AZZ INC

Previous wording

Our results for the three months ended May 31, 2025 (the "current quarter") were favorably impacted primarily by the recognition of equity in earnings for the excess distribution from the AVAIL JV, and by the growth in demand for our manufactured solutions in the construction andutilities industries.

Current wording

Our results for the six months ended August 31, 2025 (the "current six-month period") were favorably impacted primarily by the recognition of equity in earnings for the AVAIL JV, which included the gain from AVAIL's sale of the Electrical Products Group business to nVent Electric plc., and by the growth in demand for our manufactured solutions in the construction andutilities industries.

Previous wording

The equity in earnings recognized following the AVAIL JV distribution was the primary contributor to net income of $170.9 million for the three months ended May 31, 2025. Our operating results for three months ended May 31, 2025, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found below under "Results of Operations."

Current wording

The equity in earnings from the AVAIL JV was the primary contributor to net income of $260.3 million for the current six-month period. Our operating results for the current six-month period, including operating results by segment, are described in the summary on the following page, and detailed descriptions can be found below under "Results of Operations."

Previous wording

Our operations generated $314.8 million of cash for the current three-month period. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found below under "Liquidity and Capital Resources."

Current wording

Our operations generated $373.2 million of cash for the current six-month period. The components of our liquidity and descriptions of our cash flows, capital investments, and other matters impacting our liquidity and capital resources can be found below under "Liquidity and Capital Resources."

Previous wording

While it is difficult to predict future North American economic activity and its impact on the demand for our galvanizing and coil coating solutions, as well the impact that political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the second quarter of fiscal 2026.

Current wording

While it is difficult to predict future North American economic activity and its impact on the demand for our galvanizing and coil coating solutions, as well the impact that political or regulatory developments may have on us, we have noted several factors below that have impacted or may impact our results of operations during the third quarter of fiscal 2026.

Previous wording

•Customer inventories for our AZZ Metal Coatings segment remain consistent, which should support the continued demand for our metal coatings solutions.

Current wording

•Volumes for our AZZ Metal Coatings segment remain at normal seasonal levels, which should support the continued demand for our metal coatings solutions.

Previous wording

We are a provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets, predominantly in North America. We operate three distinct business segments, the AZZ Metal Coatings segment, the AZZ Precoat Metals segment, and the AZZ Infrastructure Solutions segment. Our discussion and analysis of financial condition and results of operations is divided by each of our segments, along with corporate costs and other costs not specifically identifiable to a segment. For a reconciliation of segment operating income to consolidated operating income, see "Item I. Financial Statements—Note 6". Management believes that the most meaningful analysis of our results of operations is to analyze our performance by segment. We use sales and operating income by segment to evaluate the performance of our segments. Segment operating income consists of sales less cost of sales and selling, general and administrative expenses that are specifically identifiable to a segment.

Current wording

We are a provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets, predominantly in North America. We operate three distinct business segments, the AZZ Metal Coatings segment, the AZZ Precoat Metals segment, and the AZZ Infrastructure Solutions segment. Our discussion and analysis of financial condition and results of operations is divided by each of our segments, along with corporate costs and other costs not specifically identifiable to a segment. Management believes that the most meaningful analysis of our results of operations is to analyze our performance by segment. We use sales and operating income by segment to evaluate the performance of our segments. Segment operating income consists of sales less cost of sales and selling, general and administrative expenses that are specifically identifiable to a segment.

Previous wording

For the current quarter, consolidated sales increased $8.8 million, or 2.1%, compared to the three months ended May 31, 2024 (the "prior year quarter").

Current wording

For the three months ended August 31, 2025 (the "current quarter"), consolidated sales increased $8.3 million, or 2.0%, compared to the three months ended August 31, 2024 (the "prior year quarter").

Previous wording

Sales for the AZZ Metal Coatings segment increased $10.6 million, or 6.0%, for the current quarter, compared to the prior year quarter. The increase was primarily due to $11.7 million resulting from a higher volume of steel processed, and an increase in other sales of $0.4 million, partially offset by a decrease in selling price of $1.5 million, due to product mix.

Current wording

Sales for the AZZ Metal Coatings segment increased $18.5 million, or 10.8%, for the current quarter, compared to the prior year quarter. The increase was primarily due to $22.1 million resulting from a higher volume of steel processed, partially offset by a decrease in selling price of $2.8 million, due to product mix, and a decrease in other sales of $0.9 million.

Previous wording

Sales for the AZZ Precoat Metals segment decreased $1.8 million, or 0.8% for the current quarter, compared to the prior year quarter. The decrease is due to a lower volume of coil coated and a decrease in other sales of $0.4 million, partially offset by an increase in the average price due to product mix.

Current wording

Sales for the AZZ Precoat Metals segment decreased $10.2 million, or 4.3% for the current quarter, compared to the prior year quarter. The decrease is due to a lower volume of coil coated, partially offset by an increase in the average price due to vendor price increases that were passed through to the customer.

Previous wording

For the current quarter, consolidated operating income was $69.5 million, a decrease of $0.2 million, or 0.3%, compared to the prior year quarter.

Current wording

For the current quarter, consolidated operating income was $68.5 million, an increase of $0.8 million, or 1.2%, compared to the prior year quarter.

Previous wording

Operating income for the AZZ Metal Coatings segment increased $2.8 million, or 5.8%, for the current quarter, compared to the prior year quarter. The increase was due to increased sales as described above, partially offset by an increase in cost of sales. The increase in cost of sales of $7.6 million was primarily due to a $4.8 million increase in overhead costs, a $1.5 million increase in labor costs, and a $2.1 million increase in zinc cost. The increase in overhead costs was primarily due to restructuring charges of $3.8 million for two surface technology facilities. Selling, general and administrative expense increased $0.4 million, driven by an increase in stock-based compensation and the recognition of bad debt expense in the current quarter, compared to prior year quarter.

Current wording

Operating income for the AZZ Metal Coatings segment increased $4.0 million, or 8.4%, for the current quarter, compared to the prior year quarter. The increase was due to increased sales as described above, offset by an increase in cost of sales. The increase in cost of sales of $14.7 million was primarily due to a $7.9 million increase in variable costs, a $4.8 million increase in zinc cost, and a $2.6 million increase in labor costs, offset by a decrease in other direct costs of $0.6 million. Selling, general and administrative expense decreased $0.3 million.

Previous wording

Operating income for the AZZ Precoat Metals segment decreased $0.7 million, or 1.8% for the current quarter, compared to the prior year quarter. The decrease is primarily due to decreased sales as described above, offset by a decrease in cost of sales of $0.3 million, primarily due to variable costs related to the decreased volume of coil coated, and a decrease in selling, general and administrative expense of $0.7 million.

Current wording

Operating income for the AZZ Precoat Metals segment decreased $6.0 million, or 14.1% for the current quarter, compared to the prior year quarter. Thedecrease was primarily due to decreased sales as described above. In addition, cost of sales decreased by $4.2 million, primarily due to variable costs related to the decreased volume of coil coated, partially offset by an increase in cost of sales for the new plant in Washington, Missouri, which became operational during the first quarter of fiscal 2026.

Previous wording

Interest expense for the current quarter decreased $4.2 million, to $18.6 million, compared to $22.8 million for the prior year quarter. The decrease in interest expense is primarily attributable to a decrease in the weighted average debt outstanding of $96.6 million and a decrease in the weighted average interest rate of 2.29% in the current quarter, compared to the prior year quarter. The decrease in interest expense is partially offset by lower capitalized interest associated with the construction of the new plant in Washington, Missouri, for the current quarter, compared to the prior year quarter.

Current wording

Interest expense for the current quarter decreased $8.2 million, to $13.7 million, compared to $21.9 million for the prior year quarter. The decrease in interest expense was primarily attributable to a decrease in the weighted average debt outstanding of $304.4 million and a decrease in the weighted average interest rate of 1.77% in the current quarter, compared to the prior year quarter. The decrease in interest expense is partially offset by lower capitalized interest associated with the construction of the new plant in Washington, Missouri, for the current quarter, compared to the prior year quarter.

Previous wording

Equity in earnings of unconsolidated subsidiaries for the current quarter increased $169.7 million, to $173.5 million, compared to $3.8 million in the prior year quarter. The increase is due to the recognition of a gain for a distribution in excess of our investment balance of $165.8 million from the AVAIL JV, following the sale of their Electrical Products Group in the current quarter. See "Item I. Financial Statements—Note 7" for more information about the AVAIL JV.

Current wording

Equity in earnings of unconsolidated subsidiaries for the current quarter increased $57.9 million to $59.3 million, compared to $1.5 million in the prior year quarter. The increase was due to the recognition of a gain of $109.4 million following the sale of AVAIL's Electrical Products Group, offset by an impairment loss of $45.9 million recognized on the AVAIL JV to reduce the carrying value to estimated fair value, and a decrease in our proportionate share of net losses of $5.6 million. See "Item I. Financial Statements—Note 8" for more information about the AVAIL JV.

Previous wording

Corporate selling, general and administrative expenses increased $2.2 million, or 12.1%, for the current quarter, compared to the prior year quarter. The increase was primarily due to the adoption of the Executive Retiree LTI Program and the acceleration of expense for the related stock awards of $1.8 million, and an increase in employee benefits expense.

Current wording

Corporate selling, general and administrative expenses decreased $0.6 million, or 1.5%, for the current six-month period, compared to the prior year six-month period. The decrease was primarily due to decreases in compensation costs, primarily due to retirement and other severance costs recognized in the prior year, partially offset by an increase in stock-based compensation in the current six-month period, primarily due to the adoption of the Executive Retiree LTI Program and the acceleration of expense for the related stock awards.

Previous wording

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 generally include cash dividend payments, capital improvements, debt repayment and acquisitions. Based on our current financial condition and current operations, 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.

Current wording

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 generally include working capital needs, capital improvements, quarterly cash dividends, acquisitions and other general corporate purposes. Based on our current financial condition and current operations, 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.

Previous wording

As of May 31, 2025, our total liquidity of $309.4 million consisted of available capacity on our Revolving Credit Facility of $306.3 million and cash and cash equivalents of $3.0 million.

Current wording

As of August 31, 2025, our total liquidity of $362.2 million consisted of available capacity on our Revolving Credit Facility and Receivables Securitization Facility of $361.3 million and cash and cash equivalents of $0.9 million.

Previous wording

Net cash provided by operating activities for the current three-month period was $314.8 million, driven primarily by net income of $170.9 million, adjusted to exclude non-cash charges, net of non-cash income of $142.0 million, a cash distribution received on the investment in the AVAIL JV of $273.2 million, an increase in cash resulting from a reduction in working capital of $17.8 million, and a decrease in cash resulting from changes in other long-term assets and liabilities, including deferred taxes, of $5.1 million. The reduction in working capital is due primarily to increases in accounts payable, other accrued liabilities and income taxes payable, as well as a reduction in inventories; partially offset by increases in accounts receivable, prepaid expenses and contract assets due to higher sales. Net cash provided by operating activities was used to fund $20.9 million of capital expenditures, make net payments on long-term debt and finance leases of $285.8 million, make dividend payments of $5.1 million and make payments for taxes related to net share settlement of equity awards of $4.6 million.

Current wording

Net cash provided by operating activities for the current six-month period was $373.2 million, driven primarily by net income of $260.3 million, adjusted to exclude non-cash charges, net of non-cash income of $171.7 million, a cash distribution received on the investment in the AVAIL JV of $273.2 million, a decrease in cash resulting from an increase in working capital of $5.7 million, and an increase in cash resulting from changes in other long-term assets and liabilities, including deferred taxes, of $17.1 million. The increase in working capital is due primarily to decreases in accrued liabilities and increases in accounts receivable and prepaid expenses, offset by increases in accounts payable and income taxes payable, and decreases in inventories and contract assets. Net cash provided by operating activities was used to fund $40.2 million of capital expenditures, make net payments on long-term debt and finance leases of $291.4 million, make dividend payments of $11.1 million and make payments for taxes related to net share settlement of equity awards of $5.0 million.

Previous wording

Net cash provided by operating activities for the prior year three-month period was $71.9 million, driven primarily by net income of $39.6 million, adjusted to exclude non-cash charges, net of non-cash income of $22.5 million and an increase in cash resulting from an decrease in working capital of $7.6 million, partially offset by a decrease in cash resulting from other long-term assets and liabilities, including deferred taxes, of $1.7 million. Net cash provided by operating activities was used to fund $27.4 million of capital expenditures, make net payments on long-term debt and finance leases liabilities of $25.2 million, make dividend payments of $7.9 million and make payments for taxes related to net share settlement of equity awards of $4.6 million.

Current wording

Net cash provided by operating activities for the prior year six-month period was $119.4 million, driven primarily by net income of $75.0 million, adjusted to exclude non-cash charges, net of non-cash income of $48.6 million and a decrease in cash resulting from an increase in working capital of $8.5 million, partially offset by a decrease in cash resulting from other long-term assets and liabilities, including deferred taxes, of $0.9 million. Net cash provided by operating activities was used to fund $59.5 million of capital expenditures, make net payments on long-term debt and finance leases liabilities of $45.4 million, make dividend payments of $12.9 million and make payments for taxes related to net share settlement of equity awards of $5.0 million.

Previous wording

i. provides for a senior secured initial term loan in the aggregate principal amount of $1.3 billion (the "Term Loan B"), due May 13, 2029, which is secured by substantially all of the assets of the Company; as of May 31, 2025, the outstanding balance of the Term Loan B was $534.9 million;

Current wording

i. provides for a senior secured initial term loan in the aggregate principal amount of $1.3 billion (the "Term Loan B"), due May 13, 2029, which is secured by substantially all of the assets of the Company; as of August 31, 2025, the outstanding balance of the Term Loan B was $434.9 million;

Previous wording

iv. borrowings under the Term Loan B bear an interest rate of Secured Overnight Financing Rate ("SOFR") plus 2.50% and the Revolving Credit Facility bears a leverage-based rate with various tiers between 1.75% and 2.75%; as of May 31, 2025, the interest rate was SOFR plus 2.00%;

Current wording

iv. borrowings under the Term Loan B bear an interest rate of Secured Overnight Financing Rate ("SOFR") plus 1.75% and the Revolving Credit Facility bears a leverage-based rate with various tiers between 1.75% and 2.75%; as of August 31, 2025, the interest rate was SOFR plus 1.75%;

Previous wording

We primarily utilize proceeds from the Revolving Credit Facility to finance working capital needs, capital improvements, quarterly cash dividends, acquisitions and other general corporate purposes.

Current wording

We primarily utilize proceeds from the Revolving Credit Facility to finance timing fluctuations of working capital needs, capital improvements, quarterly cash dividends, acquisitions and other general corporate purposes.

Previous wording

As defined in the 2022 Credit Agreement, quarterly prepayments were due against the outstanding principal of the Term Loan B and were payable on the last business day of each May, August, November and February, beginning August 31, 2022, in a quarterly aggregate principal amount of $3.25 million, with the entire remaining principal amount due on May 13, 2029, the maturity date. Additional prepayments made against the Term Loan B contribute to these required quarterly payments. Due to prepayments made against the Term Loan B since August 31, 2022, the quarterly mandatory principal payment requirement has been met, and the quarterly payments of $3.25 million are no longer required.

Current wording

As defined in the 2022 Credit Agreement, quarterly prepayments were due against the outstanding principal of the Term Loan B and were payable on the last business day of each May, August, November and February, beginning August 31, 2022, in a quarterly aggregate principal amount of $3.25 million, with the entire remaining principal amount due on May 13, 2029, the maturity date. Additional prepayments made against the Term Loan B contributed to these required quarterly payments. Due to prepayments made against the Term Loan B since August 31, 2022, the quarterly mandatory principal payment requirement has been met, and the quarterly payments of $3.25 million are no longer required.

Previous wording

The weighted average interest rate for our outstanding debt, including the Revolving Credit Facility and the Term Loan B, was 6.78% and 8.09% for the three months ended May 31, 2025 and 2024, respectively.

Current wording

The weighted average interest rate for our outstanding debt, including the Revolving Credit Facility, the Term Loan B, and Receivables Securitization Facility was 6.49% and 8.03% for the six months ended August 31, 2025 and 2024, respectively. We are also obligated to pay a leverage-based commitment fee with various tiers between 0.2% and 0.3% per year for unused amounts under the Revolving Credit Facility. As of August 31, 2025, the commitment fee rate was 0.20%.

Previous wording

As of May 31, 2025, we had $614.9 million of debt outstanding on the Revolving Credit Facility and the Term Loan B, with varying maturities through fiscal 2030. We had approximately $306.3 million of additional credit available as of May 31, 2025.

Current wording

As of August 31, 2025, we had $609.9 million of debt outstanding, with varying maturities through fiscal 2030. We had approximately $361.3 million of additional credit available as of August 31, 2025.

Previous wording

We manage our exposure to fluctuations in interest rates on our floating-rate debt by entering into interest rate swap agreements to convert a portion of our variable-rate debt to a fixed rate. On September 27, 2022, we entered into a fixed-rate interest rate swap agreement, which was subsequently amended on October 7, 2022, with banks that are parties to the 2022 Credit Agreement, to change the SOFR-based component of the interest rate. The 2022 Swap converts the SOFR portion to 4.277%. As of May 31, 2025, the 2022 swap resulted in a total fixed rate of 6.777%. The 2022 Swap had an initial notional amount of $550.0 million and a maturity date of September 30, 2025. The notional amount of the interest rate swap decreases by a pro-rata portion of any quarterly principal payments made on the Term Loan B, and the notional amount is $536.3 million as of February 28, 2025. The objective of the 2022 Swap is to eliminate the variability of cash flows in interest payments attributable to changes in benchmark one-month SOFR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month SOFR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable-rate debt. We designated the 2022 Swap as a cash flow hedge at inception. Cash settlements, in the form of cash payments or cash receipts, of the 2022 Swap are recognized in interest expense.

Current wording

On September 27, 2022, we entered into a fixed-rate interest rate swap agreement, which was subsequently amended on October 7, 2022. The 2022 Swap was terminated on June 30, 2025. Simultaneous to the termination of the 2022 Swap, we entered into a new fixed-rate interest rate swap agreement on June 30, 2025. The 2025 Swap converts the SOFR-based component of the interest rate to 3.759%. As of August 31, 2025, the 2025 Swap resulted in a total fixed rate of 5.509%. The 2025 Swap had an initial notional amount of $290.0 million and a maturity date of June 30, 2027. The objective of the 2025 Swap is to eliminate the variability of cash flows in interest payments attributable to changes in benchmark one-month SOFR interest rates. The hedged risk is the interest rate risk exposure to changes in interest payments, attributable to changes in benchmark one-month SOFR interest rates over the interest rate swap term. The changes in cash flows of the interest rate swap are expected to exactly offset changes in cash flows of the variable-rate debt. We designated the 2025 Swap as a cash flow hedge at inception. Cash settlements, in the form of cash payments or cash receipts, of the 2025 Swap are recognized in interest expense.

Previous wording

We are expanding our coatings capabilities through the construction of a new 25-acre aluminum coil coating facility in Washington, Missouri, which was became operational during the first quarter of fiscal 2026. The new greenfield facility is included in the AZZ Precoat Metals segment and is supported by a take-or-pay contract for approximately 75% of the output from the new plant. We expect to spend approximately $121.8 million in capital payments over the life of the project, of which $113.6 million was paid prior to fiscal 2026 and $3.2 million was paid during the three months ended May 31, 2025. The remaining balance of $5.0 million is on schedule to occur by the second quarter of fiscal 2026, for which we have capital commitments of $5.0 million. The remaining payments through fiscal 2026 are expected to be funded through cash flows from operations.

Current wording

We are expanding our coatings capabilities through the construction of a new 25-acre aluminum coil coating facility in Washington, Missouri, which became operational during the first quarter of fiscal 2026. The new greenfield facility is included in the AZZ Precoat Metals segment and is supported by a take-or-pay contract for approximately 75% of the output from the new plant. We expect to spend approximately $121.8 million in capital payments over the life of the project, of which $113.6 million was paid prior to fiscal 2026 and $4.1 million was paid during the six months ended August 31, 2025. The remaining balance of $4.1 million is on schedule to occur by the third quarter of fiscal 2026, for which we have capital commitments of $4.1 million. The remaining payments in fiscal 2026 are expected to be funded through cash flows from operations.

Previous wording

We account for our 40% interest in the AVAIL JV under the equity method of accounting and include our equity in earnings as part of the AZZ Infrastructure Solutions segment. We record our equity in earnings in the AVAIL JV on a one-month lag. In May 2025, Avail Infrastructure Solutions (“AVAIL”), in which we have an unconsolidated investment through the AVAIL JV, completed the sale of its electrical enclosures, switchgear, and bus systems businesses (the “Electrical Products Group”) to nVent Electric plc, for a purchase price of $975.0 million. Due to the one-month lag, we have not recognized equity in earnings from our proportionate share of the gain related to this sale. We expect to recognize our proportionate share of the gain through equity in earnings related to this event in the second quarter of fiscal 2026.

Current wording

We account for our 40% interest in the AVAIL JV under the equity method of accounting and include our equity in earnings as part of the AZZ Infrastructure Solutions segment. We record our equity in earnings in the AVAIL JV on a one-month lag. In May 2025, Avail Infrastructure Solutions ("AVAIL"), in which we have an unconsolidated investment through the AVAIL JV, completed the sale of its electrical enclosures, switchgear, and bus systems businesses (the "Electrical Products Group") to nVent Electric plc for a purchase price of $975.0 million.

Previous wording

During the three months ended May 31, 2025, we received a distribution of cash from the AVAIL JV of $273.2 million, which exceeded our investment in the AVAIL JV of $107.4 million. Since we are not liable for the obligations of the AVAIL JV nor otherwise committed to provide financial support after writing off our investment in the AVAIL JV, we recognized $165.8 million as a gain for the three months ended May 31, 2025. We recorded $173.5 million in equity in earnings, which consists of 1) $7.7 million of equity in earnings from the AVAIL JV's operations for the three months ended May 31, 2025, and 2) $165.8 million of a gain from distribution received in excess of our investment in the AVAIL JV. We primarily used the proceeds from the distribution to pay down our Term Loan B.

Current wording

During the three months ended May 31, 2025, we received a distribution of cash from the AVAIL JV of $273.2 million, which exceeded our investment in the AVAIL JV of $107.4 million. Since we are not liable for the obligations of the AVAIL JV nor otherwise committed to provide financial support, after writing off our investment in the AVAIL JV, we recognized $165.8 million as a gain for the three months ended May 31, 2025. Due to the timing of the receipt of cash and the recognition of equity in earnings, we suspended the recognition of equity in earnings of the AVAIL JV as of May 31, 2025, until our proportionate share of earnings exceeds the excess distribution previously recognized in earnings. During the three months ended August 31, 2025, we recognized the equity in earnings from AVAIL related to our proportionate share of the gain on the sale of the Electrical Products Group. The equity in earnings was in excess of the amount we recorded in the first quarter of fiscal 2026. Therefore, we resumed the recognition of equity in earnings of the AVAIL JV for the three months ended August 31, 2025.

Previous wording

During the three months ended May 31, 2025, we did not repurchase shares of common stock under the 2020 Share Authorization. As of May 31, 2025, there was $53.2 million remaining to repurchase shares under the 2020 Authorization. See "Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.”

Current wording

During the six months ended August 31, 2025, we did not repurchase shares of common stock under the 2020 Share Authorization. As of August 31, 2025, there was $53.2 million remaining to repurchase shares under the 2020 Authorization. See "Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds."

Previous wording

Management defines adjusted net income and adjusted earnings per share to exclude intangible asset amortization, restructuring charges, and additional stock compensation expense related to the adoption of our executive retiree long-term incentive program from the reported GAAP measure. Management defines Adjusted EBITDA as adjusted net income excluding depreciation, amortization, interest, provision for income taxes and Series A Preferred Stock dividends. Management believes Adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company's ability to incur and service debt, as well as its capacity for making capital expenditures in the future.

Current wording

Management defines adjusted net income and adjusted earnings per share to exclude: 1) intangible asset amortization, 2) restructuring charges, 3) retirement and other severance expenses, 4) redemption premium on Series A Preferred Stock, 5) additional stock compensation expense related to the adoption of our executive retiree long-term incentive program, and 6) certain adjustments related to the Company's unconsolidated joint venture from the reported GAAP measure. Management defines Adjusted EBITDA as adjusted net income excluding depreciation, amortization, interest, provision for income taxes and Series A Preferred Stock dividends. Management believes Adjusted EBITDA is used by investors to analyze operating performance and evaluate the Company's ability to incur and service debt, as well as its capacity for making capital expenditures in the future.

Previous wording

The following tables provide a reconciliation for the three months ended May 31, 2025 and 2024 between the non-GAAP Adjusted Earnings Measures to the most comparable measures, calculated in accordance with GAAP (dollars in thousands, except per share data):

Current wording

The following tables provide a reconciliation for the three and six months ended August 31, 2025 and 2024 between the non-GAAP Adjusted Earnings Measures to the most comparable measures, calculated in accordance with GAAP (in thousands, except per share data):