Segment Data

12 Months Ended

May 31, 2021

Segment Reporting [Abstract]

Segment Data

Note P – Segment Data

Our operations are managed principally on a products and services basis and during fiscal 2021, fiscal 2020 and fiscal 2019, included two reportable business segments: Steel Processing and Pressure Cylinders, 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 accounting guidance.  A discussion of each of our reportable business segments is included below.  See “Note W – Subsequent Events” for information related to the Company’s change in reportable business segments for Pressure Cylinders, effective at the start of fiscal 2022.

Steel Processing: The Steel Processing reportable segment consists of the Worthington Steel business unit and four consolidated joint ventures: Samuel, Spartan, TWB and WSP.  Spartan operates a cold-rolled, hot-dipped coating line and TWB operates a laser welded blanking business.  WSP serves primarily as a toll processor for United States Steel Corporation and others.  WSP’s services include slitting, blanking, cutting-to-length, laser blanking, tension leveling and warehousing.  Samuel operates steel pickling facilities in Ohio.  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 percentage of our consolidated net sales generated by the Steel Processing reportable segment was approximately 65%, 61% and 65%, in fiscal 2021, fiscal 2020 and fiscal 2019, respectively.

Pressure Cylinders: Through May 31, 2021, the Pressure Cylinders reportable segment consisted of the Worthington Cylinders business unit.  The percentage of consolidated net sales generated by the Pressure Cylinders reportable segment was approximately 35%, 37% and 32% in fiscal 2021, fiscal 2020, and fiscal 2019, respectively.

The Pressure Cylinders reportable segment manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil & 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 fuel cylinders, 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 fuel cylinders includes composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. 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, and specialized hand tools and instruments. These products are sold primarily to mass merchandisers, retailers and distributors.

• Oil & Gas Equipment:  This market sector included steel storage tanks, separation equipment, processing equipment and other products primarily used in the oil and gas markets prior to the divestiture of the business on January 29, 2021.

Other: Effective November 1, 2019, the Company deconsolidated substantially all of the net assets of the Engineered Cabs business, which had historically been treated as a separate reporting segment.  The deconsolidated net assets included the two primary manufacturing facilities of the Company’s Engineered Cabs business located in Greeneville, Tennessee and Watertown, South Dakota.  The remaining non-core assets of the Engineered Cabs business, including the fabricated products facility in Stow, Ohio, and the steel packaging facility in Greensburg, Indiana, were retained. The retained Engineered Cabs assets, which have since been closed, no longer qualify as a separate operating or reportable segment.  Accordingly, the activity related to our former Engineered Cabs operating segment has been reported in the “Other” category.  Segment information reported in previous periods has been restated to conform to this new presentation.

Certain income and expense items not allocated to our operating segments are included in Other, including product liability and healthcare reserves.

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. 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)	2021			2020			2019
Net sales
Steel Processing	$	2,059,397		$	1,859,670		$	2,435,818
Pressure Cylinders		1,110,973			1,148,424			1,207,798
Other		1,059			51,025			115,940
Total net sales	$	3,171,429		$	3,059,119		$	3,759,556
Operating income (loss)
Steel Processing	$	208,648		$	40,564		$	89,761
Pressure Cylinders		9,276			38,903			69,872
Other		(1,499	)		(54,968	)		(15,553	)
Segment operating income		216,425			24,499			144,080
Unallocated corporate and other		1,672			(2,010	)		684
Incremental expenses related to Nikola gains		(50,624	)		-			-
Total operating income	$	167,473		$	22,489		$	144,764
Depreciation and amortization
Steel Processing	$	40,870		$	40,819		$	40,374
Pressure Cylinders		38,885			42,565			42,403
Other		7,899			9,294			12,825
Total depreciation and amortization	$	87,654		$	92,678		$	95,602
Impairment of goodwill and long-lived assets
Steel Processing	$	-		$	1,839		$	3,269
Pressure Cylinders		13,739			37,153			4,548
Other		-			43,698			-
Total impairment of goodwill and long-lived assets	$	13,739		$	82,690		$	7,817
Restructuring and other expense (income), net
Steel Processing	$	1,883		$	3,501		$	(9	)
Pressure Cylinders		54,155			5,282			(11,009	)
Other		59			1,265			-
Total restructuring and other expense (income), net	$	56,097		$	10,048		$	(11,018	)
Total assets
Steel Processing	$	1,267,559		$	821,657		$	924,966
Pressure Cylinders		1,156,092			1,104,603			1,123,115
Other (1)		949,594			405,255			462,715
Total assets	$	3,373,245		$	2,331,515		$	2,510,796
Capital expenditures
Steel Processing	$	28,306		$	40,588		$	39,114
Pressure Cylinders		45,520			41,484			37,558
Other		8,352			13,431			7,827
Total capital expenditures	$	82,178		$	95,503		$	84,499

(1) The increase in assets for Other primarily relates to cash proceeds the Company received from the sale of its shares of Nikola common stock. For additional information, refer to “Note C – Investment in Nikola.”

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

(in thousands)	2021		2020		2019
North America	$	2,956,962	$	2,912,777	$	3,559,650
International		214,467		146,342		199,906
Total	$	3,171,429	$	3,059,119	$	3,759,556

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

(in thousands)	2021		2020
North America	$	442,348	$	503,393
International		72,669		69,251
Total	$	515,017	$	572,644