Restructuring

9 Months Ended

Feb. 28, 2021

Restructuring And Related Activities [Abstract]

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 employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other costs. Restructuring charges are recorded based upon planned employee termination dates and site closure and consolidation plans. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. 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.

MAP to Growth

Between May and August 2018, we approved and implemented the initial phases of a multi-year restructuring plan, which was originally referred to as the 2020 Margin Acceleration Plan (“2020 MAP to Growth”). The initial phases of our 2020 MAP to Growth affected all of our reportable segments, as well as our corporate/nonoperating segment, and focused on margin improvement by simplifying business processes; reducing inventory categories and rationalizing SKUs; eliminating underperforming businesses; reducing headcount and working capital; and improving operating efficiency. The activities included in the initial phases of the restructuring activities have been substantially completed.

The disruption caused by the outbreak of Covid-19 (“Covid”) delayed the finalization of our 2020 MAP to Growth past the original target completion date of December 31, 2020. In recognition of the fact our restructuring plan extends past calendar year 2020, we will now refer to it simply as “MAP to Growth.”

As previously disclosed, we expect to utilize the remainder of fiscal year 2021 to achieve the goals originally set forth in our MAP to Growth. Certain of these projects may not be finalized until fiscal year 2022 and we would expect to continue to recognize restructuring expense throughout fiscal year 2022, as projects related to our MAP to Growth are executed and completed. As such, the final implementation and total expected costs are subject to change.

Our execution of the MAP to Growth will continue to drive the de-layering and simplification of management and businesses associated with group realignment. We have implemented four center-led functional areas including manufacturing and operations; procurement and supply chain; information technology; and accounting and finance.

Our MAP to Growth optimizes our manufacturing facilities and will ultimately provide more efficient plant and distribution facilities. Through the balance sheet date, in association with our MAP to Growth, we have completed, or are in the process of completing, the planned closure of 26 plants and 27 warehouses. We also expect to incur additional severance and benefit costs as part of our planned closure of these facilities.

Throughout the remainder of our MAP to Growth, we will continue to assess and find areas of improvement and cost savings. As such, the final implementation and total expected costs are subject to change. In addition to the announced plan, we have continued to broaden the scope of our MAP to Growth, specifically in consolidation of the general and administrative areas, potential outsourcing, as well as additional future plant closures and consolidations; the estimated costs of which have not yet been finalized. The current total expected costs associated with this plan are outlined in the table below and increased by approximately $0.8 million compared to our previous estimate, primarily attributable to increases in expected severance and benefit charges of $1.3 million and expected facility closure and other related costs of $0.2 million. These increases were partially offset by a decrease in expected other restructuring costs of $0.7 million.

Following is a summary of the charges recorded in connection with restructuring by reportable segment:

	Three Months Ended			Nine Months Ended		Cumulative Costs		Total Expected
(In thousands)	February 28, 2021			February 28, 2021		to Date		Costs
Construction Products Group ("CPG") Segment:
Severance and benefit costs (a)	$	255		$	1,829	$	19,923	$	20,615
Facility closure and other related costs		665			1,473		5,950		6,617
Other restructuring costs		(60	)		38		1,978		1,978
Total Charges	$	860		$	3,340	$	27,851	$	29,210

Performance Coatings Group ("PCG") Segment:
Severance and benefit costs (b)	$	118		$	1,959	$	15,344	$	16,748
Facility closure and other related costs		265			1,109		6,456		7,327
Other restructuring costs		-			213		814		814
Total Charges	$	383		$	3,281	$	22,614	$	24,889

Consumer Segment:
Severance and benefit costs (c)	$	11		$	797	$	11,264	$	11,836
Facility closure and other related costs		1,300			2,682		11,619		12,584
Other restructuring costs		-			302		4,421		4,451
Total Charges	$	1,311		$	3,781	$	27,304	$	28,871

Specialty Products Group ("SPG") Segment:
Severance and benefit costs (d)	$	49		$	461	$	7,391	$	8,494
Facility closure and other related costs		385			1,160		5,326		6,965
Other restructuring costs		-			116		1,238		1,238
Total Charges	$	434		$	1,737	$	13,955	$	16,697

Corporate/Other Segment:
Severance and benefit costs	$	141		$	141	$	13,488	$	13,488
Total Charges	$	141		$	141	$	13,488	$	13,488

Consolidated:
Severance and benefit costs	$	574		$	5,187	$	67,410	$	71,181
Facility closure and other related costs		2,615			6,424		29,351		33,493
Other restructuring costs		(60	)		669		8,451		8,481
Total Charges	$	3,129		$	12,280	$	105,212	$	113,155

(a)	Severance and benefit costs are associated with the elimination of three positions and 24 positions during the three and nine months ended February 28, 2021, respectively.

(b)	Severance and benefit costs are associated with the elimination of 5 position and 55 positions during the three and nine months ended February 28, 2021, respectively.

(c)	Severance and benefit costs for the nine months ended February 28, 2021 are associated with the elimination of three positions partially offset by the adjustment in severance accruals during the period. There were no position eliminations during the three months ended February 28, 2021.

(d)	Severance and benefit costs are associated with the elimination of three positions and 27 positions during the three and nine months ended February 28, 2021, respectively.

	Three Months Ended		Nine Months Ended
(In thousands)	February 29, 2020		February 29, 2020
CPG Segment:
Severance and benefit costs (e)	$	2,018	$	3,625
Facility closure and other related costs		484		1,282
Other restructuring costs		232		271
Total Charges	$	2,734	$	5,178

PCG Segment:
Severance and benefit costs (f)	$	477	$	3,408
Facility closure and other related costs		762		1,507
Other restructuring costs		122		294
Total Charges	$	1,361	$	5,209

Consumer Segment:
Severance and benefit costs (g)	$	445	$	1,992
Facility closure and other related costs		563		1,423
Other restructuring costs		8		8
Total Charges	$	1,016	$	3,423

SPG Segment:
Severance and benefit costs (h)	$	643	$	1,057
Facility closure and other related costs		356		2,546
Other restructuring costs		-		104
Total Charges	$	999	$	3,707

Corporate/Other Segment:
Severance and benefit costs (i)	$	1,233	$	1,249
Total Charges	$	1,233	$	1,249

Consolidated:
Severance and benefit costs	$	4,816	$	11,331
Facility closure and other related costs		2,165		6,758
Other restructuring costs		362		677
Total Charges	$	7,343	$	18,766

(e)	Severance and benefit costs are associated with the elimination of 27 positions and 73 positions during the three and nine months ended February 29, 2020, respectively.

(f)	Severance and benefit costs are associated with the elimination of one position and 70 positions during the three and nine months ended February 29, 2020, respectively.

(g)	Severance and benefit costs are associated with the elimination of five positions and 16 positions during the three and nine months ended February 29, 2020, respectively.

(h)	Severance and benefit costs are associated with the elimination of four positions and 63 positions during the three and nine months ended February 29, 2020, respectively.

(i)	Severance and benefit costs are associated with the elimination of two positions during the three and nine months ended February 29, 2020, respectively.

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

(in thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Restructuring Costs			Total
Balance at November 30, 2020	$	4,655		$	5,896		$	-		$	10,551
Additions charged to expense		574			2,615			(60	)		3,129
Cash payments charged against reserve		(1,699	)		(2,968	)		-			(4,667	)
Non-cash charges and other adjustments		71			(4,292	)		60			(4,161	)
Balance at February 28, 2021	$	3,601		$	1,251		$	-		$	4,852

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Restructuring Costs			Total
Balance at June 1, 2020	$	7,357		$	5,880		$	-			13,237
Additions charged to expense		5,187			6,424			669			12,280
Cash payments charged against reserve		(9,014	)		(6,761	)		(335	)		(16,110	)
Non-cash charges and other adjustments		71			(4,292	)		(334	)		(4,555	)
Balance at February 28, 2021	$	3,601		$	1,251		$	-		$	4,852

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Restructuring Costs			Total
Balance at November 30, 2019	$	3,566		$	6,080		$	-		$	9,646
Additions charged to expense		4,816			2,165			362			7,343
Cash payments charged against reserve		(3,182	)		(2,578	)		-			(5,760	)
Non-cash charges included above		(161	)		-			(362	)		(523	)
Balance at February 29, 2020	$	5,039		$	5,667		$	-		$	10,706

(In thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Restructuring Costs			Total
Balance at June 1, 2019	$	4,837		$	7,857		$	-		$	12,694
Additions charged to expense		11,331			6,758			677			18,766
Cash payments charged against reserve		(10,968	)		(7,928	)		-			(18,896	)
Non-cash charges included above		(161	)		(1,020	)		(677	)		(1,858	)
Balance at February 29, 2020	$	5,039		$	5,667		$	-		$	10,706

In connection with our MAP to Growth, during the three months ended February 28, 2021, we incurred inventory-related charges of approximately $0.9 million at our Consumer segment. During the three months ended February 29, 2020, we incurred inventory-related charges of approximately $0.2 million at our Consumer segment and $0.1 million of inventory-related charges at each of our CPG, PCG and SPG segments, respectively. During the nine months ended February 28, 2021, we incurred inventory-related charges of approximately $1.0 million at our Consumer segment. During the nine months ended February 29, 2020, we incurred approximately $7.4 million, $3.2 million, $0.3 million and $0.1 million of inventory-related charges at our Consumer, PCG, CPG, and SPG segments, respectively. All of the aforementioned inventory-related charges are recorded in cost of sales in our Consolidated Statements of Income. These inventory charges were the result of the exit of a business or product line and SKU rationalization initiatives in connection with our overall plan of restructuring.