Restructuring and Other Expense (Income), Net

12 Months Ended

May 31, 2020

Restructuring And Related Activities [Abstract]

Restructuring and Other Expense (Income), Net

Note E – Restructuring and Other Expense (Income), Net

We consider restructuring activities to be programs whereby we fundamentally change our operations such as closing and consolidating manufacturing facilities or moving manufacturing of a product to another location.  Restructuring activities may also involve substantial realignment of the management structure of a business unit in response to changing market conditions.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense, net financial statement caption in our consolidated statement of earnings for fiscal 2020, is summarized below:

	Beginning										Ending
(in thousands)	Balance		Expense		Payments			Adjustments			Balance
Early retirement and severance	$	774	$	9,096	$	(3,245	)	$	(89	)	$	6,536
Facility exit and other costs		2		829		(730	)		55			156
	$	776		9,925	$	(3,975	)	$	(34	)	$	6,692
Net loss on sale of assets				123
Restructuring and other expense, net			$	10,048

During fiscal 2020, the following actions were taken related to the Company’s restructuring activities:

• In July 2019, Pressure Cylinders completed the sale of its cryogenics business in Turkey, the net assets of which had been previously classified as assets held for sale. In connection with the sale, the Company realized net cash proceeds of $8,295,000 and recognized a net loss of $481,000.

• In November 2019, the Company contributed substantially all of the net assets of the Engineered Cabs business to the newly-formed Cabs joint venture. In connection with the transaction, the Company recognized a net gain of $50,000. In fiscal 2020, final closing adjustments resulted in the recognition of an additional net gain of $208,000.  Subsequent to closing the transaction, the Company sold some assets of the retained fabricated products business in Stow, Ohio for a net gain of $100,000 and recognized facility exit costs of $103,000.

• In February 2020, the Company announced the closure of the Hermosillo, Mexico facility and an office in Sonata, Mexico, both operated by the Company’s consolidated joint venture, TWB within Steel Processing. In connection with the closures, and a reduction in personnel at Puebla, Mexico, the Company recognized severance expense of $620,000.

• In February 2020, the Company’s WSP joint venture within Steel Processing committed to plans to close and sell the assets of its Canton, Michigan facility. In connection with the sale, the Company recognized severance expense of $450,000.

• In the third quarter of fiscal 2020, the Company announced a plan, within Pressure Cylinders, to consolidate its oil & gas equipment manufacturing operations in Wooster, Ohio into its existing facility in Bremen, Ohio.  In connection with the consolidation, the Company recognized $2,313,000 in severance expense and $522,000 in facility exit costs.  

• In the fourth quarter of fiscal 2020, the Company recognized severance expense of $2,175,000 in Steel Processing, $2,296,000 in Pressure Cylinders and $873,000 in Other in connection with the reduction in workforce related to the impact of COVID-19.

• In the fourth quarter of fiscal 2020, the Company committed to plans to close the packaging solutions business served through the facility in Greensburg, Indiana.  In connection with the closure, the Company recognized $166,000 in severance expenses.

• In connection with other non-significant restructuring activities, the Company recognized severance expense of $203,000 within Steel Processing and facility exit costs of $204,000, of which $151,000 was within Pressure Cylinders and $53,000 in Steel Processing.

The total liability as of May 31, 2020 is expected to be paid in the next twelve months.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption in our consolidated statement of earnings for fiscal 2019, is summarized below:

	Beginning											Ending
(in thousands)	Balance		Expense			Payments			Adjustments			Balance
Early retirement and severance	$	1,116	$	1,899		$	(2,127	)	$	(114	)	$	774
Facility exit and other costs		-		503			(313	)		(188	)		2
	$	1,116		2,402		$	(2,440	)	$	(302	)	$	776
Net gain on sale of assets				(13,420	)
Restructuring and other income, net			$	(11,018	)

During fiscal 2019, the following actions were taken related to the Company’s restructuring activities:

• In connection with the consolidation of the Company’s industrial gas operations in Portugal following the acquisition of AMTROL in fiscal 2018, the Company recognized severance expense of $1,086,000 and facility exit costs of $513,000 within Pressure Cylinders.

• Within the Pressure Cylinders business, the Company sold two oil & gas manufacturing facilities resulting in net proceeds of $20,256,000 and a net gain on disposal of $1,962,000.

• In connection with the sale of the operating assets and real property related to the solder business and certain brazing assets within the Pressure Cylinders business, the Company recognized net proceeds of $27,577,000, severance expense of $89,000 and a net gain on disposal of $11,458,000.

• Upon exit of the North America compressed natural gas (“CNG”) fuel system market in the Salt Lake City, Utah facility, the Company recognized severance expense of $519,000 within Pressure Cylinders.

• In connection with other non-significant restructuring activities, the Company recognized severance expense of $205,000 within Pressure Cylinders and a reduction to facility exit costs of $10,000 within Steel Processing.

The total liability as of May 31, 2019 was expected to be paid in the immediately following twelve months.