Restructuring and Other Expense

9 Months Ended

Feb. 28, 2013

Restructuring and Other Expense

NOTE D – Restructuring and Other Expense

In fiscal 2008, we initiated a Transformation Plan (the “Transformation Plan”) with the overall goal to improve our sustainable earnings potential, asset utilization and operational performance. The Transformation Plan focuses on cost reduction, margin expansion and organizational capability improvements and, in the process, seeks to drive excellence in three core competencies: sales; operations; and supply chain management. The Transformation Plan is comprehensive in scope and includes aggressive diagnostic and implementation phases.

To date, we have completed the transformation phases in each of the core facilities within our Steel Processing operating segment, including the facilities of our Mexican joint venture. We also substantially completed the transformation phases at our metal framing facilities prior to their contribution to ClarkDietrich. Transformation efforts within our Pressure Cylinders operating segment, which began during the first quarter of fiscal 2012, are ongoing. In addition, during the first quarter of fiscal 2013, we initiated the diagnostics phase of the Transformation Plan in our Engineered Cabs operating segment.

During the nine months ended February 28, 2013, the following actions were taken in connection with the Transformation Plan:

• In connection with the wind-down of our former Metal Framing operating segment:

- Approximately $962,000 of facility exit and other costs were incurred in connection with the closure of the retained facilities.

- The severance accrual was adjusted downward, resulting in a $264,000 credit to earnings.

- Certain assets of the retained facilities classified as held for sale were disposed of for cash proceeds of $5,637,000 resulting in a net gain of $1,886,000.

These items were recognized within the “joint venture transactions” financial statement caption in our consolidated statement of earnings to correspond with amounts previously recognized in connection with the formation of ClarkDietrich and the subsequent wind-down of our former Metal Framing operating segment.

• In connection with the closure of our commercial stairs business, we incurred net charges of approximately $1,530,000, consisting of $1,624,000 of facility exit and other costs and a $94,000 credit to severance expense.

• In connection with certain organizational changes impacting our former Global Group operating segment, we accrued approximately $104,000 of employee severance. For further information regarding these organizational changes, refer to “NOTE L – Segment Operations.”

• In connection with the sale of our Pressure Cylinders operations in Czech Republic, we recognized approximately $177,000 of facility exit and other costs.

A progression of the liabilities created as part of the Transformation Plan during the nine months ended February 28, 2013, combined with a reconciliation to the restructuring and other expense financial statement caption in our consolidated statement of earnings is summarized as follows:

(in thousands)	Beginning Balance		Expense/ (Income)			Payments			Adjustments			Ending Balance
Early retirement and severance	$	4,892	$	(254	)	$	(1,756	)	$	297		$	3,179
Facility exit and other costs		691		2,763			(1,589	)		(460	)		1,405
	$	5,583		2,509		$	(3,345	)	$	(163	)	$	4,584
Net gain on asset disposals				(1,886	)
Less: joint venture transactions				1,188
Restructuring and other expense			$	1,811

Approximately $1,790,000 of the total liability is expected to be paid in the fourth quarter of fiscal 2013. The remaining liability, which consists of lease termination costs and certain severance benefits, will be paid through September 2016.