AZZ INC
For the period ended May 31, 2026. Filed Jul 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2026 · Filed Jul 8, 2026
AZZ$125.71+2.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-30; filed 2026-01-07.
0000008947-26-000010
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-31; filed 2026-07-08.
0000008947-26-000162
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 113 current paragraphs.
59 unchanged; 26 reworded; 28 added; 32 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
•Sales prices in our AZZ Precoat Metals segment are expected to increase on average from past levels, resulting from passing through higher pricing on specified materials, although fluctuations in mix may impact the average selling price.
Current report
For the current quarter, we recorded sales of $448.5 million, compared to the prior year quarter of $422.0 million. Of total sales for the current quarter, 46.9% were generated from the AZZ Metal Coatings segment and 53.1% of sales were generated from the AZZ Precoat Metals segment. Net income for the current quarter was $52.0 million, compared to $170.9 million for the prior year quarter. Net income as a percentage of sales was 11.6% for the current quarter as compared to 40.5% for the prior year quarter. Diluted earnings per common share decreased by 69.6%, to $1.72 per share for the current quarter, compared to $5.66 per share for the prior year quarter. The decrease was primarily due to the recognition of equity in earnings for the excess distribution from the AVAIL JV in the prior year quarter.
Current report
Sales for the AZZ Precoat Metals segment increased $3.5 million, or 1.5% for the current quarter compared to the prior year quarter. The increase was due to an increase in the average price of coils coated, as well as revenue related to the ramp-up of the Washington, Missouri facility, partially offset by lower volume, mainly due to decreases in construction, infrastructure, HVAC and appliance end markets.
Current report
Operating income for the AZZ Precoat Metals segment increased $2.2 million, or 5.5% for the current quarter, compared to the prior year quarter. Theincrease was primarily due to increased sales as described above, partially offset by an increase in cost of sales of $1.4 million, primarily due to higher materials cost.
Current report
Equity in Earnings of Unconsolidated Subsidiary
Current report
Net cash provided by operating activities for the three months ended May 31, 2026 decreased by $277.6 million compared to the three months ended May 31, 2025 primarily due to:
Current report
•a decrease in cash distributions from the AVAIL JV of $273.2 million, following AVAIL's sale of its EPG business,
Current report
•a decrease in net income of $118.9 million, primarily due to a decrease in equity in earnings from the AVAIL JV,
Current report
•a decrease in cash flows from long-term assets and liabilities of $1.5 million, primarily due to decreases in long-term lease liabilities and other long-term liabilities,
Current report
•a decrease in non-cash expenses of $0.4 million, primarily due to restructuring expenses recognized in the prior year, as well as share-based compensation expense and bad debt expense, partially offset by a decrease in gain on sale of property, plant and equipment, an increase in depreciation expense, partly due to the new aluminum coil coating facility in Washington, Missouri and an increase in amortization of debt financing costs due to the write-off following the refinancing of the 2022 Credit Agreement,
Current report
•a decrease in cash from working capital of $64.3 million, related to decreases in income tax payable and accrued expenses, coupled with an increase in inventories, accounts receivable, and contract assets, partially offset by an increase in accounts payable, partially offset by
Current report
•a decrease in non-cash equity in earnings from the AVAIL JV of $173.0 million, primarily due to equity in earnings related to the AVAIL JV's sale of its EPG business in the prior year, and
Current report
•an increase in cash flows from deferred income taxes of $7.6 million, primarily due to a decrease in deferred taxes related to the AVAIL JV in the prior year.
Current report
Cash flows used in investing activities for the three months ended May 31, 2026 increased by $1.6 million compared to the prior three months ended May 31, 2025 primarily due to:
Current report
•a decrease of $3.7 million in proceeds from the sale of property, plant and equipment, partially offset by
Current report
•an increase in cash due to a decrease of $2.1 million in the purchase of property, plant and equipment, primarily due to costs in the prior year associated with the new aluminum coil coating facility in Washington, Missouri, which became operational during fiscal 2026.
Current report
Cash flows used in financing activities for the three months ended May 31, 2026 decreased by $277.3 million compared to the prior three months ended May 31, 2025 primarily due to:
Current report
•an increase in tax payments related to common stock issued under stock-based plans of $5.9 million,
Current report
•an increase in debt financing costs paid of $0.8 million, and
Current report
•an increase in dividend payments of $0.9 million, reflecting an increase in the quarterly cash dividend per share compared to the prior year quarter.
Current report
On May 7, 2026, we amended our 2022 Credit Agreement to change the following terms of the Revolving Credit Facility:
Current report
i. extended the maturity date of our Revolving Credit Facility from May 31, 2026 to May 7, 2029;
Current report
ii. added JP Morgan Chase Bank, N.A. and PNC Capital Markets LLC as additional lenders, and removed Citibank N.A. and Barclays Bank PLC as lenders;
Current report
iii. reduced the interest rate tiers from a range of SOFR plus 1.75% to 2.75% to a range of SOFR plus 1.25% to 2.25%; and
Current report
iv. reduced the leverage-based commitment fee tiers from a range of 0.20% to 0.30% to a range of 0.15% to 0.25%.
Current report
In connection with the amendment, approximately 37.50% of the aggregate principal amount was reallocated to the new lenders. We evaluated the amendment under the guidance in ASC 470-50, Debt—Modifications and Extinguishments and concluded that the amendment represented a modification at the instrument level, as the quantitative 10% cash flow test was not met. However, the lender reallocation resulted in a partial extinguishment at the lender level. As a result, for the three months ended May 31, 2026, we recognized a write-off of approximately $0.6 million of unamortized debt financing costs, which is included in "Interest expense, net" on our consolidated statement of operations and in "Amortization of debt financing costs" on our consolidated statement of cash flows.
Current report
As of May 31, 2026, we had outstanding letters of credit in the amount of $10.6 million. These standby letters of credit are primarily issued to support insurance deductibles and other collateral requirements.
Current report
We classify cash flows from distributions using the cumulative earnings method. Cash received is classified as return on investment in operating cash flows to the extent that cumulative earnings exceed cumulative distributions, less distributions received in prior periods that were deemed returns of investment. We did not receive cash distributions from the AVAIL JV during the three months ended May 31, 2026. During the three months ended May 31, 2025, we received cash distributions from the AVAIL JV of $273.2 million.
Removed paragraphs (32)
Previous report
For the three months ended November 30, 2025 (the "current quarter"), consolidated sales increased $22.1 million, or 5.5%, compared to the three months ended November 30, 2024 (the "prior year quarter").
Previous report
Sales for the AZZ Precoat Metals segment decreased $4.3 million, or 1.8% 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 report
Operating income for the AZZ Precoat Metals segment decreased $1.2 million, or 3.2% 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 $2.4 million, primarily due to a decrease in material 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 report
Corporate selling, general and administrative expenses decreased $6.4 million, or 25.8%, for the current quarter, compared to the prior year quarter. The decrease was primarily due to decreases in salaries and wages, employee benefits and stock-based compensation, primarily due to retirement and other severance costs recognized in the prior year.
Previous report
Equity in Earnings of Unconsolidated Entities
Previous report
NINE MONTHS ENDED NOVEMBER 30, 2025 COMPARED TO THE NINE MONTHS ENDED NOVEMBER 30, 2024
Previous report
Segment Sales and Operating Income
Previous report
See notes below.
Previous report
Sales
Previous report
For the current nine-month period, consolidated sales increased $39.1 million, or 3.2%, compared to the nine months ended November 30, 2024 (the "prior year nine-month period").
Previous report
Sales for the AZZ Metal Coatings segment increased $55.4 million, or 10.7%, for the current nine-month period, compared to the prior year nine-month period. Theincrease in sales was primarily due to an increase of $63.7 million resulting from a higher volume of steel processed during the period, partially offset by a decrease of $9.8 million in selling price, due to product mix. Other sales increased $1.5 million.
Previous report
Sales for the AZZ Precoat Metals segment decreased $16.3 million, or 2.3% for the current nine-month period, primarily due to a lower volume of coil coated, partially offset by an increase in selling price due to vendor price increases that were passed through to the customer.
Previous report
Operating Income
Previous report
For the current nine-month period, consolidated operating income increased $11.6 million, or 5.9%, to $207.5 million, compared to the prior year nine-month period.
Previous report
Operating income for the AZZ Metal Coatings segment increased $12.5 million, or 8.8% for the current nine-month period, compared to the prior year nine-month period. Theincrease was due to improved sales as described above, and lower selling, general and administrative expenses, partially offset by higher cost of sales. Cost of sales increased $42.7 million, prim arily due to an $8.0 million increase in labor costs, increased overhead costs of $22.8 million, and increased zinc costs of $11.9 million. Selling, general and administrative expense decreased $0.2 million.
Previous report
Operating income for the AZZ Precoat Metals segment decreased $7.9 million, or 6.6%. The decrease was primarily due to the decrease in sales as described above. In addition, cost of sales decreased by $7.0 million, prima rily due to a decrease in material 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 report
Corporate Expenses
Previous report
Interest Expense
Previous report
Interest expense for the current nine-month period decreased $19.5 million, to $44.4 million, compared to $63.9 million for the prior year nine-month period. The decrease in interest expense is primarily attributable to a decrease in the weighted average debt outstanding of $198.4 million anda decrease in the weighted average interest rate of 1.61% in the current nine-month period compared to the prior year nine-month period, partially offset by lower capitalized interest in the current nine-month period associated with the construction of the new plant in Washington, Missouri.
Previous report
Equity in Earnings of Unconsolidated Entities
Previous report
Equity in earnings of unconsolidated subsidiaries for the current nine-month period increased $219.0 million, to $231.4 million, compared to $12.5 million in the prior year nine-month period. The increase is due to a gain from the sale of the Electrical Products Group, partially offset by an impairment loss recognized on the AVAIL JV in the second quarter of fiscal 2026 and lower earnings following the sale of the electrical business. See "Item I. Financial Statements—Note 8" for more information about the AVAIL JV.
Previous report
Income Taxes
Previous report
The provision for income taxes reflects an effective tax rate of 23.9% for the nine months ended November 30, 2025 compared to 24.8% for the prior year comparable period. The decrease in the effective tax rate is primarily attributable to higher R&D tax credits related to the construction of the new aluminum coil coating facility in Washington, Missouri, which became operational during the first quarter of fiscal 2026.
Previous report
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("the Act") that includes several U.S. corporate tax provisions, including the restoration of 100% bonus depreciation on qualified property and the current deductibility of domestic research and experimental expenditures. The provisions of the Act did not have a material impact to our income tax expense or effective tax rate. We expect the provisions of the Act to result in a reduction in our fiscal 2026 cash tax payments.
Previous report
Net cash provided by operating activities for the prior year nine-month period was $185.6 million, driven primarily by net income of $108.6 million, adjusted to exclude non-cash charges, net of non-cash income of $69.1 million, an increase in cash resulting from a reduction in working capital of $2.9 million, partially offset by a decrease in cash resulting from changes in other long-term assets and liabilities, including deferred taxes, of $1.8 million and a cash distribution received on the investment in the AVAIL JV of $6.8 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 and accounts receivable; partially offset by increases in other receivables, prepaid expenses and contract assets due to higher sales. Net cash provided by operating activities was used to fund $85.9 million of capital expenditures, make net payments on long-term debt and finance leases liabilities of $82.2 million, make dividend payments of $18.0 million and make payments for taxes related to net share settlement of equity awards of $5.0 million. We also completed a secondary public offering of 4.6 million shares of our common stock, which provided cash, net of offering costs, of $310.2 million, which was used to redeem our 240,000 shares of Series A Preferred Stock for $308.9 million.
Previous report
On August 5, 2025, we repriced the Term Loan B. The repricing reduced the margin from SOFR plus 2.50% to SOFR plus 1.75%.
Previous report
As of November 30, 2025, we had total outstanding letters of credit in the amount of $13.7 million. These letters of credit are issued for a number of reasons but are most commonly issued in lieu of customer retention withholding payments covering warranty, performance periods and insurance collateral.
Previous report
Capital Commitments—Greenfield Aluminum Coil Coating Facility
Previous report
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 related to the project, of which $113.6 million was paid prior to fiscal 2026 and approximately $5.9 million was paid during the nine months ended November 30, 2025. The remaining balance of $2.3 million is expected to be paid in the fourth quarter of fiscal 2026.
Previous report
During the first quarter of fiscal 2026, 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 reducing our investment in the AVAIL JV to zero, we recognized $165.8 million as a gain during the first quarter of fiscal 2026. 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 exceeded the excess distribution previously recognized in earnings. During the second quarter of fiscal 2026, 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 in the second quarter of fiscal 2026.
Previous report
Following the recognition of our proportionate share of the gain on the sale of the Electrical Products Group and equity in earnings during the second quarter of fiscal 2026, management identified events and circumstances indicating that the fair value of the Company's investment in the AVAIL JV may have fallen below its carrying value on an other-than-temporary basis. These indicators arose principally from the significant business divestiture by AVAIL and a corresponding reduction in AVAIL's projected future earnings. In response, management performed a recoverability analysis of our investment in the AVAIL JV. Management estimated the fair value of our 40% interest in the AVAIL JV and concluded that the decline in fair value was other-than-temporary. Accordingly, we recorded an impairment charge of $45.9 million during the second quarter of fiscal 2026 to write down the carrying value of our investment in the AVAIL JV. After recognizing the impairment loss, management believes the carrying value of the investment in the AVAIL JV is recoverable based on AVAIL's current financial position. We will continue to monitor the AVAIL JV for any indicators of impairment, and if further declines in the fair value occur and are deemed other-than-temporary, additional write-downs will be recorded. For the nine months ended November 30,
Previous report
2025, we recorded $231.4 million in equity in earnings, which consists of 1) $2.8 million of equity in earnings from the AVAIL JV's operations for the nine months ended November 30, 2025, 2) $274.5 million of a net gain from the sale of the Electrical Products Group recognized during the second quarter of fiscal 2026, offset by 3) an impairment loss of $45.9 million on the AVAIL JV recognized during the second quarter of fiscal 2026.
Reworded paragraphs (26)
Previous wording
Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as "may," "could," "should," "expects," "plans," "will," "might," "would," "projects," "currently," "intends," "outlook," "forecasts," "targets," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial, and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date they are made and are subject to risks that could cause them to differ materially from actual results. Certain factors could affect the outcome of the matters described herein. This Quarterly Report may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our manufactured solutions, including demand by the construction markets, the industrial markets, and the metal coatings markets. We could also experience additional increases, including increases due to inflation, in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process, paint used in our coil coating process; customer requested delays of our manufactured solutions; delays in additional acquisition opportunities; an increase in our debt leverage and/or interest rates on our debt, of which a significant portion is tied to variable interest rates; availability of experienced management and employees to implement AZZ’s growth strategy; a downturn in market conditions in any industry relating to the manufactured solutions that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in the United States and other foreign markets in which we operate; tariffs, acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business, including in Part I, Item 1A. Risk Factors, in AZZ's Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov.
Current wording
Certain statements herein about our expectations of future events or results constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as "may," "could," "should," "expects," "plans," "will," "might," "would," "projects," "currently," "intends," "outlook," "forecasts," "targets," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Such forward-looking statements are based on currently available competitive, financial, and economic data and management’s views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements. Forward-looking statements speak only as of the date they are made and are subject to risks that could cause them to differ materially from actual results. Certain factors could affect the outcome of the matters described herein. This Quarterly Report may contain forward-looking statements that involve risks and uncertainties including, but not limited to, changes in customer demand for our manufactured solutions, including demand by the construction; infrastructure; transportation; HVAC & appliance; container; and the metal coatings end markets. We could also experience additional increases, including increases due to inflation, in labor costs, components and raw materials including zinc and natural gas, which are used in our hot-dip galvanizing process andpaint used in our coil coating process; supply chain vendor delays; delays in additional acquisition opportunities; an increase in our debt leverage and/or interest rates on our debt, of which a significant portion is tied to variable interest rates; availability of experienced management and employees to implement AZZ's growth strategy; a downturn in market conditions in any industry relating to the manufactured solutions that we provide; economic volatility, including a prolonged economic downturn or macroeconomic conditions such as inflation or changes in the political stability in the United States or Canada; tariffs, acts of war or terrorism inside the United States or abroad; and other changes in economic and financial conditions. AZZ has provided additional information regarding risks associated with the business, including in Part I, Item 1A. Risk Factors, in AZZ's Annual Report on Form 10-K for the fiscal year ended February 28, 2026, and other filings with the SEC, available for viewing on AZZ's website at www.azz.com and on the SEC's website at www.sec.gov.
Previous wording
Our results for the nine months ended November 30, 2025 (the "current nine-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 utilities, construction and consumer industries.
Current wording
Our results for the three months ended May 31, 2026 were impacted primarily by the growth in demand for our manufactured solutions in the construction, industrial and container end markets.
Previous wording
The equity in earnings from the AVAIL JV was the primary contributor to net income of $301.3 million for the current nine-month period. Our operating results for the current nine-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."
Current wording
The demand for our manufacturing solutions was the primary contributor to net income of $52.0 million for the current three-month period. Our operating results for the current three-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 $452.9 million of cash for the current nine-month period. The components of our liquidity and descriptions of our cash flows, capital investments, and other utilities, construction and matters impacting our liquidity and capital resources can be found below under "Liquidity and Capital Resources."
Current wording
Our operations generated $37.1 million of cash for the current three-month period. The components of our liquidity and descriptions of our cash flows, capital investments, and other utilities, construction and 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 fourth 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 second quarter of fiscal 2027.
Previous wording
•Sales prices in our AZZ Metal Coatings and AZZ Precoat Metals segment are expected to remain consistent with current levels. Fluctuations in product mix, along with competitive market pressures, may impact selling price.
Current wording
•Sales prices in our AZZ Metal Coatings segment are expected to modestly increase from current levels, supported by continued increases in input costs. Fluctuations in product mix, along with competitive market pressures, may impact selling price.
Previous wording
Sales for the AZZ Metal Coatings segment increased $26.4 million, or 15.7%, for the current quarter, compared to the prior year quarter. The increase was primarily due to $30.0 million resulting from a higher volume of steel processed and an increase in other sales of $2.1 million, partially offset by a decrease in selling price of $5.7 million due to product mix.
Current wording
Sales for the AZZ Metal Coatings segment increased $23.1 million, or 12.3%, for the current quarter compared to the prior year quarter. The increase was primarily due to $22.2 million resulting from a higher volume of steel processed, mainly due to increases in the construction and industrial end markets, and an increase of $1.5 million in other sales, partially offset by a decrease in the average selling price of $0.6 million, due to product mix.
Previous wording
For the current quarter, consolidated operating income was $69.5 million, an increase of $10.9 million, or 18.7%, compared to the prior year quarter.
Current wording
For the current quarter, consolidated operating income was $77.0 million, an increase of $7.5 million, or 10.8%, compared to the prior year quarter.
Previous wording
Operating income for the AZZ Metal Coatings segment increased $5.7 million, or 12.3%, 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 $20.3 million was primarily due to a $6.6 million increase in variable costs, a $5.5 million increase in zinc cost, and a $3.9 million increase in labor costs and an increase in other overhead costs of $4.3 million. Selling, general and administrative expense increased $0.3 million.
Current wording
Operating income for the AZZ Metal Coatings segment increased $5.8 million, or 11.5%, 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 $17.1 million was primarily due to a $6.2 million increase in zinc cost, a $3.6 million increase in labor costs and an increase in other overhead costs of $7.3 million. Selling, general and administrative expense increased $0.2 million.
Previous wording
Corporate selling, general and administrative expenses decreased $7.0 million, or 10.7%, for the current nine-month period, compared to the prior year nine-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 nine-month period, primarily due to the adoption of the Executive Retiree LTI Program and the acceleration of expense for the related stock awards.
Current wording
Corporate selling, general and administrative expenses increased $0.6 million, or 2.9%, for the current quarter, compared to the prior year quarter. The increase was primarily due to increased professional fees and personnel costs, partially offset by a decrease in stock-based compensation, primarily due to the adoption of the Executive Retiree LTI Program and the acceleration of expense for the related stock awards in the prior year.
Previous wording
Interest expense for the current quarter decreased $7.0 million, to $12.2 million, compared to $19.2 million for the prior year quarter. The decrease in interest expense was primarily attributable to a decrease in the weighted average debt outstanding of $339.8 million and a decrease in the weighted average interest rate of 1.76% 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 $7.3 million, to $11.3 million, compared to $18.6 million for the prior year quarter. The decrease in interest expense was primarily attributable to a decrease of $364.2 million in the weighted average debt outstanding and a decrease in the weighted average interest rate of 1.54% in the current quarter, compared to the prior year quarter. The decrease in interest expense is partially offset by lower capitalized interest, primarily 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 decreased $8.6 million to a loss of $1.4 million, compared to income of $7.2 million in the prior year quarter. The decrease was due to AVAIL's lower income for the quarter following the sale of the Electrical Products Group business. See "Item I. Financial Statements—Note 8" for more information about the AVAIL JV.
Current wording
Equity in earnings of unconsolidated subsidiary for the current quarter decreased $173.0 million to $0.5 million, compared to $173.5 million in the prior year quarter. The decrease was due to recognition in the prior year quarter of a gain for a distribution in excess of our investment balance of $165.8 million. See "Item I. Financial Statements—Note 8" for more information about the AVAIL JV.
Previous wording
The provision for income taxes reflects an effective tax rate of 26.1% for the current quarter, compared to 26.5% for the prior year quarter. The decrease in the effective tax rate is driven by higher tax deductions for stock compensation, partially offset by an increase in non-deductible research expenses.
Current wording
The provision for income taxes reflects an effective tax rate of 21.2% for the three months ended May 31, 2026, compared to 24.3% for the three months ended May 31, 2025. The decrease in the effective tax rate is driven by higher tax deductions for stock compensation in the current year, coupled with higher tax expense in the prior year related to equity in earnings from the AVAIL JV.
Previous wording
As of November 30, 2025, our total liquidity of $337.1 million consisted of available capacity on our Revolving Credit Facility of $336.4 million and cash and cash equivalents of $0.6 million.
Current wording
As of May 31, 2026, our total liquidity of $360.5 million consisted of available capacity under our Revolving Credit Facility of $359.4 million and cash and cash equivalents of $1.1 million.
Previous wording
Net cash provided by operating activities for the current nine-month period was $452.9 million, driven primarily by net income of $301.3 million, adjusted to exclude non-cash charges, net of non-cash income of $141.6 million, a cash distribution received on the investment in the AVAIL JV of $273.2 million, an increase in cash resulting from a decrease in working capital of $0.5 million, and an increase in cash resulting from changes in other long-term assets and liabilities, including deferred taxes, of $19.4 million. The decrease in working capital is due primarily to increases in accounts payable, income taxes payable, and decreased inventories, offset by increases in accounts receivable, contract assets, prepaid expenses and a decrease in accrued liabilities. Net cash provided by operating activities was used to fund $58.7 million of capital expenditures, fund an acquisition of $30.1 million, make net payments on long-term debt and finance leases of $327.1 million, repurchase $20.0 million of common stock, make dividend payments of $17.1 million and make payments for taxes related to net share settlement of equity awards of $5.0 million. Other increases in cash included proceeds from sales of property, plant, and equipment of $3.9 million.
Current wording
•a decrease in net payments on long-term debt and finance leases of $284.9 million, partially offset by
Previous wording
We have a credit agreement with a syndicate of financial institutions as lenders that was entered into on May 13, 2022 and was subsequently amended on August 17, 2023, December 20, 2023, March 20, 2024, September 24, 2024, February 27, 2025, and August 5, 2025 (collectively referred to herein as the "2022 Credit Agreement").
Current wording
We have a credit agreement with a syndicate of financial institutions as lenders, entered into on May 13, 2022 and amended from time to time (collectively referred to herein as the "2022 Credit Agreement").
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 November 30, 2025, the outstanding balance of the Term Loan B was $374.9 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 May 31, 2026, the outstanding balance of the Term Loan B was $335.0 million;
Previous 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 November 30, 2025, the interest rate was SOFR plus 1.75%;
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 1.25% and 2.25%; as of May 31, 2026, the interest rate was SOFR plus 1.25%;
Previous wording
Accordingly, the receivables transferred to the SPE will remain on our consolidated balance sheet within trade accounts receivable and contract assets, and the Receivables Securitization Facility is included in "Long-term debt, net." The Receivables Securitization Facility has a limit of $150.0 million and is due July 10, 2028. As of November 30, 2025, the total amount of receivables pledged under the facility was $249.9 million, consisting of $141.1 million in trade accounts receivable and $108.8 million in contract assets, with outstanding borrowings of $150.0 million. The interest rate on the Receivables Securitization Facility is one-month SOFR plus 0.95%.
Current wording
Accordingly, the receivables transferred to the SPE will remain on our consolidated balance sheet within trade accounts receivable and contract assets, and the Receivables Securitization Facility is included in "Long-term debt, net." The Receivables Securitization Facility has a limit of $150.0 million and is due July 10, 2028. As of May 31, 2026, the total amount of receivables pledged under the facility was $268.1 million, consisting of $153.8 million in trade accounts receivable and $114.3 million in contract assets, with outstanding borrowings of $150.0 million. The interest rate on the Receivables Securitization Facility is one-month SOFR plus 0.95%.
Previous wording
The weighted average interest rate for our outstanding debt, including the Revolving Credit Facility, the Term Loan B, and Receivables Securitization Facility was 6.16% and 7.77% for the nine months ended November 30, 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 November 30, 2025, the commitment fee rate was 0.20%.
Current wording
The weighted-average interest rate for our outstanding debt, including the Revolving Credit Facility, the Term Loan B, and the Receivables Securitization Facility was 5.24% and 5.94% as of May 31, 2026 and February 28, 2026, respectively. We are also obligated to pay a leverage-based commitment fee with various tiers between 0.15% and 0.25% per year for unused amounts under the Revolving Credit Facility. As of May 31, 2026, the commitment fee rate was 0.175%.
Previous wording
As of November 30, 2025, we had $574.9 million of debt outstanding, with varying maturities through fiscal 2030. We had approximately $336.4 million of additional credit available as of November 30, 2025.
Current wording
As of May 31, 2026, we had $515.0 million of debt outstanding, with varying maturities through fiscal 2030. We had approximately $359.4 million of additional credit available as of May 31, 2026.
Previous wording
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 November 30, 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.
Current 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 June 30, 2025, we entered into a new fixed-rate interest rate swap agreement (the “2025 Swap”). The 2025 Swap converts the SOFR-based component of the interest rate to 3.759%. As of May 31, 2026, the 2025 Swap resulted in a total fixed rate of 5.509%. The 2025 Swap has a 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 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.
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.
Previous wording
During the nine months ended November 30, 2025, we repurchased 201,416 shares of common stock in the amount of $20.0 million at an average purchase price of $99.28 under the 2020 Share Authorization. As of November 30, 2025, there was $33.2 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 three months ended May 31, 2026, we did not repurchase any shares of common stock under the 2020 Share Authorization or the 2026 Share Repurchase Program. As of May 31, 2026, there was $33.2 million and $100.0 million remaining to repurchase shares under the 2020 Authorization and the 2026 Share Repurchase Program, respectively. See "Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds."
Previous wording
In calculating adjusted net income and adjusted earnings per share, management excludes: 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.
Current wording
In calculating adjusted net income and adjusted earnings per share, management excludes the following items from the reported GAAP measure: 1) intangible asset amortization, 2) restructuring charges, 3) certain legal settlements and accruals, 4) retirement and other severance expenses, 5) redemption premium on Series A Preferred Stock, 6) additional stock compensation expense related to the adoption of our executive retiree long-term incentive program, 7) certain adjustments related to the Company's unconsolidated joint venture, and 8) the write-off of debt financing costs. Management defines Adjusted EBITDA as adjusted net income excluding depreciation, amortization, interest and provision for income taxes. 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 and nine months ended November 30, 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):
Current wording
The following tables provide a reconciliation for the three months ended May 31, 2026 and 2025 between the non-GAAP Adjusted Earnings Measures to the most comparable measures, calculated in accordance with GAAP (in thousands, except per share data):
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following tables contain operating segment data by segment, for the Company's corporate operations and on a consolidated basis (in thousands):
Previous report — wording carried elsewhere
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. The 2022 Swap was terminated on June 30, 2025.