CHANGES IN BUSINESS

3 Months Ended

Nov. 30, 2019

NOTE 2. CHANGES IN BUSINESS

Acquisition

On November 5, 2018 (the "Acquisition Date"), the Company completed the acquisition of 33 rebar fabrication facilities in the United States ("U.S."), as well as four electric arc furnace ("EAF") mini mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California from Gerdau S.A., hereinafter collectively referred to as the "Acquired Businesses." The total cash purchase price, including working capital adjustments, was $701.2 million, and was funded through a combination of domestic cash on-hand and borrowings under a term loan (the "Term Loan").

The purchase price paid was allocated between the acquired mills and fabrication facilities. The results of operations of the Acquired Businesses are reflected in the Company’s condensed consolidated financial statements from the Acquisition Date. The purchase price was allocated among assets acquired and liabilities assumed at fair value and was finalized on November 5, 2019. There were no changes during the quarter ended November 30, 2019 from the amounts disclosed in Note 3, Acquisition, to the consolidated financial statements in the 2019 Form 10-K.

Pro Forma Supplemental Information

Supplemental information on an unaudited pro forma basis is presented below as if the acquisition of the Acquired Businesses (the "Acquisition") occurred on September 1, 2017. The pro forma financial information is presented for comparative purposes only, based on significant estimates and assumptions, which the Company believes to be reasonable, but not necessarily indicative of future results of operations or the results that would have been reported if the Acquisition had been completed on September 1, 2017. These results were not used as part of management analysis of the financial results and performance of the Company or the Acquired Businesses. These results are adjusted, where possible, for transaction and integration-related costs.



	Three Months Ended November 30,
(in thousands)	2018		2017*
Pro forma net sales	$	1,557,032	$	1,417,583
Pro forma net earnings (loss)	38,059		(4,749		)

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*Non-recurring acquisition and integration costs of approximately $43.3 million incurred have been included in pro forma net earnings for the three months ended November 30, 2017.

Facility Closure

In October 2019, the Company decided to close the melting operations at its Rancho Cucamonga facility. Due to this decision, the Company recorded $6.3 million of expense in the three months ended November 30, 2019 related to severance, pension curtailment and vendor agreement terminations. At November 30, 2019, the remaining liability to be paid related to these expenses was $3.9 million and was included in accrued expenses and other payables on the Company's condensed consolidated balance sheets.