Segment Operations

6 Months Ended

Nov. 30, 2023

Segment Reporting [Abstract]

Segment Operations

Note O – Segment Operations

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. As of November 30, 2023, our operations were organized under four operating segments: Steel Processing, Consumer Products, Building Products, and Sustainable Energy Solutions. As none of the operating segments were aggregated for segment reporting purposes, they corresponded with the reportable segments.

Segment information is prepared on the same basis that our chief operating decision maker (“CODM”), as defined in the accounting literature, reviews financial information for operational decision-making purposes. Factors used to identify operating segments include the nature of the products and services provided by each business, the management reporting structure, the similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative accounting guidance.

We have identified our Chief Executive Officer as our CODM. Our CODM assesses segment operating performance and allocates resources based on the profitability measure of adjusted EBIT. Adjusted EBIT excludes impairment and restructuring expense (income), but may also exclude other items, as described in the tables below, 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.

Impairment charges are excluded from adjusted EBIT 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, current and forecasted financial results. Refer to “Note E – Impairment of Long-Lived Assets” for additional information.

Restructuring activities consist of established programs that are not part of our ongoing operations, 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). Refer to “Note F – Restructuring and Other Expense (Income), Net” for additional information.

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

	Three Months Ended November 30, 2023
(In thousands)	Steel Processing		Consumer Products		Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	788,655	$	147,738	$	122,954	$	27,537		$	34		$	1,086,918
Restructuring and other expense, net		-		-		-		-			6			6
Separation costs		-		-		-		-			21,952			21,952
Miscellaneous income (expense), net		306		12		235		557			(90	)		1,020
Equity income		3,778		-		35,177		-			3,491			42,446
Adjusted EBIT (1)		6,762		9,510		40,284		(2,617	)		(1,090	)		52,849

(1)Excludes the following items in addition to impairment and restructuring activity:

•Direct and incremental costs associated with the Separation as discussed in “Note A – Basis of Presentation”; and

•Our share of the pre-tax gain realized by Workhorse in connection with the sale of the joint venture’s operations in Brazil of $2,780;

	Three Months Ended November 30, 2022
(In thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions		Other			Consolidated
Net sales	$	841,947		$	153,795		$	141,671	$	38,128	$	-		$	1,175,541
Restructuring and other income, net		(4,282	)		-			-		-		-			(4,282	)
Separation costs		-			-			-		-		9,246			9,246
Miscellaneous income (expense), net		850			(47	)		76		142		384			1,405
Equity income		1,906			-			35,107		-		(156	)		36,857
Adjusted EBIT (2)		(17,249	)		13,473			41,224		1,143		(3,291	)		35,300

(2)Excludes the following items in addition to impairment and restructuring activity:

•Direct and incremental costs associated with the Separation as discussed in “Note A – Basis of Presentation”;

•Incremental compensation expense of $525 within Consumer Products related to the earnout for the acquisition of Level5 Tools, LLC (“Level5”); and

•Noncontrolling interest portion of impairment of long-lived assets of $1,850 within Steel Processing.

	Six Months Ended November 30, 2023
(in thousands)	Steel Processing		Consumer Products		Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	1,669,993	$	297,151	$	256,822	$	56,174		$	34		$	2,280,174
Impairment of long-lived assets		1,401		-		-		-			-			1,401
Restructuring and other expense, net		-		-		-		-			6			6
Separation costs		-		-		-		-			27,987			27,987
Miscellaneous income (expense), net		1,018		43		292		838			(160	)		2,031
Loss on extinguishment of debt		-		-		-		-			(1,534	)		(1,534	)
Equity income		12,735		-		80,219		-			3,873			96,827
Adjusted EBIT (3)		84,762		18,502		94,300		(7,339	)		(959	)		189,266

(3)Excludes the following in addition to impairment and restructuring activity:

•Direct and incremental costs associated with the Separation as discussed in “Note A – Basis of Presentation”;

•The pre-tax loss on extinguishment of debt resulting from the redemption of the 2026 Notes, in full, on July 28, 2023; and

•Noncontrolling interest portion of impairment of long-lived assets of $519 within Steel Processing.

	Six Months Ended November 30, 2022
(in thousands)	Steel Processing			Consumer Products			Building Products		Sustainable Energy Solutions			Other			Consolidated
Net sales	$	1,880,827		$	342,497		$	291,994	$	68,888		$	-		$	2,584,206
Impairment of long-lived assets		312			-			-		-			-			312
Restructuring and other income, net		(4,205	)		-			-		-			(1,177	)		(5,382	)
Separation costs		-			-			-		-			9,246			9,246
Miscellaneous income (expense), net		1,035			(82	)		299		56			(4,989	)		(3,681	)
Equity income		3,676			-			78,973		-			(14,080	)		68,569
Adjusted EBIT (4)		17,663			34,406			93,959		(250	)		1,854			147,632

(4)Excludes the following in addition to impairment and restructuring activity:

•Direct and incremental costs associated with the Separation as discussed in “Note A – Basis of Presentation.”

•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 Company Bargaining Unit Employees’ Pension Plan;

•A loss of $15,759 within equity income related to the August 31, 2022, sale of our 50% noncontrolling interest in ArtiFlex;

•Incremental compensation expense of $1,050 within Consumer Products related to the Level5 earnout agreement; and

•Noncontrolling interest portion of the restructuring gain within Steel processing of $1,734 within Steel Processing.

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

	November 30,		May 31,
(In thousands)	2023		2023
Total assets
Steel Processing	$	1,834,226	$	1,758,981
Consumer Products		622,304		615,430
Building Products		611,771		635,650
Sustainable Energy Solutions		103,448		129,872
Other		412,388		510,985
Total assets	$	3,584,137	$	3,650,918