Restructuring and Other Expense

9 Months Ended

Feb. 28, 2015

Restructuring and Other Expense

NOTE E – 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. Most of the work is now being done by our internal teams. These internal teams are now an integral part of our business. The Transformation teams will continue to monitor performance metrics and new processes instituted across our transformed operations and drive continuous improvements in all areas of our operations. The expenses related to these teams have been included in selling, general and administrative (“SG&A”) expense since the beginning of fiscal 2013.

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, Serviacero. We also substantially completed the transformation phases at our metal framing facilities prior to their contribution to ClarkDietrich. Transformation efforts within our Pressure Cylinders and Engineered Cabs operating segments, which began during the first quarter of fiscal 2012 and the first quarter of fiscal 2013, respectively, are ongoing.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense financial statement caption in our consolidated statement of earnings for the nine months ended February 28, 2015 is summarized as follows:

(in thousands)	Beginning Balance		Expense			Payments			Adjustments		Ending Balance
Early retirement and severance	$	6,495	$	2,169		$	(5,313	)	$	46	$	3,397
Facility exit and other costs		534		909			(1,203	)		79		319
	$	7,029		3,078		$	(6,516	)	$	125	$	3,716
Gain on asset disposal				(313	)
Less: joint venture transactions				(274	)
Restructuring and other expense			$	2,491

Severance expense in the current year consisted primarily of $2,291,000 recognized in connection with the recently announced workforce reductions in our oil and gas equipment business within Pressure Cylinders.

Approximately $3,552,000 of the total liability as of February 28, 2015 is expected to be paid in the next twelve months. The remaining liability will be paid through September 2016.