Note D – Restructuring and Other Expense (Income)

We consider restructuring activities to be programs whereby we fundamentally change our operations such as closing and consolidating manufacturing facilities, moving manufacturing of a product to another location, and employee severance (including rationalizing headcount or other significant changes in personnel).

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense (income) financial statement caption in our consolidated statement of earnings for fiscal 2015, is summarized below:


(in thousands)	Beginning Balance		Expense			Payments			Adjustments		Ending Balance
Early retirement and severance	$	6,495	$	3,323		$	(7,694	)	$	46	$	2,170
Facility exit and other costs		534		1,266			(1,568	)		139		371

	$	7,029		4,589		$	(9,262	)	$	185	$	2,541

Net loss on sale of assets				2,338
Less: joint venture transactions				(413	)

Restructuring and other expense			$	6,514

During fiscal 2015, the following actions were taken related to the Company’s restructuring activities:

•

In connection with the wind-down of our former Metal Framing operating segment, we recognized $413,000 of facility exit and other costs. These costs 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.

•

The Company completed the sale of its aluminum high-pressure cylinder business in New Albany, Mississippi, for cash proceeds of $8,415,000. A loss of $2,670,000 was recognized as a result of the transaction, which included $1,891,000 of allocated goodwill. The Company also recognized an accrual of $664,000 for expected severance costs associated with the transaction.

•

The Company completed the sale of the ACT business within Engineered Cabs for cash proceeds of $2,622,000, resulting in a gain of $332,000.

•

On March 24, 2015, the Company announced a workforce reduction in several oil and gas equipment locations due to slowing demand. The Company recognized an accrual of $2,221,000 for expected severance costs covering those affected by the workforce reductions.

•

In connection with the wind down of the Military Construction business, the Company recognized an accrual of $366,000 for expected severance costs

The total liability as of May 31, 2015 is expected to be paid in the next twelve months.


(in thousands)	Beginning Balance		Expense			Payments			Adjustments			Ending Balance
Early retirement and severance	$	5,029	$	6,236		$	(4,703	)	$	(67	)	$	6,495
Facility exit and other costs		1,200		2,477			(3,021	)		(122	)		534

	$	6,229		8,713		$	(7,724	)	$	(189	)	$	7,029

Net gain on sale of assets				(10,589	)
Less: joint venture transactions				(1,036	)

Restructuring and other income			$	(2,912	)

During fiscal 2014, the following actions were taken related to the Company’s restructuring activities:

•

In connection with the wind-down of our former Metal Framing operating segment, we recognized $924,000 of facility exit and other costs and a loss of $112,000 related to the sale of certain retained assets. These costs 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 facility exit charges of $652,000.

•

In connection with the consolidation of the BernzOmatic hand torch manufacturing operation in Medina, New York into the existing Pressure Cylinders’ facility in Chilton, Wisconsin, we recognized an additional accrual of $578,000 for expected employee severance costs and $377,000 of facility exit costs. During the fourth quarter of fiscal 2013, we had recognized a $2,488,000 accrual for expected severance costs related to this matter.

•

On June 30, 2013, the Company completed the sale of Integrated Terminals, its warehouse facility in Detroit, Michigan, for cash proceeds of $7,457,000, resulting in a gain of $4,762,000.

•

On November 12, 2013, the Company entered into an agreement to sell the operating assets related to its steel high pressure and acetylene cylinders business in North America, resulting in a gain of $5,939,000. In connection with this transaction, the Company recognized a $3,714,000 accrual for expected severance costs and incurred facility exit charges of $524,000.

•

On December 10, 2013, the Company announced the closure of its Baltimore steel facility, which ceased operations in May 2014. The Company shipped the remaining inventory at the Baltimore facility to other Worthington locations and completely exited the facility before the end of the first quarter of fiscal 2015. In connection with this matter, the Company recognized an accrual of $1,380,000 for expected severance costs.

•

During May 2014, the Company completed the closure of its Mid-Rise construction business. In connection with this matter, the Company recognized an accrual of $564,000 for expected severance costs.