Segment Operations

6 Months Ended

Nov. 30, 2021

Segment Reporting [Abstract]

Segment Operations

NOTE O – Segment Operations

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes. Factors used to identify reportable operating 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.  

Effective June 1, 2021, we reorganized the management structure of our Pressure Cylinders business to better align around the end markets which it served, resulting in three new reportable operating segments: Consumer Products, Building Products and Sustainable Energy Solutions.  Our Steel Processing operating segment was not impacted by these changes.  A discussion of each of these new reportable segments is included below.

Consumer Products: This reportable segment is comprised of brands that offer market-leading products in the tools, outdoor living and celebrations end markets with brands that include Coleman®, Bernzomatic®, Balloon Time®, Mag Torch®, General®, Garden-Weasel®, Pactool International®, Hawkeye™ and Worthington Pro-Grade™.  This market sector includes propane-filled cylinders for torches, camping stoves and other applications, certain propane gas (LPG) cylinders, hand-held torches, Balloon Time® helium-filled balloon kits, and specialized hand tools and instruments.  These products are sold primarily to mass merchandisers, retailers and distributors. LPG cylinders, which hold fuel for barbeque grills and recreational vehicle equipment, are also sold through cylinder exchangers.

Building Products: This reportable segment includes refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products. Cylinders are generally sold to gas producers and distributors. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential, and automotive air conditioning and refrigeration systems. LPG cylinders hold fuel for residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America).Well water tanks and expansion tanks are used in the residential market with the latter also sold into commercial markets.  Specialty products include a variety of fire suppression and chemical tanks.  

Sustainable Energy Solutions: This reportable segment, which is primarily based in Europe, includes on-board fueling systems and services, as well as gas containment solutions and services for storage, transport and distribution of industrial gases.  It includes high pressure and acetylene cylinders for life support cylinders and alternative fuel cylinders used to hold compressed natural gas (CNG) and hydrogen for automobiles, buses, and light-duty trucks.

Other:  Divested businesses historically reported within Pressure Cylinders but no longer included in the Company’s management structure are presented within the “Other” category, on a historical basis, through the date of disposal.  For the periods presented, these include the following:  Structural Composites Industries, LLC (until March 2021); Oil & Gas Equipment (until January 2021); and Cryogenic Storage and Cryo-Science (until October 2020). The Other category also includes the results of our former Engineered Cabs operating segment, on a historical basis, through the date of disposition (November 1, 2019) as well as certain income and expense items not allocated to our operating segments.

Prior period financial information has been revised to reflect the operating results and financial position of the new reportable operating segments. Historical financial information presented herein reflects this change.

Concurrent with the change in management structure described above, the profit measure that the Company’s CODM uses to assess segment performance and allocate resources was changed from operating income to adjusted earnings (loss) before interest and taxes (“EBIT”).  In general, adjusted EBIT excludes impairment and restructuring charges (gains), but may also exclude other items that management believes are not reflective of, and thus should not be included when evaluating, the performance of the Company’s ongoing operations. Adjusted EBIT is a non-GAAP measure and is used by management to evaluate segment performance, engage in financial and operational planning and determine incentive compensation because we believe that this measure provides additional perspective and, in some circumstances is more closely correlated to, the performance of the Company’s ongoing operations.

For the periods presented, equity income from our unconsolidated joint ventures is included in the measurement of segment profit as shown in the table below.  The related investment balances are included in segment net assets in the same manner.

Unconsolidated Joint Ventures Included in Segment Profit
Steel Processing	Consumer Products	Building Products	Sustainable Energy Solutions	Other
Serviacero Worthington	N/A	WAVE	N/A	Cabs
		ClarkDietrich		ArtiFlex

The following table presents summarized financial information for our reportable segments for the periods indicated.

	Three Months Ended November 30, 2021
(in thousands)	Steel Processing			Consumer Products		Building Products		Sustainable Energy Solutions		Other			Consolidated
Net sales	$	937,842		$	140,793	$	121,125	$	33,101	$	-		$	1,232,861
Restructuring and other income, net (1)		(182	)		-		-		-		(1,822	)		(2,004	)
Miscellaneous income, net		17			159		218		82		564			1,040
Equity in net income of unconsolidated affiliates		8,823			-		49,894		-		1,501			60,218
Adjusted earnings before interest and taxes		71,925			17,584		54,718		796		1,893			146,916

	Three Months Ended November 30, 2020
(in thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions		Other			Consolidated
Net sales	$	468,723		$	117,513		$	93,989	$	34,023	$	16,844		$	731,092
Impairment of long-lived assets		-			-			-		-		3,815			3,815
Restructuring and other expense, net (1)		375			120			-		-		7,101			7,596
Incremental expenses related to Nikola gains		-			-			-		-		4,570			4,570
Miscellaneous income (loss), net		(5	)		(96	)		70		69		338			376
Equity in net income of unconsolidated affiliates		1,861			-			22,692		-		1,078			25,631
Adjusted earnings (loss) before interest and taxes		34,381			17,432			25,964		1,534		(5,633	)		73,678

⁽¹⁾ Includes the noncontrolling interest portion of restructuring (charges) gains of $81 and $(142) for the three months ended November 30, 2021 and 2020, respectively

	Six Months Ended November 30, 2021
(in thousands)	Steel Processing			Consumer Products		Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	1,760,652		$	288,576	$	235,868	$	58,583		$	-		$	2,343,679
Restructuring and other income, net (2)		(12,313	)		-		-		(143	)		(1,822	)		(14,278	)
Miscellaneous income, net		47			209		144		22			1,248			1,670
Equity in net income of unconsolidated affiliates		18,172			-		92,887		-			2,075			113,134
Adjusted earnings (loss) before interest and taxes		179,617			38,140		103,471		(1,760	)		1,479			320,947

	Six Months Ended November 30, 2020
(in thousands)	Steel Processing			Consumer Products			Building Products			Sustainable Energy Solutions		Other			Consolidated
Net sales	$	899,743		$	251,135		$	182,092		$	61,880	$	39,151		$	1,434,001
Impairment of long-lived assets		-			506			1,423			-		11,810			13,739
Restructuring and other expense, net (2)		1,846			120			-			-		7,478			9,444
Incremental expenses related to Nikola gains		-			-			-			-		54,081			54,081
Miscellaneous income (loss), net		(48	)		(117	)		(92	)		151		933			827
Equity in net income of unconsolidated affiliates		3,170			-			45,243			-		852			49,265
Adjusted earnings (loss) before interest and taxes		48,557			41,341			49,337			973		(13,461	)		126,747
(2) Includes the noncontrolling interest portion of restructuring (charges) gains of $6,027 and $(257) for the six months ended November 30, 2021 and 2020, respectively

Total assets for each of our reportable segments as of the dates indicated were as follows:

	November 30,		May 31,
	2021		2021
Total assets
Steel Processing	$	1,858,313	$	1,359,598
Consumer Products		547,132		541,028
Building Products		615,755		664,113
Sustainable Energy Solutions		118,834		169,550
Other		377,598		638,956
Total assets	$	3,517,632	$	3,373,245