Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. At May 31, 2023, we held investments in the following affiliated companies: ClarkDietrich (25%), Serviacero Worthington (50%), WAVE (50%), and Workhorse (20%).

On August 3, 2022, we sold our 50% noncontrolling equity interest in ArtiFlex to the unaffiliated joint venture member for net proceeds of approximately $35,795, after adjustments for closing debt and final net working capital, resulting in a pre-tax loss of $16,059 within equity income during fiscal 2023. In a separate but concurrent transaction with the joint venture member, we sold real property with a net book value of $6,300. This real property was owned by us and leased to ArtiFlex prior to closing of the transaction.

We received distributions from unconsolidated affiliates totaling $240,857, $100,058, and $91,007 in fiscal 2023, fiscal 2022 and fiscal 2021, respectively. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in a negative asset balance of $117,297 and $81,149 at May 31, 2023 and 2022, respectively. In accordance with the applicable accounting guidance, we reclassified the negative balances to other liabilities within our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any balance classified as a liability as income immediately.

The following table presents combined information regarding the financial position of our unconsolidated affiliates accounted for using the equity method as of May 31:


(In thousands)	2023		2022
Cash and cash equivalents	$	49,185	$	68,563
Other current assets		899,913		1,148,029
Noncurrent assets		394,468		369,608
Total assets (1)	$	1,343,566	$	1,586,200
Current liabilities	$	247,796	$	345,097
Short-term borrowings		-		5,943
Current maturities of long-term debt		36,936		33,054
Long-term debt		349,215		306,814
Other noncurrent liabilities		144,649		76,437
Equity		564,970		818,855
Total liabilities and equity (1)	$	1,343,566	$	1,586,200

(1)

Effective January 1, 2022, Workhorse adopted Topic 842 using the alternative transition method. As a result of the adoption, Workhorse recognized operating lease ROU assets of $47,082 and lease liabilities of $47,082. The adoption resulted in a cumulative-effect adjustment of $18,000 related to a prior sale lease-back transaction recognized under Accounting Standards Codification Topic 840. Our portion of this cumulative effect adjustment was $3,600 and is recognized in retained earnings on our consolidated balance sheet as of May 31, 2023. The impact of adopting ASC 842 did not have a significant impact on the financial statements of our other unconsolidated affiliates.

The following tables presents summarized financial information for our unconsolidated affiliates as of, and for the fiscal years ended May 31.


(In thousands)	2023		2022		2021
Net sales
WAVE	$	447,369	$	452,368	$	371,814
ClarkDietrich		1,451,665		1,695,808		893,371
Serviacero Worthington		564,569		620,312		311,543
ArtiFlex (1)		52,641		187,089		144,834
Workhorse		364,396		313,265		196,915
Total net sales	$	2,880,640	$	3,268,842	$	1,918,477


(In thousands)	2023		2022		2021
Gross margin
WAVE	$	242,257	$	238,523	$	215,692
ClarkDietrich		403,569		431,070		158,074
Serviacero Worthington		21,503		96,918		51,253
ArtiFlex (1)		8,589		30,633		20,596
Workhorse		17,628		11,455		(7,057	)
Total gross margin	$	693,546	$	808,599	$	438,558


(In thousands)	2023		2022			2021
Operating income (loss)
WAVE	$	184,882	$	183,545		$	165,381
ClarkDietrich		318,914		351,583			94,888
Serviacero Worthington		10,387		87,342			43,075
ArtiFlex (1)		4,911		15,778			9,628
Workhorse		7,507		(2,024	)		(2,372	)
Total operating income	$	526,601	$	636,224		$	310,600


(In thousands)	2023		2022		2021
Depreciation and amortization
WAVE	$	4,679	$	4,554	$	4,073
ClarkDietrich		13,717		10,946		11,917
Serviacero Worthington		4,030		4,300		4,305
ArtiFlex (1)		1,444		5,708		5,728
Workhorse		10,386		6,586		8,965
Total depreciation and amortization	$	34,256	$	32,094	$	34,988


(In thousands)	2023		2022		2021
Interest expense
WAVE	$	13,024	$	8,386	$	8,909
ClarkDietrich		524		308		101
Serviacero Worthington		329		180		42
ArtiFlex (1)		134		340		528
Workhorse		2,507		1,228		2,704
Total interest expense	$	16,518	$	10,442	$	12,284


(In thousands)	2023			2022		2021
Income tax expense (benefit)
WAVE	$	222		$	158	$	200
ClarkDietrich		1,924			-		-
Serviacero Worthington		(2,996	)		25,079		11,341
ArtiFlex (1)		59			258		149
Workhorse		1,802			1,244		270
Total income tax expense	$	1,011		$	26,739	$	11,960


(In thousands)	2023		2022			2021
Net earnings (loss)
WAVE	$	171,687	$	175,154		$	156,869
ClarkDietrich		321,977		356,288			98,313
Serviacero Worthington		15,451		59,565			31,865
ArtiFlex (1)		4,717		15,180			8,950
Workhorse		2,673		(1,170	)		(2,811	)
Total net earnings	$	516,505	$	605,017		$	293,186

(1)

On August 3, 2022, we sold our 50% noncontrolling equity interest in ArtiFlex.

At May 31, 2023 and 2022, $109,703 and $132,283, respectively, of our consolidated retained earnings represented undistributed earnings of our unconsolidated affiliates, net of tax.