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Segment Data
 12 Months Ended
May 31, 2019
Segment Reporting [Abstract]  
Segment Data

Note O – Segment Data

Our operations are managed principally on a products and services basis and include three reportable business segments: Steel Processing, Pressure Cylinders and Engineered Cabs, each of which is comprised of a similar group of products and services.  Factors used to identify reportable business segments include the nature of the products and services provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative guidance.  A discussion of each of our reportable business segments is outlined below.

Effective June 1, 2017, we made certain organizational changes impacting the internal reporting and management structure of Worthington Steelpac Systems, LLC (“Packaging Solutions”).  As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing operating segment to the Engineered Cabs operating segment.  Previously reported segment information has not been restated to conform to this new presentation and is immaterial for all periods presented.

Steel Processing: The Steel Processing reportable segment consists of the Worthington Steel business unit and three consolidated joint ventures: Spartan, TWB and WSP.  Spartan operates a cold-rolled, hot-dipped galvanizing line and TWB operates a laser welded blanking business.  WSP serves primarily as a toll processor for United States Steel Corporation and others.  Its services include slitting, blanking, cutting-to-length, laser blanking, laser welding, tension leveling and warehousing.  Worthington Steel is an intermediate processor of flat-rolled steel.  This operating segment’s processing capabilities include cold reducing, configured blanking, coil fed laser blanking, cutting-to-length, dry-lube, hot-dipped galvanizing, hydrogen annealing, laser welding, pickling, slitting, oscillate slitting, temper rolling, tension leveling, and non-metallic coating, including  acrylic and paint coating. Worthington Steel sells to customers principally in the automotive, aerospace, agricultural, appliance, construction, container, hardware, heavy-truck, HVAC, lawn and garden, leisure and recreation, office furniture and office equipment markets. Worthington Steel also toll processes steel for steel mills, large end-users, service centers and other processors.  Toll processing is different from typical steel processing in that the mill, end-user or other party retains title to the steel and has the responsibility for selling the end product.  The Steel Processing reportable segment also includes the results of Packaging Solutions through May 31, 2017.  The percentage of our consolidated net sales generated by the Steel Processing reportable segment was approximately 65%, 63% and 69%, in fiscal 2019, fiscal 2018 and fiscal 2017, respectively.

Pressure Cylinders: The Pressure Cylinders reportable segment consists of the Worthington Cylinders business unit.  During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey and the net assets of the asset group have been presented separately as assets held for sale in our consolidated balance sheets.  The percentage of our consolidated net sales generated by the Pressure Cylinders reportable segment was approximately 32%, 34% and 28% in fiscal 2019, fiscal 2018 and fiscal 2017, respectively.  We acquired AMTROL on June 2, 2017, which has been included in the Pressure Cylinders reportable segment since that date, and accounted for approximately 7% of our consolidated net sales in both fiscal 2019 and fiscal 2018.

The Pressure Cylinders reportable segment manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil and gas equipment along with various accessories and related products for diversified end-use market applications.  The following is a description of these markets:

 

•

Industrial Products: This market sector includes high pressure and acetylene cylinders for industrial gases, refrigerant and certain propane gas (LPG) cylinders, alternative fuels, cryogenic equipment, and systems and services for handling liquid gasses, and other specialty products. Cylinders in this market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Industrial gas cylinders hold fuel for uses such as cutting, brazing and soldering, semiconductor production, and beverage delivery. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential and automotive air conditioning and refrigeration systems.  LPG cylinders hold fuel for barbeque grills, recreational vehicle equipment, residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Alternative fuels includes composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks, and to hold propane/autogas for automobiles and light- and medium-duty trucks. Cryogenic equipment and systems include LNG systems for marine and mining applications, liquid nitrogen storage freezers and shipping containers for organic specimens in healthcare markets, and tanks and trailers for liquefied nitrogen, oxygen, argon, hydrogen, and natural gas. Specialty products include a variety of fire suppression, life support and chemical tanks.

 

•

Consumer Products: This market sector includes propane-filled cylinders for torches, camping stoves and other applications, hand held torches, Balloon Time® helium-filled balloon kits, plumbing tools, well water tanks and expansion tanks. These products are sold primarily to mass merchandisers, retailers and distributors.

 

•

Oil & Gas Equipment:  This market sector includes steel storage tanks, separation equipment, controls and other products primarily used in the energy markets, including oil and gas and nuclear. This market sector also includes hoists and other marine products which are used principally in shipyard lift systems.

Engineered Cabs: The Engineered Cabs reportable segment consists of the Worthington Industries Engineered Cabs business unit, a non-captive designer and manufacturer of high-quality, custom-engineered open and enclosed cabs and operator stations and custom fabrications for heavy mobile equipment used primarily in the agricultural, construction, forestry, military and mining industries.  Engineered Cabs’ product design, engineering support and broad manufacturing capabilities enable it to produce cabs and structures used in products ranging from small utility equipment to large earthmovers.  Engineered Cabs also includes Packaging Solutions, effective June 1, 2017.  Packaging Solutions designs and manufactures reusable custom steel platforms, racks and pallets for supporting, protecting and handling products throughout the shipping process.  For each fiscal 2019, fiscal 2018 and fiscal 2017, the percentage of our consolidated net sales generated by the Engineered Cabs reportable segment was approximately 3%.

Other: Certain income and expense items not allocated to our operating segments are included in Other, including costs associated with our captive insurance company. The Other category also included the former WEI operating segment, through March 31, 2018 when we disposed of 65% of our 75% stake in the business effective March 31, 2018.  

The accounting policies of the reportable business segments and other operating segments are described in “Note A – Summary of Significant Accounting Policies.”  We evaluate operating segment performance based on operating income (loss). Inter-segment sales are not material.

The following table presents summarized financial information for our reportable business segments as of, and for the fiscal years ended, May 31:

 

(in thousands)

2019

 

 

2018

 

 

2017

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

2,435,818

 

 

$

2,252,771

 

 

$

2,074,869

 

Pressure Cylinders

 

1,207,798

 

 

 

1,206,183

 

 

 

829,846

 

Engineered Cabs

 

115,902

 

 

 

116,631

 

 

 

101,388

 

Other

 

38

 

 

 

6,035

 

 

 

8,005

 

Total net sales

$

3,759,556

 

 

$

3,581,620

 

 

$

3,014,108

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

89,761

 

 

$

152,690

 

 

$

170,481

 

Pressure Cylinders

 

69,872

 

 

 

23,396

 

 

 

54,098

 

Engineered Cabs

 

(14,664

)

 

 

(11,305

)

 

 

(7,685

)

Other

 

(205

)

 

 

(23,171

)

 

 

(3,773

)

Total operating income

$

144,764

 

 

$

141,610

 

 

$

213,121

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

40,374

 

 

$

43,331

 

 

$

42,861

 

Pressure Cylinders

 

42,403

 

 

 

46,691

 

 

 

31,052

 

Engineered Cabs

 

5,687

 

 

 

5,415

 

 

 

5,197

 

Other

 

7,138

 

 

 

7,922

 

 

 

7,683

 

Total depreciation and amortization

$

95,602

 

 

$

103,359

 

 

$

86,793

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of goodwill and long-lived assets

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

3,269

 

 

$

-

 

 

$

-

 

Pressure Cylinders

 

4,548

 

 

 

53,883

 

 

 

-

 

Engineered Cabs

 

-

 

 

 

-

 

 

 

-

 

Other

 

-

 

 

 

7,325

 

 

 

-

 

Total impairment of goodwill and long-lived assets

$

7,817

 

 

$

61,208

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other expense (income), net

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

(9

)

 

$

(10,087

)

 

$

1,828

 

Pressure Cylinders

 

(11,009

)

 

 

2,365

 

 

 

3,411

 

Engineered Cabs

 

-

 

 

 

(78

)

 

 

1,219

 

Other

 

-

 

 

 

379

 

 

 

(47

)

Total restructuring and other expense (income), net

$

(11,018

)

 

$

(7,421

)

 

$

6,411

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

924,966

 

 

$

999,238

 

 

$

882,863

 

Pressure Cylinders

 

1,123,115

 

 

 

1,147,268

 

 

 

766,611

 

Engineered Cabs

 

66,226

 

 

 

66,456

 

 

 

62,141

 

Other

 

396,489

 

 

 

408,825

 

 

 

613,729

 

Total assets

$

2,510,796

 

 

$

2,621,787

 

 

$

2,325,344

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

 

 

 

 

 

 

 

Steel Processing

$

39,114

 

 

$

31,966

 

 

$

40,775

 

Pressure Cylinders

 

37,558

 

 

 

32,697

 

 

 

24,798

 

Engineered Cabs

 

1,131

 

 

 

2,067

 

 

 

755

 

Other

 

6,696

 

 

 

9,358

 

 

 

2,058

 

Total capital expenditures

$

84,499

 

 

$

76,088

 

 

$

68,386

 

 

The following table presents net sales by geographic region for the fiscal years ended May 31:

 

(in thousands)

 

2019

 

 

2018

 

 

2017

 

North America

 

$

3,559,650

 

 

$

3,275,090

 

 

$

2,805,182

 

International

 

 

199,906

 

 

 

306,530

 

 

 

208,926

 

Total

 

$

3,759,556

 

 

$

3,581,620

 

 

$

3,014,108

 

 

The following table presents property, plant and equipment, net, by geographic region as of May 31:

 

(in thousands)

 

2019

 

 

2018

 

North America

 

$

514,519

 

 

$

512,439

 

International

 

 

64,145

 

 

 

72,531

 

Total

 

$

578,664

 

 

$

584,970