Restructuring and Impairment Charges

6 Months Ended

Aug. 31, 2020

Restructuring and Related Activities [Abstract]

As described in Note 10, the Company has been executing a plan to divest certain non-core businesses in the last half of 2020. In the second quarter of 2021, the Company closed on the sale of its Galvabar business within the Metal Coatings segment and the board of directors approved a plan to divest certain other businesses within the Company. We recorded a loss on the sale of our Galvabar business of $1.2 million. The businesses we expect to sell are two businesses in our Infrastructure Solutions segment and two non-operating locations in our Metal Coatings segment. The assets and liabilities of the businesses expected to be disposed of within the next twelve months are classified as held-for-sale in the accompanying consolidated balance sheet. In addition, we expect to close a small number of Metal Coatings locations that were in underperforming and lower growth geographies.

In the second quarter of 2021, we recorded certain earnings charges related to our restructuring activities, which are summarized in the table below:


	Metal Coatings		Infrastructure Solutions		Total
Write down on assets held for sale to estimated sales price	$	3,161	$	4,100	$	7,261
Write down of assets expected to be abandoned	6,965		—		6,965
Loss on sale of subsidiary	1,198		—		1,198
Write down of excess inventory	—		2,511		2,511
Costs associated with assets held for sale	—		758		758
Total charges	$	11,324	$	7,369	$	18,693

Assets Held for Sale

The strategic decision to divest of these businesses reflects the Company's longer term strategy to focus on core businesses within its Metal Coatings and Infrastructure Solutions segments. The historical annual sales, operating profit and net assets of these businesses were not significant enough to qualify as discontinued operations.

Assets and liabilities allocated to the disposal group are as follows:



Assets
Accounts receivable	$	5,917
Inventories	2,882
Contract assets			4,140
Other current assets	141
Property, plant and equipment	5,562
Other assets			1,580
Goodwill	3,955

Liabilities
Accounts payable	1,289
Contract liabilities	1,861
Other accrued liabilities	1,593
Lease liability – long term	1,354
Total carrying value	$		18,080
Less: Impairment of carrying value			7,261
Fair value of disposal group	$	10,819

Infrastructure Solutions Segment

In the second quarter of fiscal year 2021, as a result of the continued market pressures in the oil and gas services market, the Company undertook an evaluation of inventory within the tubular products business. As a result of the evaluation, the Company determined certain inventories to be in excess of their net realizable value, and recorded an inventory write down of $2.5 million to record the inventory at its current fair value.

Metal Coatings Segment

In the second quarter of fiscal year 2021, the Company approved a plan to close certain locations within the Metal Coatings segment in future periods. Management performed an analysis of the assets at each location expected to be closed. For assets that will not be transferred to another location for use in operations, management wrote the assets down to reflect a shortened useful life and lower value to the Company

The Company recognized the following charges to income from operations related to locations expected to be closed:



	Three Months Ended August 31,								Six months ended August 31,
	2020			2019			2020			2019
	(in thousands)
Inventory write down	$	336	$	—	$	336		$	—
Property & equipment write downs		2,999		—		2,999			—
Intangible write down		3,258		—		3,258			—
Other		372				372
Total	$	6,965	$	—	$	6,965		$	—