v3.26.1
Disaggregated Sales
 3 Months Ended
May 31, 2026
Revenues [Abstract]  
Disaggregated Sales
5. Disaggregated Sales
The following table presents disaggregated sales by customer industry (in thousands):
Three Months Ended May 31,
20262025
Sales:
Construction$258,002 $248,417 
Industrial 40,590 37,670 
Infrastructure55,970 56,443 
Transportation27,392 27,738 
HVAC & Appliances22,772 23,341 
Container20,776 7,046 
Other(1)
23,028 21,307 
Total sales$448,530 $421,962 
(1)
Other includes less significant markets, such as recreation, sales from recycling and other miscellaneous customer industries.
During the three months ended May 31, 2026, the Company revised its disaggregated sales categories to better reflect its current business operations. For the three months ended May 31, 2025, customer industry categories have been reclassified to conform to the current period presentation. This reclassification had no impact on total sales. See Note 7 for sales information by operating segment.
Contract Assets and Liabilities
The timing of revenue recognition, billings and cash collections results in accounts receivable, contract assets (unbilled receivables), and contract liabilities (customer advances and deposits) on the consolidated balance sheets. Our contract assets and contract liabilities are primarily related to the AZZ Precoat Metals segment. Customer billing can occur subsequent to revenue recognition, resulting in contract assets. In addition, we can receive advances from our customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period.
The increases in contract assets and contract liabilities during the three months ended May 31, 2026, were primarily due to normal timing differences between AZZ's performance and customer payments. Contract liabilities of $0.7 million, $0.6 million, and $0.5 million as of May 31, 2026, February 28, 2026, and February 28, 2025, respectively, are included in "Other accrued liabilities" in the consolidated balance sheets. The balance of contract assets was $117.1 million, $112.8 million, and $106.5 million as of May 31, 2026, February 28, 2026, and February 28, 2025, respectively.
Remaining Unsatisfied Performance Obligations
Remaining unsatisfied performance obligations ("RUPO") represent the total dollar value of work to be performed on contracts awarded and in progress. The amount of RUPO increases with new contracts or additions to existing contracts and decreases as revenue is recognized on existing contracts. Contracts are included in the amount of RUPO when an enforceable agreement has been reached. We have elected the practical expedient to exclude remaining performance obligations with a duration of one year or less. The Company has a long-term customer contract related to the aluminum coil coating facility in Washington, Missouri that includes RUPO through fiscal year 2031. The amounts associated with remaining performance obligations are subject to variability based on customer ordering patterns, production capacity, and contractual provisions. As of May 31, 2026, the amount of RUPO that we expect to recognize as revenue is not significant for any year through fiscal year 2031.