Segment Data

12 Months Ended

May 31, 2023

Segment Reporting [Abstract]

Segment Data

Note P – Segment Data

Our operations are managed principally on a products and services basis. Factors used to identify reportable 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 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 our reportable segments is included below.

Steel Processing: This operating segment is a value-added processor of carbon flat-rolled steel, a producer of laser welded solutions and a provider of electrical steel laminations. This segment includes our three consolidated operating joint ventures: Samuel, Spartan, and TWB. It also includes WSP, which became a non-operating joint venture on October 31, 2022, when we sold the remaining net assets of the joint venture. See “Note F – Restructuring and Other (Income) Expense, Net” for additional information. Spartan operates a cold-rolled, hot-dipped coating line and TWB operates a laser welded blanking business. WSP served primarily as a toll processor and its services included slitting, blanking, cutting-to-length, laser blanking, and warehousing. Samuel operates steel pickling facilities in Ohio. Steel Processing is an intermediate processor of carbon flat-rolled steel. This operating segment’s processing capabilities include cold reducing, configured blanking, cutting-to-length, dry-lube, hot dip coating, annealing, laser welding, pickling, slitting, oscillate slitting, temper rolling, tension leveling, and non-metallic coating, including acrylic and paint coating, aluminum die casting, progressive stamping and notching, and transformer core winding and blank sheet stacking. Steel Processing sells to customers principally in the automotive, aerospace, agricultural, appliance, construction, container, energy, hardware, heavy-truck, HVAC, lawn and garden, leisure and recreation, office furniture and office equipment end markets. Steel Processing 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 operating segment was approximately 71.1%, 75.0% and 64.9%, in fiscal 2023, fiscal 2022 and fiscal 2021, respectively.

Consumer Products: This operating segment consists of products in the tools, outdoor living and celebrations end markets sold under market-leading brands that include Coleman® (licensed), Bernzomatic®, Balloon Time®, Mag-Torch®, General®, Garden-Weasel®, Pactool International®, Hawkeye™, Level5® and Worthington Pro Grade™. These include propane-filled cylinders for torches, camping stoves and other applications, LPG cylinders, handheld torches, helium-filled balloon kits, specialized hand tools and instruments and drywall tools and instruments 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. The percentage of our consolidated net sales generated by the Consumer Products operating segment was approximately 14.0%, 12.1% and 16.5% in fiscal 2023, fiscal 2022, and fiscal 2021, respectively.

Building Products: This operating segment sells refrigerant and LPG cylinders, well water and expansion tanks, and other specialty products, which 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 primarily in the residential market with certain products also sold to commercial markets. Specialty products include a variety of fire suppression tanks, chemical tanks, and foam and adhesive tanks. The percentage of our consolidated net sales generated by the Building Products operating segment was approximately 11.9%, 10.3% and 12.7% in fiscal 2023, fiscal 2022, and fiscal 2021, respectively.

Sustainable Energy Solutions: This operating segment, which is primarily based in Europe, sells onboard 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 systems and alternative fuel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. The percentage of our consolidated net sales generated by the Sustainable Energy Solutions operating segment was approximately 3.0%, 2.5% and 4.3% in fiscal 2023, fiscal 2022, and fiscal 2021, respectively.

Other: Divested businesses historically reported within our former Pressure Cylinders operating segment but no longer included in our 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: SCI (until March 2021); Oil & Gas Equipment (until January 2021); and Cryogenic Storage and Cryo-Science (until October 2020). The Other category also includes 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 operating segments. Historical financial information presented herein reflects this change.

Concurrent with the change in management structure described above, the profit measure that our Chief Operating Decision Maker (“CODM”) uses to assess segment performance and allocate resources was changed from operating income to adjusted EBIT. EBIT is calculated by adding interest expense and income tax expense to net earnings attributable to controlling interest. 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 our ongoing operations. Adjusted EBIT is a non-GAAP financial measure and is used by management to evaluate operating segment performance, engage in financial and operational planning and determine incentive compensation.

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

Steel Processing	Consumer Products	Building Products	Sustainable Energy Solutions	Other
Serviacero Worthington	N/A	WAVE	N/A	Workhorse
		ClarkDietrich

The accounting policies of the reportable segments are described in “Note A – Summary of Significant Accounting Policies.” Inter-segment sales are not material.

The following tables present summarized financial information for our reportable segments for the past three fiscal years:

	2023
(In thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions		Other			Consolidated
Net sales	$	3,497,896		$	686,319		$	586,059	$	146,118	$	-		$	4,916,392
Capital expenditures		45,133			13,635			17,819		6,495		3,284			86,366
Depreciation and amortization		66,383			15,734			17,856		6,319		6,508			112,800
Impairment of long-lived assets		2,112			-			484		-		-			2,596
Restructuring and other (income) expense, net		(4,204	)		213			597		-		(1,177	)		(4,571	)
Separation costs		-			-			-		-		24,048			24,048
Miscellaneous income (expense), net		3,270			(205	)		349		199		(4,840	)		(1,227	)
Equity in net income of unconsolidated affiliates		7,725			-			166,427		-		(13,165	)		160,987
Adjusted EBIT (1)		121,686			78,047			204,611		917		(3,199	)		402,062

(1)Excludes the following:

•Impairment of long-lived assets because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, so their exclusion facilitates the comparison of historical and current financial results;

•Restructuring activities such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions;

•A non-cash settlement charge of $4,774 in miscellaneous income (expense), net within Other related to the pension lift-out transaction associated with the Gerstenslager Plan and described further in “Note M – Employee Pension Plans;”

•A loss of $16,059 for the settlement of final transaction costs within Other related to the sale of our 50% noncontrolling equity investment in ArtiFlex effective August 3, 2022;

•Separation costs of $24,048 within Other related to direct and incremental costs incurred in connection with the anticipated Separation, including audit, advisory, and legal costs;

•A pre-tax gain of $2,063 within Other related to a sale-leaseback transaction at Workhorse during fiscal 2023; and

•Noncontrolling interest portion of impairment of long-lived assets and restructuring gains of $1,734 within Steel Processing.

	2022
(In thousands)	Steel Processing			Consumer Products			Building Products			Sustainable Energy Solutions			Other			Consolidated
Net sales	$	3,933,021		$	636,478		$	541,757		$	130,954		$	9		$	5,242,219
Capital expenditures		35,898			13,375			31,064			6,445			7,818			94,600
Depreciation and amortization		55,771			10,919			18,112			6,554			7,471			98,827
Impairment of long-lived assets		3,076			-			-			-			-			3,076
Restructuring and other income, net		(14,480	)		-			(35	)		(143	)		(2,438	)		(17,096	)
Miscellaneous income (expense), net		862			(76	)		240			64			1,624			2,714
Equity in net income of unconsolidated affiliates		29,787			-			176,498			-			7,356			213,641
Adjusted EBIT (2)		203,272			94,302			216,608			(6,236	)		8,564			516,510

(2)Excludes the following:

•Impairment of long-lived assets because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, so their exclusion facilitates the comparison of historical and current financial results;

•Restructuring activities such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions;

•Noncontrolling interest portion of impairment of long-lived assets charges and restructuring income of $4,785.

	2021
(In thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions		Other			Consolidated
Net sales	$	2,059,397		$	523,697		$	402,038	$	134,890	$	51,407		$	3,171,429
Capital expenditures		28,306			13,334			22,705		8,652		9,181			82,178
Depreciation and amortization		40,870			10,145			17,321		6,699		12,619			87,654
Impairment of long-lived assets		-			506			1,423		-		11,810			13,739
Restructuring and other expense, net		1,883			41			256		10,293		43,624			56,097
Incremental expenses related to Nikola gains		-			-			-		-		50,624			50,624
Miscellaneous income (expense), net		(371	)		(512	)		194		203		2,649			2,163
Equity in net income of unconsolidated affiliates		15,965			-			103,447		-		3,913			123,325
Adjusted EBIT (3)		208,175			74,936			117,904		4,961		(10,505	)		395,471

(3)Excludes the following:

•Impairment of long-lived assets because they do not occur in the ordinary course of our ongoing business operations, are inherently unpredictable in timing and amount, and are non-cash, so their exclusion facilitates the comparison of historical and current financial results;

•Restructuring activities such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions;

•Noncontrolling interest portion of restructuring expense of $295;

•Gain on investment in Nikola of $655,102 and incremental expenses related to Nikola gains of $50,624.

Total assets for each of our reportable segments as of the end of the past two fiscal years were as follows:

	May 31,		May 31,
(In thousands)	2023		2022
Steel Processing	$	1,758,981	$	2,082,522
Consumer Products		615,430		577,026
Building Products		635,650		681,188
Sustainable Energy Solutions		129,872		114,084
Other		510,985		188,203
Total Assets	$	3,650,918	$	3,643,023

The following table presents net sales by geographic region for the past three fiscal years:

(In thousands)	2023		2022		2021
North America	$	4,268,082	$	4,937,396	$	2,956,962
International		648,310		304,823		214,467
Total	$	4,916,392	$	5,242,219	$	3,171,429

The following table presents property, plant and equipment, net, by geographic region as of the end of the past two fiscal years:

(In thousands)	2023		2022
North America	$	575,965	$	595,261
International		99,689		101,079
Total	$	675,654	$	696,340