Restructuring

9 Months Ended

Feb. 28, 2025

Restructuring and Related Activities [Abstract]

Restructuring

NOTE 3 — RESTRUCTURING

We record restructuring charges associated with management-approved restructuring plans to either reorganize one or more of our business segments, or to remove duplicative headcount and infrastructure associated with our businesses. Restructuring charges can include severance costs to eliminate a specified number of associates, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other costs. We record the short-term portion of our restructuring liability in other accrued liabilities and the long-term portion, if any, in other long-term liabilities in our Consolidated Balance Sheets.

In August 2022, we approved and announced our Margin Achievement Plan 2025 (“MAP 2025”), which is a multi-year restructuring plan designed to improve margins by streamlining business processes, reducing working capital, implementing commercial initiatives to drive improved mix, pricing discipline and salesforce effectiveness and improving operating efficiency. Most activities under MAP 2025 are anticipated to be completed by the end of fiscal 2025; however, we expect some costs to extend beyond this date.

The current total expected costs associated with this plan are outlined below and increased approximately $3.1 million compared to our prior quarter estimate, attributable to increases in expected facility closure and other related costs of $2.7 million and increases in expected severance and benefit charges of $0.4 million. Throughout our MAP 2025 initiative, we will continue to assess and find areas of improvement and cost savings. As such, the final implementation of the aforementioned phases and total expected costs are subject to change.

USL Restructuring

During the quarter ended August 31, 2023, we recognized a loss on sale of $4.5 million in connection with the divestiture of USL’s Bridgecare services division. The Bridgecare division was a contracting business focused on the installation of joints and waterproofing in the UK. The loss on this sale was included in selling, general and administrative ("SG&A") expenses in our Consolidated Statements of Income and net loss on sales of assets and businesses in our Consolidated Statements of Cash Flows.

Additionally, during the quarter ended August 31, 2023, in connection with MAP 2025, we realigned certain businesses and management structures within our segments. Within our PCG segment, certain businesses of our USL reporting unit were transferred to our Fibergrate, Carboline and Stonhard reporting units. As a result of this change in our market strategy, we performed an interim impairment assessment of the USL indefinite-lived tradename. Calculating the fair value of the USL’s indefinite-lived tradename required the use of various estimates and assumptions. We estimated the fair value of USL’s indefinite-lived tradename by applying a relief-from-royalty calculation, which included discounted future cash flows related to projected revenues impacted by this decision. In applying this methodology, we relied on a number of factors, including actual and forecasted revenues and market data. As the carrying amount of the tradename exceeded its fair value, an impairment loss of $3.3 million was recorded for the three months ended August 31, 2023. This impairment loss was classified as restructuring expense within our PCG segment.

Following is a summary of the charges recorded in connection with MAP 2025 by reportable segment for the three- and nine-month periods ending February 28, 2025, as well as the total expected costs related to projects identified to date:

	Three Months Ended		Nine Months Ended		Cumulative Costs			Total Expected
(In thousands)	February 28, 2025		February 28, 2025		to Date			Costs
Construction Products Group ("CPG") Segment:
Severance and benefit costs	$	759	$	2,587	$	17,790		$	20,152
Facility closure and other related costs		238		908		1,516			8,033
Total Charges	$	997	$	3,495	$	19,306		$	28,185
Performance Coatings Group ("PCG") Segment:
Severance and benefit costs	$	227	$	1,294	$	5,153		$	5,617
Facility closure and other related costs		65		77		249			1,326
Other restructuring costs		-		-		7,092			7,092
Total Charges	$	292	$	1,371	$	12,494		$	14,035
Consumer Segment:
Severance and benefit costs	$	752	$	8,108	$	17,881		$	18,220
Facility closure and other related costs		1,033		1,490		2,267			3,766
Total Charges	$	1,785	$	9,598	$	20,148		$	21,986
Specialty Products Group ("SPG") Segment:
Severance and benefit costs	$	236	$	2,126	$	5,825		$	5,899
Facility closure and other related costs		146		1,625		2,160			2,817
Total Charges	$	382	$	3,751	$	7,985		$	8,716
Corporate/Other:
Severance and benefit (credits)	$	-	$	-	$	(50	)	$	(50	)
Total Charges	$	-	$	-	$	(50	)	$	(50	)
Consolidated:
Severance and benefit costs	$	1,974	$	14,115	$	46,599		$	49,838
Facility closure and other related costs		1,482		4,100		6,192			15,942
Other restructuring costs		-		-		7,092			7,092
Total Charges	$	3,456	$	18,215	$	59,883		$	72,872

Following is a summary of the charges recorded in connection with MAP 2025 by reportable segment for the three- and nine-month periods ending February 29, 2024:

	Three Months Ended		Nine Months Ended
(In thousands)	February 29, 2024		February 29, 2024
CPG Segment:
Severance and benefit costs	$	4,034	$	4,836
Facility closure and other related costs		163		163
Total Charges	$	4,197	$	4,999
PCG Segment:
Severance and benefit costs	$	579	$	1,623
Facility closure and other related costs		2		125
Other restructuring costs (a)		-		4,555
Total Charges	$	581	$	6,303
Consumer Segment:
Severance and benefit costs	$	817	$	852
Facility closure and other related costs		18		32
Total Charges	$	835	$	884
SPG Segment:
Severance and benefit costs	$	639	$	1,774
Facility closure and other related costs		107		136
Total Charges	$	746	$	1,910
Consolidated:
Severance and benefit costs	$	6,069	$	9,085
Facility closure and other related costs		290		456
Other restructuring costs		-		4,555
Total Charges	$	6,359	$	14,096

(a)Of the $4.6 million of other restructuring costs incurred for the nine-month period ending February 29, 2024, $3.3 million is associated with the impairment of an indefinite-lived tradename as described above.

A summary of the activity in the restructuring reserves related to MAP 2025 is as follows:

(in thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs		Total
Balance at November 30, 2024	$	17,625		$	289		$	-	$	17,914
Additions charged to expense		1,974			1,482			-		3,456
Cash payments charged against reserve		(5,033	)		(1,759	)		-		(6,792	)
Non-cash charges and other adjustments		(383	)		-			-		(383	)
Balance at February 28, 2025	$	14,183		$	12		$	-	$	14,195

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs		Total
Balance at June 1, 2024	$	17,351		$	18		$	-	$	17,369
Additions charged to expense		14,115			4,100			-		18,215
Cash payments charged against reserve		(16,436	)		(4,106	)		-		(20,542	)
Non-cash charges and other adjustments		(847	)		-			-		(847	)
Balance at February 28, 2025	$	14,183		$	12		$	-	$	14,195

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs		Total
Balance at November 30, 2023	$	2,805		$	-		$	-	$	2,805
Additions charged to expense		6,069			290			-		6,359
Cash payments charged against reserve		(1,863	)		(288	)		-		(2,151	)
Non-cash charges and other adjustments		(1	)		-			-		(1	)
Balance at February 29, 2024	$	7,010		$	2		$	-	$	7,012

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at June 1, 2023	$	2,717		$	-		$	-		$	2,717
Additions charged to expense		9,085			456			4,555			14,096
Cash payments charged against reserve		(4,808	)		(454	)		-			(5,262	)
Non-cash charges and other adjustments		16			-			(4,555	)		(4,539	)
Balance at February 29, 2024	$	7,010		$	2		$	-		$	7,012