Contingent Liabilities

3 Months Ended

Aug. 31, 2013

Contingent Liabilities

NOTE D – Contingent Liabilities

On August 5, 2013, we tendered to our excess loss carrier, who accepted the tender, a wrongful death claim against the Company involving a MAPP gas cylinder. Pursuant to the tender and its acceptance, our overall exposure related to this matter is limited to $2,000,000. As a result, a pre-tax charge of $2,000,000 was recorded within SG&A expense during the three months ended August 31, 2013.

We are defendants in certain legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

Insurance Recoveries

On August 19, 2013, a fire occurred at our Pressure Cylinders facility in Kienberg, Austria, in the building that houses the massing process in the production of acetylene cylinders. The other portions of the Austrian facility were not damaged; however, the massing building sustained extensive damage and was rendered inoperable. We have incurred losses related to the destruction of assets caused by the fire and expect to incur incremental business interruption costs in future periods. The Company has business interruption and property damage insurance. During the three months ended August 31, 2013, the Company recognized charges of $358,000 for the impairment of fixed assets destroyed in the fire. We have determined that the receipt of reimbursement for these costs is probable and in accordance with our insurance policies and, therefore, have recorded a receivable for the recovery of this amount.