Segment Operations

9 Months Ended

Feb. 28, 2023

Segment Reporting [Abstract]

Segment Operations

Note O – Segment Operations

Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, assesses operating segment performance and allocates resources based on adjusted EBIT. EBIT is calculated by adding interest expense and income tax expense to net earnings attributable to controlling interest. Adjusted EBIT excludes impairment and restructuring expense (income), but may also exclude other items, as described below, that management believes are not reflective of, and thus should not be included when evaluating the performance of our ongoing operations. Adjusted EBIT is a non-GAAP financial measure and is used by management to evaluate operating segment performance, engage in financial and operational planning and determine incentive compensation.

Impairment charges are excluded from adjusted EBIT because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, so their exclusion facilitates the comparison of historical, current and forecasted financial results.

Restructuring activities consist of established programs that are not part of our ongoing operations, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions).

The following table presents summarized financial information for our operating segments for the periods indicated.

	Three Months Ended February 28, 2023
(in thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	757,007		$	162,647		$	151,876	$	31,792		$	-		$	1,103,322
Impairment of long-lived assets		-			-			484		-			-			484
Restructuring and other expense, net		1			206			617		-			-			824
Separation costs		-			-			-		-			6,347			6,347
Miscellaneous income (expense), net		1,111			(21	)		130		(37	)		144			1,327
Equity income		(185	)		-			37,836		-			(725	)		36,926
Adjusted EBIT (1)		7,788			17,943			51,472		(1,440	)		(4,443	)		71,320

(1)Excludes the following:

•A pre-tax benefit of $1,050,000 within selling, general, and administrative expense (“SG&A”) to reverse the compensation expense accrued during the first six months of fiscal 2023 for the anticipated payout under the first annual earnout period ending December 31, 2023 associated with the Level5 acquisition (see the discussion of this acquisition in “Note P – Acquisitions”);

•Separation costs of $6,347,000 within Other related to direct and incremental costs incurred in connection with the anticipated Separation, including audit, advisory, and legal costs; and

•A loss of $300,000 for the settlement of final transaction costs within Other related to the sale of our 50% noncontrolling equity investment in ArtiFlex.

	Three Months Ended February 28, 2022
(in thousands)	Steel Processing			Consumer Products			Building Products			Sustainable Energy Solutions			Other			Consolidated
Net sales	$	1,052,562		$	161,692		$	132,944		$	31,037		$	-		$	1,378,235
Impairment of long-lived assets		3,076			-			-			-			-			3,076
Restructuring and other expense (income), net		114			-			(35	)		-			(583	)		(504	)
Miscellaneous income, net		(12	)		(39	)		(3	)		(38	)		485			393
Equity income		4,692			-			39,978			-			2,796			47,466
Adjusted EBIT (2)		7,116			26,674			49,570			(2,801	)		4,039			84,598

(2)Excludes the noncontrolling interest portion of the impairment of long-lived assets and restructuring expense within Steel Processing of $1,139,000.

	Nine Months Ended February 28, 2023
(in thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	2,637,834		$	505,145		$	443,870	$	100,679		$	-		$	3,687,528
Impairment of long-lived assets		312			-			484		-			-			796
Restructuring and other expense (income), net		(4,204	)		206			617		-			(1,177	)		(4,558	)
Separation costs		-			-			-		-			15,593			15,593
Miscellaneous income (expense), net		2,145			(102	)		428		19			(4,844	)		(2,354	)
Equity income		3,491			-			116,809		-			(14,805	)		105,495
Adjusted EBIT (3)(4)		25,450			52,350			145,431		(1,690	)		(2,588	)		218,953

(3)Excludes the following:

•A non-cash settlement charge of $4,774,000 in miscellaneous income (expense), net within Other related to the pension lift-out transaction associated with The Gerstenslager Company Bargaining Unit Employees’ Pension Plan and described further in “Note K – Changes in Equity;”

•A loss of $16,059,000 for the settlement of final transaction costs within Other related to the sale of our 50% noncontrolling equity investment in ArtiFlex effective August 3, 2022; and

•Separation costs of $15,593,000 within Other related to direct and incremental costs incurred in connection with the anticipated Separation, including audit, advisory, and legal costs.

(4)Excludes the noncontrolling interest portion of the impairment of long-lived assets and restructuring income within Steel Processing of $1,734,000.

	Nine Months Ended February 28, 2022
(in thousands)	Steel Processing			Consumer Products		Building Products			Sustainable Energy Solutions			Other			Consolidated
Net sales	$	2,813,214		$	450,268	$	368,813		$	89,619		$	-		$	3,721,914
Impairment of long-lived assets		3,076			-		-			-			-			3,076
Restructuring and other expense (income), net		(12,199	)		-		(35	)		(143	)		(2,405	)		(14,782	)
Miscellaneous income, net		35			169		141			(16	)		1,734			2,063
Equity income		22,864			-		132,865			-			4,871			160,600
Adjusted EBIT (5)		186,734			64,813		153,042			(4,561	)		5,517			405,545

(5)Excludes the noncontrolling interest portion of impairment of long-lived assets and restructuring income within Steel Processing of $4,888,000.

Total assets for each of our reportable operating segments at the dates indicated were as follows:

	February 28,		May 31,
(in thousands)	2023		2022
Total assets
Steel Processing	$	1,763,730	$	2,082,522
Consumer Products		636,896		577,026
Building Products		647,582		681,188
Sustainable Energy Solutions		121,689		114,084
Other		327,775		188,203
Total assets	$	3,497,672	$	3,643,023