Restructuring and Other Expense

3 Months Ended

Aug. 31, 2012

NOTE C – Restructuring and Other Expense

In fiscal 2008, we initiated a Transformation Plan (the “Transformation Plan”) with the overall goal to improve our sustainable earnings potential, asset utilization and operational performance. The Transformation Plan focuses on cost reduction, margin expansion and organizational capability improvements and, in the process, seeks to drive excellence in three core competencies: sales; operations; and supply chain management. The Transformation Plan is comprehensive in scope and includes aggressive diagnostic and implementation phases.

To date, we have completed the transformation phases in each of the core facilities within our Steel Processing operating segment, including the facilities of our Mexican joint venture. We also substantially completed the transformation phases at our metal framing facilities prior to their contribution to ClarkDietrich. Transformation efforts within our Pressure Cylinders operating segment, which began during the first quarter of fiscal 2012, are ongoing. In addition, during the three months ended August 31, 2012, we initiated the diagnostics phase of the Transformation Plan in our Engineered Cabs operating segment.

During the quarter ended August 31, 2012, the following actions were taken in connection with the Transformation Plan:

•

In connection with the wind-down of our former Metal Framing operating segment:

Approximately $231,000 of facility exit and other costs were incurred in connection with the closure of the retained facilities.

The severance accrual was adjusted downward, resulting in a $235,000 credit to earnings.

Certain assets of the retained facilities classified as held for sale were disposed of for cash proceeds of $3,526,000 resulting in a net gain of $1,158,000.

These items were recognized within the joint venture transactions line item in our consolidated statements of earnings to correspond with amounts previously recognized in connection with the formation of ClarkDietrich and the subsequent wind-down of our former Metal Framing operating segment.

•

In connection with the closure of our commercial stairs business, we incurred net charges of approximately $312,000, consisting primarily of facility exit and other costs.

•

In connection with certain organizational changes impacting our Global Group operating segment, we accrued approximately $85,000 of employee severance. For further information regarding these organizational changes, refer to “NOTE K – Segment Operations.”

A progression of the liabilities created as part of the Transformation Plan, combined with a reconciliation to the restructuring and other expense line item in our consolidated statement of earnings for the three months ended August 31, 2012 is summarized as follows:


(in thousands)	Beginning Balance		Expense			Payments			Adjustments			Ending Balance
Early retirement and severance	$	4,892	$	(165	)	$	(510	)	$	(3	)	$	4,214
Facility exit and other costs		691		564			(500	)		(333	)		422

	$	5,583		399		$	(1,010	)	$	(336	)	$	4,636

Net gain on asset disposals				(1,158	)
Less: joint venture transactions				1,162

Restructuring and other expense			$	403

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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