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Restructuring and Other (Income) Expense, Net
 12 Months Ended
May 31, 2023
Restructuring and Related Activities [Abstract]  
Restructuring and Other (Income) Expense, Net

Note F – Restructuring and Other (Income) Expense, 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 income, net financial statement caption in our consolidated statement of earnings for fiscal 2023, is summarized below:

 

 

 

Beginning

 

 

Expense

 

 

 

 

 

 

 

 

Ending

 

(In thousands)

 

Balance

 

 

(Income)

 

 

Payments

 

 

Adjustments

 

 

Balance

 

Early retirement and severance

 

$

541

 

 

$

895

 

 

$

(1,301

)

 

$

-

 

 

$

135

 

Net gain on sale of assets

 

 

 

 

 

(5,466

)

 

 

 

 

 

 

 

 

 

Restructuring and other income, net

 

 

 

 

$

(4,571

)

 

 

 

 

 

 

 

 

 

 

During fiscal 2023, the following actions were taken related to our restructuring activities:

•
On June 14, 2022, we sold real property in Tulsa, Oklahoma, for net cash proceeds of $5,775, resulting in a pre-tax gain of $1,177. These assets had been excluded from the sale of our former oil & gas equipment business in January 2021. The assets were classified as assets held for sale on our consolidated balance sheets immediately prior to the closing of the sale.
•
On October 31, 2022, our consolidated steel processing joint venture, WSP, sold its remaining manufacturing facility, located in Jackson, Michigan. Net cash proceeds of $21,277 were realized in connection with the transaction, of which $2,000 is being held in escrow for contingent indemnification obligations associated with general representations and warranties. The transaction resulted in a pre-tax gain of $3,926. The assets had a net book value of $14,263 and were classified as assets held for sale on our consolidated balance sheet as of May 31, 2022.

 

The total liability as of May 31, 2023 is expected to be paid in the immediately following 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 2022, is summarized below:

 

 

 

Beginning

 

 

Expense

 

 

 

 

 

 

 

 

Ending

 

(In thousands)

 

Balance

 

 

(Income)

 

 

Payments

 

 

Adjustments

 

 

Balance

 

Early retirement and severance

 

$

771

 

 

$

4

 

 

$

(368

)

 

$

134

 

 

$

541

 

Facility exit and other costs

 

 

449

 

 

 

(449

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

$

1,220

 

 

 

(445

)

 

$

(368

)

 

$

134

 

 

$

541

 

Net gain on sale of assets

 

 

 

 

 

(15,794

)

 

 

 

 

 

 

 

 

 

Gain on lease buyout

 

 

 

 

 

(857

)

 

 

 

 

 

 

 

 

 

Restructuring and other income, net

 

 

 

 

$

(17,096

)

 

 

 

 

 

 

 

 

 

 

During fiscal 2022, the following actions were taken related to our restructuring activities:

•
On June 9, 2021, our consolidated joint venture, WSP, sold the remaining assets of its Canton, Michigan, facility with a net book value of $7,606 for net cash proceeds of $19,850, resulting in a pre-tax gain of $12,244.
•
During fiscal 2022, we sold real property in Wooster, Ohio and Bremen, Ohio, for combined net cash proceeds of $8,723, resulting in aggregate pre-tax gains of $860. These assets were excluded from the sale of our former oil & gas equipment business in January 2021. The combined net book value classified as assets held for sale immediately prior to closing was $7,863.
•
We completed our exit of the Decatur, Alabama Steel Processing facility and sold the remaining fixed assets with a net book value of $1,366 for net cash proceeds of $4,000 resulting in a pre-tax gain of $2,634.
•
On September 10, 2021, we executed an agreement to buy out the remaining term of the operating lease at our fabricated products facility in Stow, Ohio, for $1,100, resulting in a pre-tax gain of $857. This facility was retained in connection with the divestiture of our former Engineered Cabs business and had not been operational since June 2020. All of the other assets of our former Engineered Cabs business that were retained were sold or otherwise written-off prior to fiscal 2022.