid | (4,426) | (4,426) | |||
Net income | 11,244 | 11,244 | |||
Foreign Currency Translation | 455 | 455 | |||
Interest rate swap | (13) | (13) | |||
Balance (shares) at Aug. 31, 2018 | 26,050 | ||||
Balance at Aug. 31, 2018 | 586,641 | $ 26,050 | 42,787 | 544,852 | (27,048) |
Balance (shares) at Feb. 28, 2019 | 26,115 | ||||
Balance at Feb. 28, 2019 | 603,728 | $ 26,115 | 46,141 | 560,224 | (28,752) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,350 | $ 0 | 1,350 | ||
Restricted Stock Units (shares) | 37 | ||||
Restricted Stock Units | (691) | $ 37 | (728) | ||
Cash Dividend Paid | (4,440) | (4,440) | |||
Net income | 21,284 | 21,284 | |||
Foreign Currency Translation | (1,960) | (1,960) | |||
Interest rate swap | (14) | (14) | |||
Balance (shares) at May. 31, 2019 | 26,152 | ||||
Balance at May. 31, 2019 | 619,257 | $ 26,152 | 46,763 | 577,068 | (30,726) |
Balance (shares) at Feb. 28, 2019 | 26,115 | ||||
Balance at Feb. 28, 2019 | 603,728 | $ 26,115 | 46,141 | 560,224 | (28,752) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 36,842 | ||||
Foreign Currency Translation | (1,219) | ||||
Interest rate swap | (27) | ||||
Balance (shares) at Aug. 31, 2019 | 26,221 | ||||
Balance at Aug. 31, 2019 | 634,606 | $ 26,221 | 50,211 | 588,172 | (29,998) |
Balance (shares) at May. 31, 2019 | 26,152 | ||||
Balance at May. 31, 2019 | 619,257 | $ 26,152 | 46,763 | 577,068 | (30,726) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock Compensation (shares) | 0 | ||||
Stock Compensation | 1,736 | $ 0 | 1,736 | ||
Restricted Stock Units (shares) | 18 | ||||
Restricted Stock Units | 0 | $ 18 | (18) | ||
Employee Stock Purchase Plan (shares) | 51 | ||||
Employee Stock Purchase Plan | 1,781 | $ 51 | 1,730 | 0 | |
Cash Dividend Paid | (4,454) | (4,454) | |||
Net income | 15,558 | 15,558 | |||
Foreign Currency Translation | 741 | 741 | |||
Interest rate swap | (13) | (13) | |||
Balance (shares) at Aug. 31, 2019 | 26,221 | ||||
Balance at Aug. 31, 2019 | $ 634,606 | $ 26,221 | $ 50,211 | $ 588,172 | $ (29,998) |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 6 Months Ended |
Aug. 31, 2019 | |
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. The Company is a global provider of metal coating solutions, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company has two distinct operating segments: the Energy segment and the Metal Coatings segment. 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. 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. Presentation The accompanying condensed consolidated balance sheet as of February 28, 2019 , which was derived from audited 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, 2019 , included in the Company’s Annual Report on Form 10-K 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 ending February 29, 2020 is referred to as fiscal 2020. In the opinion of management, the accompanying unaudited condensed 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, 2019 , the results of its operations for the three and six months ended August 31, 2019 and 2018 , and cash flows for the six months ended August 31, 2019 and 2018 . These interim results are not necessarily indicative of results for a full year. Reclassifications Certain prior fiscal year balances in the condensed consolidated statements of cash flows have been reclassified to conform to the current fiscal year presentation. In particular, payments for employee taxes related to net share settlement of equity awards and proceeds from the issuance of shares under the Company's Employee Stock Purchase Plan have been reclassified from operating activities to financing activities. Such reclassifications were not material. Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument s (“ASU 2016-13”), which modifies the measurement of expected credit losses of certain financial instruments, including the Company's accounts receivable and contract assets. The Company will adopt ASU 2016-13 in the first quarter of its fiscal 2021 utilizing the modified retrospective transition method. Based on the composition of the Company’s accounts receivable and contract assets, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software, in order to determine the applicable costs to capitalize and the applicable costs to expense as incurred. The Company will adopt ASU 2018-15 in the first quarter of its fiscal 2021. The standard can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company intends to adopt ASU 2018-15 using the prospective approach and the adoption is not expected to have a material impact on its consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Aug. 31, 2019 | |
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, expect per share data): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Numerator: Net income for basic and diluted earnings per common share $ 15,558 $ 11,244 $ 36,842 $ 26,962 Denominator: Denominator for basic earnings per common share–weighted average shares 26,197 26,019 26,161 26,001 Effect of dilutive securities: Employee and director equity awards 75 72 72 61 Denominator for diluted earnings per common share 26,272 26,091 26,233 26,062 Earnings per share basic and diluted: Basic earnings per common share $ 0.59 $ 0.43 $ 1.41 $ 1.04 Diluted earnings per common share $ 0.59 $ 0.43 $ 1.40 $ 1.03 |
Revenues (Notes)
Revenues (Notes) | 6 Months Ended |
Aug. 31, 2019 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues Disaggregated Revenue The following table presents disaggregated revenue by customer industry (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: Industrial - oil and gas, construction, and general $ 139,352 $ 120,305 $ 304,152 $ 271,613 Transmission and distribution 56,686 60,152 128,967 126,106 Power generation 40,152 42,330 92,194 87,304 Total net sales $ 236,190 $ 222,787 $ 525,313 $ 485,023 See Note 5 for revenue information by segment. Contract Liabilities The following table shows the changes in contract liabilities for the six months ended August 31, 2019 and 2018, respectively (in thousands): August 31, 2019 August 31, 2018 Balance at beginning of period $ 56,928 $ 22,698 Contract liabilities added during the period 18,234 21,166 Revenue recognized during the period (51,504 ) (20,101 ) Balance at end of period $ 23,658 $ 23,763 The Company did not record any revenues for the six months ended August 31, 2019 or 2018 related to performance obligations satisfied in prior periods. The increases or decreases in accounts receivable, contract assets and contract liabilities during the six months ended August 31, 2019 and 2018 were due primarily to normal timing differences between the Company’s performance and customer payments. The acquisitions described in Note 10 had no impact on contract assets or liabilities as of the date of acquisitions. The Company expects to recognize revenues of approximately $15.4 million, $5.9 million, $1.2 million and $1.2 million in fiscal 2020, 2021, 2022 and 2023 , respectively, related to the $23.7 million balance of contract liabilities as of August 31, 2019 . |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Aug. 31, 2019 | |
Share-based Compensation [Abstract] | |
Stock-based Compensation | Share-based Compensation The Company has two share-based compensation plans, the 2014 Long Term Incentive Plan (the "2014 Plan") and the Amended and Restated 2005 Long Term Incentive Plan (the “2005 Plan”). The 2014 Plan provides for broad-based equity grants to employees, including executive officers, and members of the board of directors and permits the granting of restricted shares, restricted stock units, performance awards, stock appreciation rights and other stock-based awards. The maximum number of shares that may be issued under the 2014 Plan is 1.5 million shares and, as of August 31, 2019 , the Company had approximately 1.3 million shares reserved for future issuance under this plan. The 2005 Plan permitted the granting of stock appreciation rights and other equity-based awards to certain employees. This plan was terminated upon the effective date of the 2014 Plan and no future grants may be made under the 2005 Plan. However, there were stock appreciation rights that were granted under the 2005 Plan prior to its termination that remain outstanding, and if exercised, such awards will be settled from the balance of shares available for issuance under the 2005 Plan. As of August 31, 2019 , there were 0.1 million shares available for issuance under the 2005 Plan. The 2005 Plan will be formally retired when all remaining outstanding stock appreciation rights are exercised, forfeited or expire. All outstanding stock appreciation rights will expire on or before March 1, 2021. Restricted Stock Unit Awards Restricted stock unit ("RSU") awards are valued at the market price of our common stock on the grant date. Awards generally vest ratably over a period of three years but these awards may vest earlier in accordance with the Plan’s accelerated vesting provisions. RSU awards have dividend equivalent rights (“DERs”), which entitle holders of RSUs to the same dividend value per share as holders of common stock. DERs are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs. DERs are accumulated and paid when the underlying shares vest. A summary of the Company’s non-vested restricted stock unit award activity (including DERs) for the six month period ended August 31, 2019 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested balance as of February 28, 2019 146,532 $ 48.93 Granted 89,980 43.77 Vested (52,430 ) 49.11 Forfeited (2,501 ) 47.60 Non-vested balance as of August 31, 2019 181,581 $ 47.82 Performance Share Unit Awards The Company grants performance share unit ("PSU") awards to certain employees, which also include DERs as described above. These PSU awards have a three year performance cycle and will vest and become issuable, if at all, on the third anniversary of the award date. The PSU awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods and, in certain circumstances, vesting is based on the relative performance of a predetermined group of peer companies. In addition, these PSU awards may have vesting conditions or certain vesting multipliers, which are based on the Company’s total shareholder return during such three years in comparison to a defined specific industry peer group. The Company estimates the fair value of PSU awards with performance and service conditions using the value of the Company's common stock on the date of grant. The Company estimates the fair value of PSU awards with market conditions using a Monte Carlo simulation model on the date of grant. A summary of the Company’ non-vested performance share unit award activity (including DERs) for the six month period ended August 31, 2019 is as follows: Performance Weighted Average Grant Date Fair Value Per Share Non-vested balance as of February 28, 2019 83,125 $ 50.33 Granted 49,228 46.19 Vested — — Forfeited (19,331 ) 57.47 Non-vested balance as of August 31, 2019 113,022 $ 47.49 The PSU awards in the table above are presented at the face value of the respective grants. However, the number of PSU awards that may ultimately vest can vary in a range 0% to 250% of the face amount of such awards depending on the outcome of the performance or market vesting conditions. 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 right activity for the six month period ended August 31, 2019 is as follows: SARs Weighted Average Exercise Price Outstanding as of February 28, 2019 98,184 $ 44.46 Granted — — Exercised (2,965 ) 44.58 Forfeited — — Outstanding as of August 31, 2019 95,219 $ 44.58 Exercisable as of August 31, 2019 95,219 $ 44.58 The average remaining contractual term for those stock appreciation rights outstanding and those stock appreciation rights that were exercisable as of August 31, 2019 was 1.36 years, with an aggregate intrinsic value of less than $0.1 million . Employee Stock Purchase Plan The Company also has an Employee Stock Purchase Plan ("ESPP"), 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 the Company's 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. The Company issued 51,438 shares and 37,224 shares from the ESPP during the six month period ended August 31, 2019 and 2018, respectively. Share-based Compensation Expense 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, 2019 2018 Compensation expense $ 3,086 $ 3,659 Income tax benefits $ 648 $ 823 Unrecognized compensation cost related to the Company's employee equity grants at August 31, 2019 totals $10.1 million and is expected to be recognized over a period of 2.67 years. |
Segments
Segments | 6 Months Ended |
Aug. 31, 2019 | |
Segment Reporting [Abstract] | |
Segments | Segments Segment Information Net sales and operating income (loss) by segment for each period were as follows (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: Energy $ 111,347 $ 106,515 $ 278,316 $ 253,501 Metal Coatings 124,843 116,272 246,997 231,522 Total net sales $ 236,190 $ 222,787 $ 525,313 $ 485,023 Operating income (loss): Energy $ 4,239 $ 4,273 $ 16,810 $ 14,231 Metal Coatings 28,673 22,076 58,065 47,260 Corporate (10,705 ) (9,244 ) (21,694 ) (20,690 ) Total operating income $ 22,207 $ 17,105 $ 53,181 $ 40,801 Asset balances by segment for each period were as follows (in thousands): August 31, 2019 February 28, 2019 Total assets: Energy $ 612,018 $ 630,134 Metal Coatings 489,305 440,090 Corporate 18,794 18,346 Total $ 1,120,117 $ 1,088,570 For the three and six months ended August 31, 2018, the Company recognized impairment charges of $0.8 million, which were classified within cost of sales in the consolidated statement of income and were related to property, plant and equipment in the Metal Coatings segment that was vacated or abandoned upon the consolidation of two galvanizing facilities in the Gulf Coast region of the United States. As part of the consolidation of facilities, the Company also recognized $0.5 million in employee severance and other disposal costs for the three and six months ended August 31, 2018, which were also classified within cost of sales in the consolidated statement of income. No such charges were recorded during the three and six months ended August 31, 2019. Financial Information About Geographical Areas The following table presents revenues by geographic region for each period (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: United States $ 210,668 $ 188,278 $ 441,005 $ 401,834 International 25,522 34,509 84,308 83,189 Total $ 236,190 $ 222,787 $ 525,313 $ 485,023 The following table presents fixed assets by geographic region for each period (in thousands): August 31, 2019 February 28, 2019 Property, plant and equipment, net: United States $ 192,537 $ 189,281 Canada 17,181 16,961 Other countries 4,380 3,985 Total $ 214,098 $ 210,227 |
Warranty Reserves
Warranty Reserves | 6 Months Ended |
Aug. 31, 2019 | |
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 other accrued liabilities on the condensed consolidated balance sheets. 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 the changes in the warranty reserves for the six month period ended August 31, 2019 (in thousands): Warranty Reserve Balance at February 28, 2019 $ 1,751 Warranty costs incurred (1,745 ) Additions charged to income 3,615 Balance at August 31, 2019 $ 3,621 |
Debt
Debt | 6 Months Ended |
Aug. 31, 2019 | |
Debt [Abstract] | |
Long-term Debt [Text Block] | Debt The Company's debt consisted of the following for each of the periods presented (in thousands): August 31, 2019 February 28, 2019 2017 Revolving Credit Facility $ 131,000 $ 116,000 2011 Senior Notes 125,000 125,000 Total debt, gross 256,000 241,000 Unamortized debt issuance costs (188 ) (255 ) Total debt, net $ 255,812 $ 240,745 |
Leases (Notes)
Leases (Notes) | 6 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Leases of Lessee Disclosure [Text Block] | Leases The Company is a lessee under various operating leases for facilities and equipment. Supplemental information related to the Company's portfolio of operating leases was as follows (in thousands, except years and percentages): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Operating lease cost $ 4,648 $ 4,042 $ 8,914 $ 7,972 Operating cash flows from operating leases included in lease liabilities 2,131 1,943 4,406 3,853 ROU assets obtained in exchange for new operating lease liabilities 643 120 3,149 4,166 August 31, 2019 February 28, 2019 Weighted-average remaining lease term - operating leases 8.70 years 9.23 years Weighted-average discount rate - operating leases 5.10 % 5.13 % As of August 31, 2019 , maturities of the Company's lease liabilities were as follows (in thousands): Fiscal year: Operating Leases 2020 (remaining 6 months) $ 4,166 2021 7,805 2022 7,438 2023 6,968 2024 6,181 Thereafter 25,545 Total lease payments 58,103 Less imputed interest (11,212 ) Total $ 46,891 |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes The Company’s quarterly provision for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items that occur within the quarter. The following table presents income tax related items for the periods (in thousands, except percentages): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Income tax expense $ 2,415 $ 2,738 $ 8,097 $ 7,169 Effective tax rate 13.4 % 19.6 % 18.0 % 21.0 % The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across the Company's global operations. Generally accepted accounting principles in the United States of America ("GAAP") states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company may (1) record unrecognized tax benefits as liabilities in accordance with GAAP and (2) adjust these liabilities when the Company's judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. A reconciliation of the beginning and ending balance of total unrecognized tax benefits for the six months ended August 31, 2019 is as follows (in thousands): August 31, 2019 Balance at beginning of period $ — Tax positions taken in current period: Gross increases 3,899 Balance at end of period $ 3,899 After a review of its deferred tax balances during six months ended August 31, 2019, the Company recorded unrecognized tax benefits of $3.9 million within other long-term liabilities related to the amortization of goodwill and certain book reserve balances incorrectly deducted in prior years. The amortization relates to the Company deducting more expense than permitted for tax purposes. The total unrecognized tax benefits, if recognized, would reduce income tax expense and the Company’s effective tax rate. Additionally, as a part of this review of its deferred tax balances, the Company corrected other current and deferred income tax expense amounts related to prior periods which netted to $1.4 million and were recorded as a tax benefit in the three months ended August 31, 2019. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the income tax expense. The balance in the non-current income tax payable related to penalties and interest for prior periods was $1.0 million for the three and six months ended August 31, 2019. Certain prior year tax returns are currently being examined by taxing authorities in the United States. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future. The Company has operations and taxable presence in multiple jurisdictions in the U.S. and outside of the U.S. in Canada, the Netherlands, China, and Brazil. The tax positions of the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions around the world. The Company currently considers U.S. federal and state and Canada, to be major tax jurisdictions. The Company’s U.S. federal and state tax returns since February 28, 2016 remain open to examination. With some exceptions, tax years prior to fiscal 2016 in jurisdictions outside of U.S. are generally closed. The statute of limitations for fiscal year end 2016 will expire in November 2019. The Company anticipates it is reasonably possible that a decrease of unrecognized tax benefits up to approximately $1.4 million may occur in the next 12 months, as the applicable statutes of limitations lapse. |
Acquisitions
Acquisitions | 6 Months Ended |
Aug. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Acquisitions In April 2019, the Company completed the acquisition of all the outstanding shares of K2 Partners, Inc. (“K2”) and Tennessee Galvanizing, Inc. ("Tennessee Galvanizing"), two privately held companies. K2 provides powder coating and electroplating solutions to customers in the Midwest and Southeast from locations in Texas and Florida. Tennessee Galvanizing provides galvanizing solutions to customers throughout the United States. These acquisitions expand the Company's geographical reach in metal coating solutions and broaden its offerings in strategic markets. The goodwill arising from these acquisitions was allocated to the Metal Coatings segment and is not deductible for income tax purposes. In August 2019, the Company completed the acquisition of the assets of NuZinc, LLC, a privately held plating company in the Dallas-Fort Worth area. The acquisition will increase the Company's footprint in electroplating solutions within its Metal Coatings segment. The goodwill arising from this acquisition was allocated to the Metal Coatings segment and is deductible for income tax purposes. The fair values of the net assets acquired, including property, plant and equipment, intangibles and goodwill may be subject to change as additional information is received and finalized. Accordingly, the provisional measurements of fair value for these items are subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition dates. The Company paid approximately $ 39.9 million for these acquisitions, net of cash acquired. These acquisitions were not significant individually or in the aggregate. Accordingly, disclosures of the preliminary purchase price allocations and unaudited pro forma results of operations have not been provided. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Aug. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In September 2019, the Company completed the acquisition of all the assets of Preferred Industries, Ltd. ("Preferred"), a privately held company based in the Dallas-Fort Worth area. Preferred provides powder and e-coating solutions to the automotive, HVAC, marine, transportation, medical, industrial, and plastics industries. The acquisition will broaden the Company's offerings and expand its network of surface technology plants. This acquisition will be included in the Metal Coatings segment. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Aug. 31, 2019 | |
Accounting Policies [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. The Company is a global provider of metal coating solutions, welding solutions, specialty electrical equipment and highly engineered services to the power generation, transmission, distribution, refining and industrial markets. The Company has two distinct operating segments: the Energy segment and the Metal Coatings segment. 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. 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. Presentation The accompanying condensed consolidated balance sheet as of February 28, 2019 , which was derived from audited 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, 2019 , included in the Company’s Annual Report on Form 10-K 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 ending February 29, 2020 is referred to as fiscal 2020. In the opinion of management, the accompanying unaudited condensed 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, 2019 , the results of its operations for the three and six months ended August 31, 2019 and 2018 , and cash flows for the six months ended August 31, 2019 and 2018 . These interim results are not necessarily indicative of results for a full year. |
New Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument s (“ASU 2016-13”), which modifies the measurement of expected credit losses of certain financial instruments, including the Company's accounts receivable and contract assets. The Company will adopt ASU 2016-13 in the first quarter of its fiscal 2021 utilizing the modified retrospective transition method. Based on the composition of the Company’s accounts receivable and contract assets, current market conditions, and historical credit loss activity, the adoption of ASU 2016-13 is not expected to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"), which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software, in order to determine the applicable costs to capitalize and the applicable costs to expense as incurred. The Company will adopt ASU 2018-15 in the first quarter of its fiscal 2021. The standard can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company intends to adopt ASU 2018-15 using the prospective approach and the adoption is not expected to have a material impact on its consolidated financial statements. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
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, expect per share data): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Numerator: Net income for basic and diluted earnings per common share $ 15,558 $ 11,244 $ 36,842 $ 26,962 Denominator: Denominator for basic earnings per common share–weighted average shares 26,197 26,019 26,161 26,001 Effect of dilutive securities: Employee and director equity awards 75 72 72 61 Denominator for diluted earnings per common share 26,272 26,091 26,233 26,062 Earnings per share basic and diluted: Basic earnings per common share $ 0.59 $ 0.43 $ 1.41 $ 1.04 Diluted earnings per common share $ 0.59 $ 0.43 $ 1.40 $ 1.03 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | Disaggregated Revenue The following table presents disaggregated revenue by customer industry (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: Industrial - oil and gas, construction, and general $ 139,352 $ 120,305 $ 304,152 $ 271,613 Transmission and distribution 56,686 60,152 128,967 126,106 Power generation 40,152 42,330 92,194 87,304 Total net sales $ 236,190 $ 222,787 $ 525,313 $ 485,023 |
Contract with Customer, Asset and Liability [Table Text Block] | Contract Liabilities The following table shows the changes in contract liabilities for the six months ended August 31, 2019 and 2018, respectively (in thousands): August 31, 2019 August 31, 2018 Balance at beginning of period $ 56,928 $ 22,698 Contract liabilities added during the period 18,234 21,166 Revenue recognized during the period (51,504 ) (20,101 ) Balance at end of period $ 23,658 $ 23,763 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation, Performance Shares Award Unvested Activity [Table Text Block] | A summary of the Company’ non-vested performance share unit award activity (including DERs) for the six month period ended August 31, 2019 is as follows: Performance Weighted Average Grant Date Fair Value Per Share Non-vested balance as of February 28, 2019 83,125 $ 50.33 Granted 49,228 46.19 Vested — — Forfeited (19,331 ) 57.47 Non-vested balance as of August 31, 2019 113,022 $ 47.49 |
Restricted Stock Unit Awards Non-Vested | A summary of the Company’s non-vested restricted stock unit award activity (including DERs) for the six month period ended August 31, 2019 is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Non-vested balance as of February 28, 2019 146,532 $ 48.93 Granted 89,980 43.77 Vested (52,430 ) 49.11 Forfeited (2,501 ) 47.60 Non-vested balance as of August 31, 2019 181,581 $ 47.82 |
Stock Appreciation Rights and Option Awards | A summary of the Company’s stock appreciation right activity for the six month period ended August 31, 2019 is as follows: SARs Weighted Average Exercise Price Outstanding as of February 28, 2019 98,184 $ 44.46 Granted — — Exercised (2,965 ) 44.58 Forfeited — — Outstanding as of August 31, 2019 95,219 $ 44.58 Exercisable as of August 31, 2019 95,219 $ 44.58 |
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, 2019 2018 Compensation expense $ 3,086 $ 3,659 Income tax benefits $ 648 $ 823 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Segment Reporting Information [Line Items] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Net sales and operating income (loss) by segment for each period were as follows (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: Energy $ 111,347 $ 106,515 $ 278,316 $ 253,501 Metal Coatings 124,843 116,272 246,997 231,522 Total net sales $ 236,190 $ 222,787 $ 525,313 $ 485,023 Operating income (loss): Energy $ 4,239 $ 4,273 $ 16,810 $ 14,231 Metal Coatings 28,673 22,076 58,065 47,260 Corporate (10,705 ) (9,244 ) (21,694 ) (20,690 ) Total operating income $ 22,207 $ 17,105 $ 53,181 $ 40,801 |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | Asset balances by segment for each period were as follows (in thousands): August 31, 2019 February 28, 2019 Total assets: Energy $ 612,018 $ 630,134 Metal Coatings 489,305 440,090 Corporate 18,794 18,346 Total $ 1,120,117 $ 1,088,570 |
Revenue from External Customers by Geographic Areas [Table Text Block] | The following table presents revenues by geographic region for each period (in thousands): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Net sales: United States $ 210,668 $ 188,278 $ 441,005 $ 401,834 International 25,522 34,509 84,308 83,189 Total $ 236,190 $ 222,787 $ 525,313 $ 485,023 |
Long-lived Assets by Geographic Areas [Table Text Block] | The following table presents fixed assets by geographic region for each period (in thousands): August 31, 2019 February 28, 2019 Property, plant and equipment, net: United States $ 192,537 $ 189,281 Canada 17,181 16,961 Other countries 4,380 3,985 Total $ 214,098 $ 210,227 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Changes in the warranty reserves | The following table shows the changes in the warranty reserves for the six month period ended August 31, 2019 (in thousands): Warranty Reserve Balance at February 28, 2019 $ 1,751 Warranty costs incurred (1,745 ) Additions charged to income 3,615 Balance at August 31, 2019 $ 3,621 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Debt [Abstract] | |
Schedule of Debt [Table Text Block] | The Company's debt consisted of the following for each of the periods presented (in thousands): August 31, 2019 February 28, 2019 2017 Revolving Credit Facility $ 131,000 $ 116,000 2011 Senior Notes 125,000 125,000 Total debt, gross 256,000 241,000 Unamortized debt issuance costs (188 ) (255 ) Total debt, net $ 255,812 $ 240,745 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Lease, Disclosure [Table Text Block] | Supplemental information related to the Company's portfolio of operating leases was as follows (in thousands, except years and percentages): Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Operating lease cost $ 4,648 $ 4,042 $ 8,914 $ 7,972 Operating cash flows from operating leases included in lease liabilities 2,131 1,943 4,406 3,853 ROU assets obtained in exchange for new operating lease liabilities 643 120 3,149 4,166 August 31, 2019 February 28, 2019 Weighted-average remaining lease term - operating leases 8.70 years 9.23 years Weighted-average discount rate - operating leases 5.10 % 5.13 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | As of August 31, 2019 , maturities of the Company's lease liabilities were as follows (in thousands): Fiscal year: Operating Leases 2020 (remaining 6 months) $ 4,166 2021 7,805 2022 7,438 2023 6,968 2024 6,181 Thereafter 25,545 Total lease payments 58,103 Less imputed interest (11,212 ) Total $ 46,891 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Three Months Ended August 31, Six Months Ended August 31, 2019 2018 2019 2018 Income tax expense $ 2,415 $ 2,738 $ 8,097 $ 7,169 Effective tax rate 13.4 % 19.6 % 18.0 % 21.0 % |
Income Taxes Unrecognized Tax B
Income Taxes Unrecognized Tax Benefits (Tables) | 6 Months Ended |
Aug. 31, 2019 | |
Unrecognized Tax Benefits [Abstract] | |
Summary of Income Tax Contingencies [Table Text Block] | A reconciliation of the beginning and ending balance of total unrecognized tax benefits for the six months ended August 31, 2019 is as follows (in thousands): August 31, 2019 Balance at beginning of period $ — Tax positions taken in current period: Gross increases 3,899 Balance at end of period $ 3,899 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2019 | May 31, 2019 | Aug. 31, 2018 | May 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Numerator: | ||||||
Net income for basic and diluted earnings per common share | $ 15,558 | $ 21,284 | $ 11,244 | $ 15,718 | $ 36,842 | $ 26,962 |
Denominator: | ||||||
Denominator for basic earnings per common share-weighted average shares (shares) | 26,197 | 26,019 | 26,161 | 26,001 | ||
Effect of dilutive securities: | ||||||
Employee and Director stock awards (shares) | 75 | 72 | 72 | 61 | ||
Denominator for diluted earnings per common share (shares) | 26,272 | 26,091 | 26,233 | 26,062 | ||
Earnings per share basic and diluted: | ||||||
Basic earnings per Common share (usd per share) | $ 0.59 | $ 0.43 | $ 1.41 | $ 1.04 | ||
Diluted earnings per common share (usd per share) | $ 0.59 | $ 0.43 | $ 1.40 | $ 1.03 |
Revenues Disaggregated Revenues
Revenues Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 236,190 | $ 222,787 | $ 525,313 | $ 485,023 |
Industrial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 139,352 | 120,305 | 304,152 | 271,613 |
Transmission and Distribution [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 56,686 | 60,152 | 128,967 | 126,106 |
Power Generation [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 40,152 | $ 42,330 | $ 92,194 | $ 87,304 |
Revenues Contract Liability (De
Revenues Contract Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Aug. 31, 2019 | Aug. 31, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Contract Liability [Abstract] | ||||
Contract with Customer, Liability | $ 23,658 | $ 23,763 | $ 56,928 | $ 22,698 |
Increase (Decrease) in Contract with Customer, Liability | 18,234 | 21,166 | ||
Contract with Customer, Liability, Revenue Recognized | $ (51,504) | $ (20,101) | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | The Company expects to recognize revenues of approximately $15.4 million, $5.9 million, $1.2 million and $1.2 million in fiscal 2020, 2021, 2022 and 2023 |
Revenues Future Revenues (Detai
Revenues Future Revenues (Details) $ in Millions | Aug. 31, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 15.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 5.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | 1.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 1.2 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - Restricted Stock Units (RSUs) [Member] | 6 Months Ended |
Aug. 31, 2019$ / sharesshares | |
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, 2019 | shares | 146,532 |
Granted (shares) | shares | 89,980 |
Vested (shares) | shares | (52,430) |
Forfeited (shares) | shares | (2,501) |
Non-vested balance as of August 31, 2019 | shares | 181,581 |
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, 2019 | $ / shares | $ 48.93 |
Granted, Weighted Average Grant Date Fair Value (usd per share) | $ / shares | 43.77 |
Vested, Weighted Average Grant Date Fair Value (usd per share) | $ / shares | 49.11 |
Forfeited, Weighted Average Grant Date Fair Value (usd per share) | $ / shares | 47.60 |
Non-vested balance as of August 31, 2019 | $ / shares | $ 47.82 |
Stock-based Compensation (Det_2
Stock-based Compensation (Details 1) - Stock Appreciation Rights (SARs) [Member] - $ / shares | 6 Months Ended | |
Aug. 31, 2019 | Feb. 28, 2019 | |
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 | 95,219 | 98,184 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 44.58 | $ 44.46 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments, Number of Shares [Roll Forward] | ||
Granted (shares) | 0 | |
Exercised (shares) | (2,965) | |
Forfeited (shares) | 0 | |
Exercisable as of August 31, 2019 | 95,219 | |
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 | |
Exercised, Weighted Average Exercise Price (usd per share) | 44.58 | |
Forfeited, Weighted Average Exercise Price (usd per share) | 0 | |
Exercisable as of August 31, 2019 | $ 44.58 |
Stock-based Compensation (Det_3
Stock-based Compensation (Details 2) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Share-based Compensation [Abstract] | ||
Share-based Compensation | $ 3,086 | $ 3,659 |
Share based compensation expense and related income tax benefits | ||
Income tax benefits | $ 648 | $ 823 |
Stock-based Compensation (Det_4
Stock-based Compensation (Details Textual) | 6 Months Ended | |
Aug. 31, 2019USD ($)share_based_compensation_plan$ / sharesshares | Feb. 28, 2019$ / sharesshares | |
Share Based Compensation (Textual) [Abstract] | ||
Number Of Share-Based Compensation Plans | share_based_compensation_plan | 2 | |
Unrecognized compensation cost | $ | $ 10,100,000 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 8 months 1 day | |
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 | 113,022 | 83,125 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ / shares | $ 47.49 | $ 50.33 |
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 | 49,228 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 46.19 | |
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 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (19,331) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | $ 57.47 | |
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 | 1 year 4 months 9 days | |
Outstanding Aggregate intrinsic value | $ | $ 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 | |
2014 Long Term Incentive Plan [Member] | ||
Share Based Compensation (Textual) [Abstract] | ||
Shares authorized (shares) | 1,500,000 | |
Share for future issuance (shares) | 1,300,000 | |
2005 Long Term Incentive Plan [Member] | ||
Share Based Compensation (Textual) [Abstract] | ||
Shares authorized (shares) | 100,000 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | Feb. 28, 2019 | |
Segment Reporting Information [Line Items] | |||||
Property, Plant and Equipment, Net | $ 214,098 | $ 214,098 | $ 210,227 | ||
Operations and assets by segment | |||||
Operating Income | 22,207 | $ 17,105 | 53,181 | $ 40,801 | |
Assets | 1,120,117 | 1,120,117 | 1,088,570 | ||
Revenues | 236,190 | 222,787 | 525,313 | 485,023 | |
Energy | |||||
Operations and assets by segment | |||||
Operating Income | 4,239 | 4,273 | 16,810 | 14,231 | |
Assets | 612,018 | 612,018 | 630,134 | ||
Revenues | 111,347 | 106,515 | 278,316 | 253,501 | |
Metal Coatings | |||||
Operations and assets by segment | |||||
Operating Income | 28,673 | 22,076 | 58,065 | 47,260 | |
Assets | 489,305 | 489,305 | 440,090 | ||
Revenues | 124,843 | 116,272 | 246,997 | 231,522 | |
Corporate | |||||
Operations and assets by segment | |||||
Operating Income | (10,705) | (9,244) | (21,694) | (20,690) | |
Corporate | |||||
Operations and assets by segment | |||||
Assets | 18,794 | 18,794 | 18,346 | ||
UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Property, Plant and Equipment, Net | 192,537 | 192,537 | 189,281 | ||
Operations and assets by segment | |||||
Revenues | 210,668 | 188,278 | 441,005 | 401,834 | |
CANADA | |||||
Segment Reporting Information [Line Items] | |||||
Property, Plant and Equipment, Net | 17,181 | 17,181 | 16,961 | ||
Other Countries [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Property, Plant and Equipment, Net | 4,380 | 4,380 | $ 3,985 | ||
International [Member] | |||||
Operations and assets by segment | |||||
Revenues | $ 25,522 | $ 34,509 | $ 84,308 | $ 83,189 |
Warranty Reserves (Details)
Warranty Reserves (Details) $ in Thousands | 6 Months Ended |
Aug. 31, 2019USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Opening Balance | $ 1,751 |
Warranty costs incurred | 1,745 |
Closing Balance | 3,621 |
Product Warranty Accrual, Warranties Issued | $ 3,615 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Aug. 31, 2019 | Feb. 28, 2019 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 255,812 | $ 240,745 |
Long-term Debt, Gross | 256,000 | 241,000 |
Unamortized Debt Issuance Expense | (188) | (255) |
Long-term Debt, Excluding Current Maturities | 255,812 | 240,745 |
Senior Notes [Member] | Unsecured Senior Notes Due January 2021 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | 125,000 | 125,000 |
Line of Credit [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 131,000 | $ 116,000 |
Leases Lease Information (Detai
Leases Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | Feb. 28, 2019 | |
Leases [Abstract] | |||||
Operating Lease, Weighted Average Remaining Lease Term | 8 years 8 months 12 days | 8 years 8 months 12 days | 9 years 2 months 23 days | ||
Operating Lease, Cost | $ 4,648 | $ 4,042 | $ 8,914 | $ 7,972 | |
Operating Lease, Payments | 2,131 | 1,943 | 4,406 | 3,853 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 643 | $ 120 | $ 3,149 | $ 4,166 | |
Operating Lease, Weighted Average Discount Rate, Percent | 5.10% | 5.10% | 5.13% |
Leases Lease Maturities (Detail
Leases Lease Maturities (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Maturities [Abstract] | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 4,166 |
Lessee, Operating Lease, Liability, Payments, Due Year Two | 7,805 |
Lessee, Operating Lease, Liability, Payments, Due Year Three | 7,438 |
Lessee, Operating Lease, Liability, Payments, Due Year Four | 6,968 |
Lessee, Operating Lease, Liability, Payments, Due Year Five | 6,181 |
Lessee, Operating Lease, Liability, Payments, Due after Year Five | 25,545 |
Lessee, Operating Lease, Liability, Payments, Due | 58,103 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (11,212) |
Operating Lease, Liability | $ 46,891 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Aug. 31, 2019 | Aug. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income Tax Expense (Benefit) | $ 2,415 | $ 2,738 | $ 8,097 | $ 7,169 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 13.40% | 19.60% | 18.00% | 21.00% |
Income Taxes Unrecognized Tax_2
Income Taxes Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 31, 2019 | Feb. 28, 2019 | |
Income Tax Contingency [Line Items] | ||
Unrecognized Tax Benefits | $ 3,899 | $ 0 |
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 3,899 |
Income Taxes Unrecognized Tax_3
Income Taxes Unrecognized Tax Benefits (Narrative) (Details) $ in Millions | Aug. 31, 2019USD ($) |
Unrecognized Tax Benefits Narrative [Abstract] | |
Income Tax Examination, Penalties and Interest Accrued | $ 1 |
Decrease in Unrecognized Tax Benefits is Reasonably Possible | $ 1.4 |
Acquisitions (Details)
Acquisitions (Details) $ in Millions | 6 Months Ended |
Aug. 31, 2019USD ($) | |
Business Combinations [Abstract] | |
Business Combination, Consideration Transferred | $ 39.9 |