Restructuring and Impairment Charges

9 Months Ended

Nov. 30, 2020

Restructuring and Related Activities [Abstract]

As described in Note 11, the Company has been executing a plan to divest certain non-core businesses. During the first nine months of fiscal 2021, the Company closed on the sale of its Galvabar business and its Southern Mechanical Services business, and the board of directors approved a plan to divest certain other businesses within the Company. The Company recorded net proceeds of $8.3 million and a loss on the sale of the Galvabar business, which is included in the Metal Coatings segment, of $1.2 million. During the third quarter of fiscal 2021, the Company completed the sale of Southern Mechanical Services, which is included in the Infrastructure Solutions segment, for net proceeds of $4.1 million. The Company recognized impairment charges of $0.9 million for Southern Mechanical Services during the second quarter, and an additional loss on sale of $1.9 million during the third quarter of fiscal 2021. The loss of the sale of these businesses are included in "Restructuring and impairment charges" in the consolidated statements of operations.

As of November 30, 2020, one additional business in the Infrastructure Solutions segment and two non-operating locations in the Metal Coatings segment are classified as held for sale. The assets and liabilities of the businesses expected to be disposed of within the next twelve months are included in "Assets held for sale" in the accompanying consolidated balance sheet. In addition, the Company expects to close a small number of Metal Coatings locations that were in underperforming and lower growth geographies.

During the nine months ended November 30, 2020, the Company recorded certain charges related to its restructuring activities, which are summarized in the table below:


	Nine Months Ended November 30,
`	Metal Coatings		Infrastructure Solutions		Total
Write down on assets held for sale to estimated sales price	$	2,930	$	4,100	$	7,030
Write down of assets expected to be abandoned	6,922		—		6,922
Loss on sale of subsidiaries	1,191		1,859		3,050
Write down of excess inventory	—		2,511		2,511
Costs associated with assets held for sale	—		756		756
Total charges	$	11,043	$	9,226	$	20,269

Assets Held for Sale

The strategic decision to divest of these businesses reflects the Company's longer term strategy to become a more focused metal coatings company. 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:


	As of November 30, 2020
Assets
Accounts receivable	$	1,313
Inventories	1,024
Contract assets	3,303
Other current assets	11
Property, plant and equipment	1,768
Other assets	60
Goodwill	1,693

Liabilities
Accounts payable	365
Contract liabilities	1,086
Other accrued liabilities	1,050
Lease liability – long term	3
Total carrying value	6,668
Less: Impairment of carrying value of remaining assets held for sale to estimated sales price	(3,490)
Fair value of disposal group	$	3,178

Infrastructure Solutions Segment

During the first nine months of fiscal 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 market value.

Metal Coatings Segment

During the first nine months of fiscal 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 decrease in the estimated 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:


	Nine Months Ended November 30, 2020

Inventory write down	$	336
Property & equipment write downs	2,956
Intangible impairment	3,258
Other	372
Total	$	6,922