Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Feb. 29, 2024 | Apr. 03, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 29, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Trading Symbol | WOR | |
Entity Registrant Name | WORTHINGTON ENTERPRISES, INC | |
Entity Central Index Key | 0000108516 | |
Current Fiscal Year End Date | --05-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Incorporation, State or Country Code | OH | |
Entity Shell Company | false | |
Entity File Number | 001-08399 | |
Entity Tax Identification Number | 31-1189815 | |
Entity Address, Address Line One | 200 West Old Wilson Bridge Road | |
Entity Address, City or Town | Columbus | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43085 | |
City Area Code | 614 | |
Local Phone Number | 438-3210 | |
Entity Common Stock, Shares Outstanding | 50,146,357 | |
Title of 12(b) Security | Common Shares, Without Par Value | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 227,310 | $ 422,268 |
Receivables, less allowances of $750 and $803 at Febryary 29, 2024 and May 31, 2023, respectively | 219,389 | 224,863 |
Inventories: | ||
Raw materials | 74,929 | 91,988 |
Work in process | 18,234 | 19,189 |
Finished products | 98,553 | 83,322 |
Total inventories | 191,716 | 194,499 |
Income taxes receivable | 2,398 | 1,681 |
Prepaid expenses and other current assets | 50,298 | 46,301 |
Current assets of discontinued operations | 978,725 | |
Total current assets | 691,111 | 1,868,337 |
Investments in unconsolidated affiliates | 120,707 | 138,041 |
Operating lease assets | 21,285 | 24,686 |
Goodwill | 345,445 | 336,178 |
Other intangible assets, net of accumulated amortization of $82,190 and $73,308 at February 29, 2024 and May 31, 2023, respectively | 226,859 | 230,851 |
Other assets | 30,900 | 14,339 |
Property, plant and equipment: | ||
Land | 12,203 | 12,120 |
Buildings and improvements | 142,522 | 139,514 |
Machinery and equipment | 417,777 | 403,885 |
Construction in progress | 39,260 | 24,779 |
Total property, plant and equipment | 611,762 | 580,298 |
Less: accumulated depreciation | 343,380 | 323,883 |
Total property, plant and equipment, net | 268,382 | 256,415 |
Non-current assets of discontinued operations | 782,071 | |
Total assets | 1,704,689 | 3,650,918 |
Current liabilities: | ||
Accounts payable | 108,660 | 126,743 |
Accrued compensation, contributions to employee benefit plans and related taxes | 47,657 | 46,782 |
Dividends payable | 8,916 | 18,330 |
Other accrued items | 29,697 | 37,801 |
Current operating lease liabilities | 6,555 | 6,682 |
Income taxes payable | 536 | 8,918 |
Current maturities of long-term debt | 267 | 264 |
Current liabilities of discontinued operations | 472,038 | |
Total current liabilities | 202,288 | 717,558 |
Other liabilities | 76,300 | 71,766 |
Distributions in excess of investment in unconsolidated affiliate | 116,775 | 117,297 |
Long-term debt | 297,695 | 689,718 |
Non-current operating lease liabilities | 15,103 | 18,326 |
Deferred income taxes, net | 82,086 | 82,356 |
Non-current liabilities of discontinued operations | 132,269 | |
Total liabilities | 790,247 | 1,829,290 |
Shareholders' equity - controlling interest | 912,096 | 1,696,011 |
Noncontrolling interests | 2,346 | 125,617 |
Total equity | 914,442 | 1,821,628 |
Total liabilities and equity | $ 1,704,689 | $ 3,650,918 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 750 | $ 803 |
Other intangible assets, accumulated amortization | $ 82,190 | $ 73,308 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | ||
Income Statement [Abstract] | |||||
Net sales | [1] | $ 316,755 | $ 346,315 | $ 926,902 | $ 1,049,694 |
Cost of goods sold | 243,643 | 267,344 | 720,882 | 820,266 | |
Gross profit | 73,112 | 78,971 | 206,020 | 229,428 | |
Selling, general and administrative expense | 65,134 | 71,359 | 210,262 | 211,208 | |
Impairment of long-lived assets | 0 | 484 | 0 | 484 | |
Restructuring and other expense (income), net | [1] | 698 | 823 | 704 | (354) |
Separation costs | 2,999 | 2,305 | 12,465 | 3,572 | |
Operating income (loss) | 4,281 | 4,000 | (17,411) | 14,518 | |
Other income (expense): | |||||
Miscellaneous income (expense), net | [1] | (6,995) | 217 | (5,983) | (4,499) |
Loss on extinguishment of debt | (1,534) | ||||
Interest expense, net | (50) | (4,186) | (1,596) | (15,689) | |
Equity in net income of unconsolidated affiliates | [1] | 43,235 | 37,111 | 127,328 | 102,004 |
Earnings before income taxes | 40,471 | 37,142 | 100,804 | 96,334 | |
Income tax expense | 18,471 | 7,391 | 34,041 | 20,709 | |
Net earnings from continuing operations | 22,000 | 29,751 | 66,763 | 75,625 | |
Net earnings from discontinued operations | 20,507 | 83,106 | 59,382 | ||
Net earnings | 22,000 | 50,258 | 149,869 | 135,007 | |
Net earnings attributable to noncontrolling interests | 3,933 | 7,460 | 8,382 | ||
Net earnings attributable to controlling interest | 22,000 | 46,325 | 142,409 | 126,625 | |
Amounts attributable to controlling interest: | |||||
Net earnings from continuing operations | 22,000 | 29,751 | 66,763 | 75,625 | |
Net earnings from discontinued operations | 16,574 | 75,646 | 51,000 | ||
Net earnings attributable to controlling interest | $ 22,000 | $ 46,325 | $ 142,409 | $ 126,625 | |
Earnings per share from continuing operations - basic | $ 0.45 | $ 0.61 | $ 1.36 | $ 1.56 | |
Earnings per share from discontinued operations - basic | 0.34 | 1.54 | 1.05 | ||
Net earnings per share attributable to controlling interest - basic | 0.45 | 0.95 | 2.9 | 2.61 | |
Earnings per share from continuing operations - diluted | 0.44 | 0.6 | 1.33 | 1.53 | |
Earnings per share from discontinued operations - diluted | 0.34 | 1.5 | 1.04 | ||
Net earnings per share attributable to controlling interest - diluted | $ 0.44 | $ 0.94 | $ 2.83 | $ 2.57 | |
Weighted average common shares outstanding - basic | 49,315 | 48,587 | 49,113 | 48,541 | |
Weighted average common shares outstanding - diluted | 50,417 | 49,493 | 50,271 | 49,356 | |
Cash dividends declared per common share | $ 0.16 | $ 0.31 | $ 0.8 | $ 0.93 | |
[1] A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 22,000 | $ 50,258 | $ 149,869 | $ 135,007 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation | (700) | 1,563 | 1,643 | (7,680) |
Pension liability adjustment | 6,805 | 323 | 6,802 | 3,180 |
Cash flow hedges | 218 | 34,342 | 6,916 | 17,042 |
Other comprehensive income (loss) | 6,323 | 36,228 | 15,361 | 12,542 |
Comprehensive income | 28,323 | 86,486 | 165,230 | 147,549 |
Comprehensive income attributable to noncontrolling interests | 3,933 | 7,460 | 8,382 | |
Comprehensive income attributable to controlling interest | $ 28,323 | $ 82,553 | $ 157,770 | $ 139,167 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | ||
Operating activities: | |||||
Net earnings | $ 22,000 | $ 50,258 | $ 149,869 | $ 135,007 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||
Depreciation and amortization | 11,949 | 28,153 | 68,281 | 84,508 | |
Impairment of long-lived assets | 484 | 1,401 | 796 | ||
Provision for (benefit from) deferred income taxes | 4,329 | (5,525) | 843 | (20,198) | |
Loss on extinguishment of debt | 1,534 | ||||
Bad debt expense (income) | 24 | 2,346 | (430) | 3,786 | |
Equity in net income of unconsolidated affiliates, net of distributions | (2,926) | 23,218 | 3,169 | 84,415 | |
Net loss (gain) on sale of assets | (14) | 46 | (348) | (4,988) | |
Stock-based compensation | 2,602 | 4,975 | 13,294 | 13,758 | |
Changes in assets and liabilities, net of impact of acquisitions: | |||||
Receivables | (18,124) | 3,382 | 49,737 | 160,475 | |
Inventories | 16,176 | 53,499 | 54,999 | 166,959 | |
Accounts payable | 15,561 | 6,627 | (59,534) | (195,489) | |
Accrued compensation and employee benefits | 7,190 | (2,900) | (2,030) | (33,432) | |
Income taxes payable | (725) | (7,691) | (300) | ||
Other operating items, net | (7,921) | 17,588 | (28,288) | 833 | |
Net cash provided by operating activities | 50,121 | 182,151 | 244,806 | 396,130 | |
Investing activities: | |||||
Investment in property, plant and equipment | (10,017) | (22,748) | (72,191) | (68,715) | |
Acquisitions, net of cash acquired | (8,707) | (29,721) | (56,088) | ||
Proceeds from sale of assets, net of selling costs | 35 | 51 | 837 | 35,545 | |
Investment in note receivable | 100 | (14,900) | |||
Investment in non-marketable equity securities | (75) | (20) | (1,614) | (270) | |
Net proceeds from sale of investment in ArtiFlex | (300) | 35,795 | |||
Excess distributions from unconsolidated affiliate | 1,085 | ||||
Net cash used by investing activities | (18,664) | (23,017) | (116,504) | (53,733) | |
Financing activities: | |||||
Dividend from Worthington Steel at Separation | 150,000 | 150,000 | |||
Distribution to Worthington Steel at Separation | (218,048) | (218,048) | |||
Net proceeds from (repayments of) short-term borrowings | [1] | (1,330) | 172,187 | (44,392) | |
Principal payments on long-term obligations | (150,133) | (5,759) | (393,890) | (5,909) | |
Proceeds from issuance of common shares, net of tax withholdings | (1,023) | 704 | (15,360) | (3,411) | |
Payments to noncontrolling interests | (1,920) | (11,760) | |||
Dividends paid | (15,849) | (15,101) | (48,907) | (44,166) | |
Net cash used by financing activities | (235,053) | (21,486) | (355,938) | (109,638) | |
Increase (decrease) in cash and cash equivalents | (203,596) | 137,648 | (227,636) | 232,759 | |
Cash and cash equivalents at beginning of period | 430,906 | 129,596 | 454,946 | 34,485 | |
Cash and cash equivalents at end of period | $ 227,310 | $ 267,244 | $ 227,310 | $ 267,244 | |
[1] Net proceeds in the nine months ended February 29, 2024 consisted of borrowings under short-term credit facilities assumed by Worthington Steel in conjunction with the Separation. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 22,000 | $ 46,325 | $ 142,409 | $ 126,625 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Feb. 29, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 29, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note A – Basis of Presentation Basis of Presentation These interim unaudited consolidated financial statements include the accounts of Worthington Enterprises and its consolidated subsidiaries. Significant intercompany accounts and transactions have been eliminated. Prior to the Separation, we owned controlling interests in the following four joint ventures: Spartan ( 52 %); TWB ( 55 %); Samuel ( 63 %); and WSP ( 51 %). These joint ventures were consolidated with the equity owned by the other joint venture members and shown as noncontrolling interests in our consolidated balance sheet at May 31, 2023, and their portions of net earnings and OCI are shown as net earnings from discontinued operations or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively. As of the Separation, Spartan, TWB, Samuel and WSP became joint ventures of Worthington Steel and are no longer reported in our current results. On February 1, 2024, we acquired an 80 % controlling interest in Halo. See further discussion of Halo in “Note P – Acquisitions.” Investments in unconsolidated affiliates that we do not control are accounted for using the equity method with our proportionate share of income or loss recognized within Equity Income in our consolidated statements of earnings. See further discussion of our unconsolidated affiliates in “Note D – Investments in Unconsolidated Affiliates.” These interim unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal and recurring nature except those which have been disclosed elsewhere in this Form 10-Q, necessary for a fair presentation of the consolidated financial statements for these interim periods, have been included. Operating results for the three and nine months ended February 29, 2024 are not necessarily indicative of the results that may be expected for fiscal 2024. For further information, refer to the consolidated financial statements and notes thereto included in our 2023 Form 10-K. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Revenue Recognition We recognize all revenue at the point in time the performance obligation is satisfied and control of the product is transferred to the customer upon shipment or delivery. There were no contract assets or unbilled receivables at February 29, 2024. Unbilled receivables of $ 3,708 at May 31, 2023 were attributed to Worthington Steel and recorded in current assets of discontinued operations on the consolidated balance sheet. The Separation of Worthington Steel On December 1, 2023, we completed the previously announced Separation of our Steel Processing business segment into a separate public company in a transaction intended to qualify as tax free to our shareholders, which was accomplished via the distribution of 100 % of the outstanding common shares of Worthington Steel to holders of record of the Company’s common shares as of the close of business on November 21, 2023. Each holder of record received one share of Worthington Steel for every one share of the Company’s common stock held on the Record Date for the Distribution. Worthington Steel is an independent public company trading under the symbol “WS” on the NYSE. In connection with the Separation, we entered into several agreements with Worthington Steel, effective November 30, 2023, that, among other things, provide a framework for our relationship with Worthington Steel after the Separation, including a long-term Steel Supply Agreement, a Trademark License Agreement, and Transition Services Agreement. Pursuant to the long-term Steel Supply Agreement, Worthington Steel manufactures and supplies to us, at reasonable market rates, certain flat rolled steel products, and will provide us with certain related support services such as design, engineering/technical services, price risk management, scrap management, steel purchasing, supply chain optimization and product rework services, and other services at our request that are ancillary to the supply of the flat rolled steel products. Purchases from Worthington Steel under this agreement for the three and nine months ended February 29, 2024, totaled $ 20,274 , of which $ 10,702 was payable at February 29, 2024. We have incurred direct and incremental costs associated with the Separation, including approximately $ 30,986 and $ 15,593 during the nine months ended February 29, 2024, and February 28, 2023, respectively, of which $ 18,521 and $ 12,021 have been attributed to discontinued operations. These costs consisted primarily of third-party advisory fees and certain non-recurring employee-related costs and, to the extent not attributed to Worthington Steel, are presented as a separate component of operating expense in our consolidated statements of earnings and held at the corporate level. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Feb. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note B - Discontinued Operations The following table summarizes the assets and liabilities from discontinued operations at May 31, 2023: Assets Current assets: Cash and cash equivalents $ 32,678 Receivables, less allowances of $ 2,581 468,024 Inventories: Raw materials 172,580 Work in process 164,059 Finished products 76,830 Total inventories 413,469 Income taxes receivable 2,517 Prepaid expenses and other current assets 58,656 Assets held for sale 3,381 Total current assets 978,725 Investments in unconsolidated affiliates 114,550 Operating lease assets 75,281 Goodwill 78,642 Other intangible assets, net of accumulated amortization of $ 38,894 83,375 Other assets 10,984 Property, plant and equipment: Land 37,577 Buildings and improvements 169,155 Machinery and equipment 860,077 Construction in progress 20,386 Total property, plant and equipment 1,087,195 Less: accumulated depreciation 667,956 Total property, plant and equipment, net 419,239 Total assets $ 1,760,796 Liabilities Current liabilities: Accounts payable $ 402,177 Short-term borrowings 2,813 Accrued compensation, contributions to employee benefit plans and related taxes 47,028 Other accrued items 14,094 Current operating lease liabilities 5,926 Total current liabilities 472,038 Other liabilities 41,520 Noncurrent operating lease liabilities 71,656 Deferred income taxes, net 19,093 Total liabilities $ 604,307 The following table summarizes the financial results from the discontinued operations of Worthington Steel for the periods presented. There were no discontinued operations for the three months ended February 29, 2024. Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Net sales $ - $ 757,007 $ 1,670,027 $ 2,637,834 Cost of goods sold - 692,171 1,481,731 2,448,319 Gross profit - 64,836 188,296 189,515 Selling, general and administrative expense - 34,698 74,908 106,110 Impairment of long-lived assets - - 1,401 312 Restructuring and other expense (income) - 1 - ( 4,204 ) Separation costs - 4,042 18,521 12,021 Operating income - 26,095 93,466 75,276 Other income (expense): Miscellaneous income, net - 1,110 1,016 2,146 Interest expense, net - ( 1,849 ) ( 3,706 ) ( 6,557 ) Equity in net income of unconsolidated affiliate - ( 185 ) 12,735 3,491 Earnings before income taxes - 25,171 103,511 74,356 Income tax expense - 4,664 20,405 14,974 Net earnings - 20,507 83,106 59,382 Net earnings attributable to noncontrolling interest - 3,933 7,460 8,382 Net earnings attributable to controlling interest $ - $ 16,574 $ 75,646 $ 51,000 As permitted under GAAP, the cash flows related to discontinued operations have not been segregated in our consolidated statements of cash flows. Accordingly, the consolidated statements of cash flows include the results from both continuing and discontinued operations and amounts for certain captions will not agree with respective data in the consolidated balance sheet. We did not report any cash flows from discontinued operations during the three months ended February 29, 2024. The following table summarizes significant non-cash operating items and capital expenditures of discontinued operations included in the consolidated statements of cash flows for the periods presented. There were no discontinued operations for the three months ended February 29, 2024. Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Significant non-cash operating items: Depreciation and amortization $ - $ 16,260 $ 32,043 $ 50,306 Impairment of long-lived assets - - 1,401 312 Equity in income of unconsolidated affiliate - 10,185 ( 12,734 ) 6,509 Net loss (gain) on sale of assets - 46 ( 412 ) ( 3,778 ) Stock-based compensation - 1,211 3,472 3,340 Significant investing activities: Investment in property, plant and equipment - ( 10,809 ) ( 33,457 ) ( 36,450 ) Acquisitions, net of cash acquired - - ( 21,013 ) - Significant financing activities: Net proceeds from short-term borrowings - - 172,187 - |
Inventory
Inventory | 9 Months Ended |
Feb. 29, 2024 | |
Inventory Disclosure [Abstract] | |
Inventory | Note C - Inventory During the third quarter of fiscal 2024, we recognized lower of cost or net realizable charges totaling approximately $ 1,900 related to propane tanks imported from Europe that had higher than expected transportation costs. These charges were attributed to our Building Products operating segment and were recorded in cost of goods sold in the consolidated statement of earnings during the third quarter of fiscal 2024. During the second quarter of fiscal 2024, we initiated a recall with the U.S. Consumer Protection Safety Commission for our recently introduced Balloon Time® mini helium tank. We have reserved for the estimated direct and incremental costs expected to be incurred to administer the recall program, which we expect to be immaterial due to the small population of tanks purchased by end consumers. However, we booked a reserve of approximately $ 3,000 to reflect the impacted inventory at its estimated net realizable value. The adjustment was attributed to our Consumer Products operating segment and was recorded in cost of goods sold in the consolidated statement of earnings during the second quarter of fiscal 2024. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 9 Months Ended |
Feb. 29, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Affiliates | Note D – Investments in Unconsolidated Affiliates Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method and included the following at February 29, 2024: ClarkDietrich ( 25 %); WAVE ( 50 %); and Workhorse ( 20 %). We held a 50 % non-controlling interest in Serviacero prior to the Separation. Equity Income and the related investment have been presented as discontinued operations for all periods presented. We also held a 50 % noncontrolling equity interest in ArtiFlex, through August 3, 2022, when it was purchased by the unrelated joint venture partner. In connection with this transaction, we received net cash proceeds of approximately $ 35,795 and realized a pre-tax loss of $ 16,059 within Equity Income, representing the amount by which the book value of our investment exceeded the net cash proceeds. During the second quarter of fiscal 2024, we recognized a pre-tax gain of $ 2,780 within Equity Income in connection with the sale of Workhorse’s operations in Brazil. We received distributions from unconsolidated affiliates totaling $ 144,317 during the nine months ended February 29, 2024. We have received cumulative distributions from WAVE in excess of our investment balance amounting to $ 116,775 and $ 117,297 , respectively, at February 29, 2024 and May 31, 2023, which are presented separately within long-term liabilities in our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if the investment balance becomes positive, it will be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any negative investment balance classified as a liability as income immediately. We use the “cumulative earnings” approach for determining cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities, unless the cumulative distributions exceed our portion of the cumulative equity in the net earnings of the joint venture, in which case the “excess” distributions are deemed to be returns of the investment and are classified as investing activities in our consolidated statements of cash flows. During the nine months ended February 29, 2024, we classified $ 1,085 of “excess” dividends received from WAVE as an investing activity. The following tables summarize combined financial information for our unconsolidated affiliates included in continuing operations as of the dates, and for the periods presented: February 29, May 31, (In thousands) 2024 2023 Cash and cash equivalents $ 86,533 $ 36,988 Other current assets 574,099 661,700 Non-current assets 324,793 335,567 Total assets $ 985,425 $ 1,034,255 Current liabilities 312,235 176,959 Current maturities of long-term debt 20,500 36,936 Long-term debt 349,377 349,215 Other non-current liabilities 137,275 139,228 Equity 166,038 331,917 Total liabilities and equity $ 985,425 $ 1,034,255 Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands) 2024 2023 2024 2023 Net sales $ 497,938 $ 511,663 $ 1,579,992 $ 1,727,225 Gross profit 171,497 154,980 492,812 467,664 Operating income 126,377 115,286 376,782 349,925 Depreciation and amortization 6,936 5,662 21,737 18,559 Interest expense 4,943 4,476 15,220 10,920 Income tax expense 549 791 1,900 1,604 Net earnings 119,982 111,505 360,748 342,574 |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 9 Months Ended |
Feb. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Long-Lived Assets | Note E – Impairment of Long-Lived Assets During the third quarter of fiscal 2023, we determined that certain assets associated with a capital project at our Building Products facility in Jefferson, Ohio, were impaired. These assets were determined to have no alternative use and were written down to their estimated salvage value of approximately $ 70 resulting in an impairment charge of $ 484 during the three months ended February 28, 2023. Our Sustainable Energy Solutions business continues to operate in a challenging market, driven by continued weakness in overall economic conditions in Europe as well as slow adoption of hydrogen and CNG transportation applications. Management continues to focus on near term cost controls while making investments necessary to maintain its position as a global solutions provider with the scale and expertise to effectively serve the emerging sustainability economy worldwide. We believe the overall long-term outlook for the business is positive and project sufficient future cash flows to support the current carrying value of the business. However, it is at least reasonably possible that continued lower-than-expected volumes and financial results, or a decision to explore strategic alternatives, could change our determination that the assets are not impaired. |
Restructuring and Other Income,
Restructuring and Other Income, Net | 9 Months Ended |
Feb. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Income, Net | Note F – Restructuring and Other Expense, Net We consider restructuring activities to be programs whereby we fundamentally change our operations, such as divestitures, closing or consolidating facilities, employee severance (including rationalizing headcount or other significant changes in personnel), and realignment of existing operations (including changes to management structure in response to underlying performance and/or changing market conditions). A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption, in our consolidated statement of earnings for the nine months ended February 28, 2024 is summarized below: (In thousands) Balance, as of May 31, 2023 Expense Payments Balance, as of February 29, 2024 Early retirement and severance $ 135 $ 704 $ ( 253 ) $ 586 The total liability associated with our restructuring activities as of February 29, 2024 is expected to be paid in the next 12 months. |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments | 9 Months Ended |
Feb. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities and Commitments | Note G – Contingent Liabilities and Commitment s Legal Proceedings 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 also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations. |
Guarantees
Guarantees | 9 Months Ended |
Feb. 29, 2024 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees | Note H – Guarantees We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. However, at February 29, 2024, we were party to an operating lease for an aircraft in which we have guaranteed a residual value at the termination of the lease on March 30, 2028. The maximum obligation under the terms of this guarantee was approximately $ 15,796 at February 29, 2024. Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to this guarantee is not probable and, therefore, no amount has been recognized in our consolidated financial statements. At February 29, 2024, we also had in place $ 12,137 of outstand ing stand-by letters of credit issued to third-party service providers. The fair value of these guaranteed instruments, based on premiums paid, was not material and no amounts were drawn against them at February 29, 2024. |
Debt and Receivables Securitiza
Debt and Receivables Securitization | 9 Months Ended |
Feb. 29, 2024 | |
Debt Disclosure [Abstract] | |
Debt and Receivables Securitization | Note I – Debt and Receivables Securitization The following table summarizes our long-term debt outstanding at February 29, 2024 and May 31, 2023: February 29, May 31, (In thousands) 2024 2023 2024 Notes - 150,000 2026 Notes - 243,623 4.30 % senior notes due August 1, 2032 200,000 200,000 2.06 % Series A senior note due August 23, 2031 39,654 39,226 2.40 % Series B senior notes due August 23, 2034 59,427 58,786 Other 267 528 Total debt 299,348 692,163 Unamortized discount and debt issuance costs ( 1,386 ) ( 2,181 ) Total debt, net 297,962 689,982 Less: current maturities and short-term borrowings 267 264 Total long-term debt $ 297,695 $ 689,718 Maturities of long-term debt are as follows: (In thousands) 2025 $ 267 2026 - 2027 - 2028 - 2029 - Thereafter 299,081 Total $ 299,348 Long-Term Debt On April 15, 2014, we issued the 2026 Notes. During fiscal 2023, we purchased approximately $ 6,377 of the principal amount of the 2026 Notes in open market transactions, leaving $ 243,623 within long-term debt at May 31, 2023. On June 29, 2023, we notified the trustee under the indenture to which the 2026 Notes are subject that we had elected to redeem in full the 2026 Notes. On July 28, 2023, we redeemed, in full, the 2026 Notes at a price that approximated the par value of the debt of $ 243,623 . In connection with the debt redemption, we recognized a non-cash loss of $ 1,534 related primarily to unamortized debt issuance costs and amounts deferred in AOCI associated with an interest rate swap executed prior to the issuance of the 2026 Notes. Other Financing Arrangements On September 27, 2023, we amended and restated the Credit Facility, extending the final maturity from August 20, 2026 to September 27, 2028 , while keeping in place the $ 500,000 aggregate commitments under the Credit Facility. Borrowings under the Credit Facility have maturities of up to one year . We have the option to borrow at rates equal to an applicable margin over the Simple SOFR, the Prime Rate of PNC Bank, National Association or the Overnight Bank Funding Rate. The applicable margin is determined by our Total Leverage Ratio. There were no b orrowings outstanding under the Credit Facility at February 29, 2024, leaving $ 500,000 available for use. On May 19, 2022, we entered into the five-year AR Facility that allowed for short-term borrowings of up to $ 175,000 through the factoring and subsequent sale, on a revolving basis, of eligible accounts receivable of certain of our subsidiaries to Worthington Receivables Company, LLC, a wholly-owned, consolidated, bankruptcy-remote indirect subsidiary. On June 29, 2023, we elected to terminate the AR Facility. No early termination or other similar fees or penalties were paid in connection with the termination. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Feb. 29, 2024 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Note J – Other Comprehensive Income (Loss) The following table summarizes the tax effects on each component of OCI for the periods presented: Three Months Ended February 29, 2024 February 28, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Foreign currency translation $ ( 615 ) $ ( 85 ) $ ( 700 ) $ 1,421 $ 142 $ 1,563 Pension liability adjustment 8,927 ( 2,122 ) 6,805 415 ( 92 ) 323 Cash flow hedges 564 ( 346 ) 218 43,963 ( 9,621 ) 34,342 Other comprehensive income (loss) $ 8,876 $ ( 2,553 ) $ 6,323 $ 45,799 $ ( 9,571 ) $ 36,228 Nine Months Ended February 29, 2024 February 28, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Foreign currency translation $ 1,555 $ 88 $ 1,643 $ ( 7,549 ) $ ( 131 ) $ ( 7,680 ) Pension liability adjustment 8,927 ( 2,125 ) 6,802 4,155 ( 975 ) 3,180 Cash flow hedges 9,140 ( 2,224 ) 6,916 21,201 ( 4,159 ) 17,042 Other comprehensive income (loss) $ 19,622 $ ( 4,261 ) $ 15,361 $ 17,807 $ ( 5,265 ) $ 12,542 |
Changes in Equity
Changes in Equity | 9 Months Ended |
Feb. 29, 2024 | |
Equity [Abstract] | |
Changes in Equity | Note K – Changes in Equity The following tables summarize the changes in equity by component and in total for the periods presented: Controlling Interest Additional Non- Paid-in AOCI, Retained controlling (In thousands) Capital Net of Tax Earnings Subtotal Interests Total Balance at May 31, 2023 $ 290,799 $ ( 23,179 ) $ 1,428,391 $ 1,696,011 $ 125,617 $ 1,821,628 Net earnings - - 96,106 96,106 3,597 99,703 Other comprehensive loss - ( 5,408 ) - ( 5,408 ) - ( 5,408 ) Common shares issued, net of withholding tax ( 5,130 ) - - ( 5,130 ) - ( 5,130 ) Common shares in non-qualified plans 130 - - 130 - 130 Stock-based compensation 8,995 - - 8,995 - 8,995 Cash dividends declared - - ( 16,081 ) ( 16,081 ) - ( 16,081 ) Dividends to noncontrolling interests - - - - ( 1,921 ) ( 1,921 ) Balance at August 31, 2023 $ 294,794 $ ( 28,587 ) $ 1,508,416 $ 1,774,623 $ 127,293 $ 1,901,916 Net earnings - - 24,302 24,302 3,865 28,167 Other comprehensive income - 14,446 - 14,446 - 14,446 Common shares issued, net of withholding tax ( 9,207 ) - - ( 9,207 ) - ( 9,207 ) Common shares in non-qualified plans 195 - - 195 - 195 Stock-based compensation 4,511 - - 4,511 - 4,511 Cash dividends declared - - ( 16,061 ) ( 16,061 ) - ( 16,061 ) Dividends to noncontrolling interests - - - - - - Balance at November 30, 2023 $ 290,293 $ ( 14,141 ) $ 1,516,657 $ 1,792,809 $ 131,158 $ 1,923,967 Net earnings - - 22,000 22,000 - 22,000 Other comprehensive income - 6,323 - 6,323 - 6,323 Common shares issued, net of withholding tax ( 1,023 ) - - ( 1,023 ) - ( 1,023 ) Common shares in non-qualified plans 53 - - 53 - 53 Stock-based compensation 2,071 - - 2,071 - 2,071 Separation of Worthington Steel - ( 717 ) ( 901,370 ) ( 902,087 ) ( 128,812 ) ( 1,030,899 ) Cash dividends declared - - ( 8,050 ) ( 8,050 ) - ( 8,050 ) Balance at February 29, 2024 $ 291,394 $ ( 8,535 ) $ 629,237 $ 912,096 $ 2,346 $ 914,442 Controlling Interest Additional Non- Paid-in AOCI, Retained controlling (In thousands) Capital Net of Tax Earnings Subtotal Interests Total Balance at May 31, 2022 $ 273,439 $ ( 22,850 ) $ 1,230,163 $ 1,480,752 $ 133,210 $ 1,613,962 Net earnings - - 64,082 64,082 1,162 65,244 Other comprehensive loss - ( 20,462 ) - ( 20,462 ) - ( 20,462 ) Common shares issued, net of withholding tax ( 3,466 ) - - ( 3,466 ) - ( 3,466 ) Common shares in non-qualified plans 136 - - 136 - 136 Stock-based compensation 6,976 - - 6,976 - 6,976 Cash dividends declared - - ( 15,418 ) ( 15,418 ) - ( 15,418 ) Balance at August 31, 2022 $ 277,085 $ ( 43,312 ) $ 1,278,827 $ 1,512,600 $ 134,372 $ 1,646,972 Net earnings - - 16,218 16,218 3,287 19,505 Other comprehensive loss - ( 3,224 ) - ( 3,224 ) - ( 3,224 ) Common shares issued, net of withholding tax ( 649 ) - - ( 649 ) - ( 649 ) Common shares in non-qualified plans 298 - - 298 - 298 Stock-based compensation 3,620 - - 3,620 - 3,620 Cash dividends declared - - ( 15,470 ) ( 15,470 ) - ( 15,470 ) Dividends to noncontrolling interests - - - - ( 11,760 ) ( 11,760 ) Balance at November 30, 2022 $ 280,354 $ ( 46,536 ) $ 1,279,575 $ 1,513,393 $ 125,899 $ 1,639,292 Net earnings - - 46,325 46,325 3,933 50,258 Other comprehensive income - 36,228 - 36,228 - 36,228 Common shares issued, net of withholding tax 704 - - 704 - 704 Common shares in non-qualified plans 107 - - 107 - 107 Stock-based compensation 3,818 - - 3,818 - 3,818 Cash dividends declared - - ( 15,149 ) ( 15,149 ) - ( 15,149 ) Balance at February 28, 2023 $ 284,983 $ ( 10,308 ) $ 1,310,751 $ 1,585,426 $ 129,832 $ 1,715,258 The following table summarizes the changes in AOCI for the periods presented: Foreign Pension Currency Liability Cash Flow (In thousands) Translation Adjustment Hedges AOCI Balance at May 31, 2023 $ ( 22,123 ) $ ( 1,730 ) $ 674 $ ( 23,179 ) Other comprehensive income before reclassifications 1,555 60 14,893 16,508 Reclassification adjustments to net earnings (a)(b) - 8,867 ( 5,753 ) 3,114 Income tax effect 88 ( 2,125 ) ( 2,224 ) ( 4,261 ) Separation of Worthington Steel 10,874 ( 5,984 ) ( 5,607 ) ( 717 ) Balance at February 29, 2024 $ ( 9,606 ) $ ( 912 ) $ 1,983 $ ( 8,535 ) Foreign Pension Currency Liability Cash Flow (In thousands) Translation Adjustment Hedges AOCI Balance at May 31, 2022 $ ( 15,310 ) $ ( 6,244 ) $ ( 1,296 ) $ ( 22,850 ) Other comprehensive loss before reclassifications ( 7,549 ) ( 619 ) ( 2,999 ) ( 11,167 ) Reclassification adjustments to net earnings (a)(b) - 4,774 24,200 28,974 Income tax effect ( 131 ) ( 975 ) ( 4,159 ) ( 5,265 ) Balance at February 28, 2023 $ ( 22,990 ) $ ( 3,064 ) $ 15,746 $ ( 10,308 ) The consolidated statement of earnings classification of amounts reclassified to net income include: (a) Cash flow hedges – Disclosure of reclassification adjustments classified within continuing operations is provided in “Note Q – Derivative Financial Instruments and Hedging Activities.” The residual amount relates to Worthington Steel and has been presented within discontinued operations. (b) Pension liability adjustment – Reflects the acceleration of deferred pension costs in AOCI related to separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Feb. 29, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note L – Stock-Based Compensation The Separation of the Steel Processing Business In connection with the Separation, we adjusted our outstanding share-based awards in accordance with the terms of the Employee Matters Agreement. Adjustments to the underlying shares and terms of outstanding non-qualified stock options, services-based restricted common shares, and performance share awards were made to preserve the intrinsic value of the awards immediately before the Separation. The adjustment of the underlying shares and exercise prices, as applicable, was determined using a ratio based on the relative values of our pre-Distribution common share price and our post-Distribution common share price. Non-Qualified Stock Options The table below summarizes our stock option activity during the nine months ended February 29, 2024: Weighted Average Stock Exercise (In thousands, except per common share amounts) Options Price Outstanding - June 1, 2023 573 $ 42.61 Converted to Worthington Steel common shares (1) ( 61 ) 51.44 Separation related adjustment 254 - Granted 58 68.68 Exercised ( 126 ) 39.73 Forfeited ( 7 ) 45.91 Outstanding - February 29, 2024 691 $ 28.83 (1) Effective as of the Distribution, each outstanding stock option held by a then-current or former employee or service provider of Worthington Steel was converted into a stock option denominated in the common shares of Worthington Steel. During the nine months ended February 29, 2024, we granted non-qualified stock options covering a total of 58 common shares under our stock-based compensation plans. For each grant, the exercise price was equal to the closing market price of the underlying common shares at the respective grant date. The weighted average fair value of these non-qualified stock options, based on the Black-Scholes option-pricing model, calculated at the grant date, was $ 25.61 per share. The calculated pre-tax stock-based compensation expense for these non-qualified stock options was $ 1,485 and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures. The weighted average fair value of stock options granted during the nine months ended February 29, 2024 was based on the following assumptions: Dividend yield 2.34 % Expected volatility 42.62 % Risk-free interest rate 4.04 % Expected term (years) 6.0 Expected volatility is based on the historical volatility of the common shares and the risk-free interest rate is based on the U.S. Treasury strip rate for the expected term of the non-qualified stock options. The expected term was developed using historical exercise experience. Service-Based Restricted Common Shares During the nine months ended February 29, 2024, we granted an aggregate of 214 service-based restricted common shares under our stock-based compensation plans, which cliff vest three years from the grant date. The fair value of these restricted common shares was equal to the weighted average closing market price of the underlying common shares on the grant date, or $ 64.57 per share. The calculated pre-tax stock-based compensation expense for these restricted common shares was $ 13,831 and will be recognized on a straight-line basis over the three-year vesting period, net of any forfeitures. The table below sets forth the service-based restricted common shares for the nine months ended February 29, 2024: Weighted Restricted Average Common Grant Date (In thousands, except per common share amounts) Shares Fair Value Outstanding - June 1, 2023 800 $ 47.39 Converted to Worthington Steel common shares (1) ( 296 ) 55.70 Separation related adjustment 220 - Granted 214 64.57 Vested ( 337 ) 39.17 Forfeited ( 20 ) 47.07 Outstanding - February 29, 2024 581 $ 36.34 (1) Effective as of the Distribution, each restricted stock award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel common shares. Performance Share Awards We have awarded performance shares to certain key employees under our stock-based compensation plans. These performance shares are earned based on the level of achievement with respect to corporate targets for cumulative corporate economic value added, EPS growth and, in the case of business unit executives, a business unit adjusted EBITDA target, in each case for the three-year periods ending May 31, 2024, 2025 and 2026. These performance share awards will be paid, to the extent earned, in common shares in the fiscal quarter following the end of the applicable three-year performance period. The fair values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued. The ultimate pre-tax stock-based compensation expense to be recognized over the three-year performance period on all tranches will vary based on our periodic assessment of the probability of the targets being achieved. The table summarizes our performance activity for the nine months ended February 29, 2024. Weighted Restricted Average Common Grant Date (In thousands, except per common share amounts) Shares Fair Value Outstanding - June 1, 2023 172 $ 46.37 Converted to Worthington Steel common shares (1) ( 39 ) 56.99 Separation related adjustment 58 - Granted 113 52.73 Vested ( 131 ) 39.93 Forfeited ( 25 ) 36.02 Outstanding - February 29, 2024 148 $ 37.70 (1) Effective as of the Distribution, each performance share award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel shares. |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 29, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note M – Income Taxes Income tax expense for the nine months ended February 29, 2024 and February 28, 2023 reflected estimated annual effective income tax rates of 30.8 % and 22.6 %, respectively. Income tax expense in the current year period was impacted by certain discrete tax items triggered by the Separation, which were primarily non-deductible transaction costs. Our actual effective income tax rate for fiscal 2024 could be materially different from the forecasted rate as of February 29, 2024. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Feb. 29, 2024 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note N – Earnings per Share The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented: Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands, except per common share amounts) 2024 2023 2024 2023 Numerator (basic & diluted): Net earnings from continuing operations $ 22,000 $ 29,751 $ 66,763 $ 75,625 Denominator: Denominator for basic EPS from continuing operations - Weighted average common shares 49,315 48,587 49,113 48,541 Effect of dilutive securities 1,102 906 1,158 815 Denominator for diluted EPS from continuing operations - Weighted average common shares 50,417 49,493 50,271 49,356 Basic EPS from continuing operations $ 0.45 $ 0.61 $ 1.36 $ 1.56 Diluted EPS from continuing operations $ 0.44 $ 0.60 $ 1.33 $ 1.53 Stock options covering an aggregate of 55 and 94 common shares for the three months ended February 29, 2024 and February 28, 2023, respectively, and 61 and 89 common shares for the nine months ended February 29, 2024 and February 28, 2023, respectively, have been excluded from the computation of diluted EPS because the effect would have been anti-dilutive for those periods. |
Segment Operations
Segment Operations | 9 Months Ended |
Feb. 29, 2024 | |
Segment Reporting [Abstract] | |
Segment Operations | Note O – Segment Operations Our operations are managed principally on a products and services basis. Factors used to identify reportable segments include the nature of the products and services provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative accounting guidance. Our operations are organized under three operating segments: Consumer Products, Building Products, and Sustainable Energy Solutions, none of which are aggregated for segment reporting purposes. In prior quarters, we also presented an additional operating segment, Steel Processing, which is no longer a reportable segment as a result of the Separation. The related segment disclosures herein have been updated accordingly, including recasting prior period information to reflect the Steel Processing business as discontinued operations. Segment information is prepared on the same basis that our CODM reviews financial information for operational decision-making purposes. We have identified our Chief Executive Officer as our CODM. Factors used to identify operating segments include the nature of the products and services provided by each business, the management reporting structure, the similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative accounting guidance. In connection with the Separation, our CODM began evaluating segment operating performance on the basis of adjusted EBITDA, as previously described in the “Use of Non-GAAP Financial Measures and Definitions” section preceding Part I, Item 1 of this Form 10-Q. At the operating segment level, adjusted EBITDA excludes public company and other governance-related costs. Effective December 1, 2023, we also realigned management responsibilities and the internal reporting of our liquified petroleum gas propane tank manufacturing facility in Westerville, Ohio, to fall under our Building Products segment (from Consumer Products). Previously reported results have been recast to reflect these changes. The following tables presents summarized financial information for our reportable segments for the periods indicated. Three Months Ended February 29, 2024 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 133,181 $ 148,190 $ 35,384 $ - $ 316,755 Restructuring and other expense, net - 84 - 614 698 Separation costs - - - 2,999 2,999 Miscellaneous income (expense), net 12 154 328 ( 7,489 ) ( 6,995 ) Equity Income - 43,813 - ( 578 ) 43,235 Adjusted EBITDA (1) 25,649 53,059 ( 2,667 ) ( 9,170 ) 66,871 Three Months Ended February 28, 2023 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 130,684 $ 183,839 $ 31,792 $ - $ 346,315 Impairment of long-lived assets - 484 - - 484 Restructuring and other expense, net 206 617 - - 823 Separation costs - - - 2,305 2,305 Miscellaneous income (expense), net ( 12 ) 122 ( 37 ) 144 217 Equity Income - 37,836 - ( 725 ) 37,111 Adjusted EBITDA (2)(4) 21,100 58,097 212 ( 9,193 ) 70,216 Nine Months Ended February 29, 2024 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 369,923 $ 465,421 $ 91,558 $ - $ 926,902 Restructuring and other expense, net - 84 - 620 704 Separation costs - - - 12,465 12,465 Miscellaneous income (expense), net 49 452 1,165 ( 7,649 ) ( 5,983 ) Loss on extinguishment of debt - - - ( 1,534 ) ( 1,534 ) Equity Income - 124,032 - 3,296 127,328 Adjusted EBITDA (1)(2)(3)(4) 52,537 158,501 ( 6,434 ) ( 16,775 ) 187,829 Nine Months Ended February 29, 2023 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 406,479 $ 542,536 $ 100,679 $ - $ 1,049,694 Impairment of long-lived assets - 484 - - 484 Restructuring and other expense (income), net 206 617 - ( 1,177 ) ( 354 ) Separation costs - - - 3,572 3,572 Miscellaneous income (expense), net ( 78 ) 405 19 ( 4,845 ) ( 4,499 ) Equity Income - 116,809 - ( 14,805 ) 102,004 Adjusted EBITDA (1)(2)(4) 67,846 157,458 2,932 ( 15,948 ) 212,288 (1) Excludes pre-tax charges of $ 8,103 and $ 4,774 from separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. (2) Excludes the following items reflected in Equity Income in our consolidated statements of earnings: • For the nine months ended February 29, 2024, our share of the gain realized by our engineered cabs joint venture, Workhorse, in connection with the sale of the joint venture’s operations in Brazil, which totaled $ 2,780 on a pre-tax basis. • For the nine months ended February 28, 2023, the loss realized in connection with the August 3, 2022, sale of our then 50 % noncontrolling equity investment in ArtiFlex, or $ 16,059 on a pre-tax basis, including $ 300 of transaction costs during the three months ended February 28, 2023. (3) Excludes a pre-tax loss of $ 1,534 realized in connection with the July 28, 2023, early redemption of the 2026 Notes. The loss resulted primarily from unamortized issuance costs and discount included in the carrying amount of the 2026 Notes and the acceleration of the remaining unamortized loss in equity related to a treasury lock derivative instrument executed in connection with the issuance of the 2026 Notes. (4) Reflects reductions in certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to Worthington Steel but did not meet the requirements to be presented as discontinued operations. (5) A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. Total assets for each of our reportable segments at the dates indicated were as follows: February 29, May 31, (In thousands) 2024 2023 Consumer Products $ 566,715 $ 544,911 Building Products 678,699 706,169 Sustainable Energy Solutions 144,543 129,872 Unallocated Corporate and Other 314,732 509,170 Total assets of continuing operations $ 1,704,689 $ 1,890,122 |
Acquisitions
Acquisitions | 9 Months Ended |
Feb. 29, 2024 | |
Business Combinations [Abstract] | |
Acquisitions | Note P – Acquisitions Halo On February 1, 2024, we acquired an 80 % controlling interest in a newly formed joint venture with HPG for total cash consideration of $ 9,386 , of which $ 679 related to a customer overpayment and was held back at closing. The remaining 20 % noncontrolling interest was retained by HPG. Halo is an asset-light business with technology-enabled solutions in the outdoor cooking space with products that include Halo TM branded pizza ovens, pellet grills, griddles and other accessories. Halo is being operated as part of the Consumer Products operating segment and its operating results have been included in our consolidated statement of earnings since the date of acquisition. Pro forma results, including the acquired business since the beginning of fiscal 2023, would not be materially different than the reported results. The information included herein is based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired is fully evaluated by us, including but not limited to, the fair value accounting. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill which will be deductible by us for income tax purposes. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Halo, we identified and valued the following intangible assets: Amount Useful Life Category (In thousands) (Years) Trade name $ 3,500 10 Product design/Know-how 800 8 Customer relationships 200 8 Total acquired identifiable intangible assets $ 4,500 The following table summarizes the consideration transferred and the estimated fair value assigned to the assets acquired and liabilities assumed at the acquisition date. These amounts reflect various preliminary fair value estimates and assumptions, including preliminary work performed by a third-party valuation specialist, and are subject to change within the measurement period as the valuation is finalized. The primary areas of preliminary purchase price allocation subject to change relate to the valuation of acquired tangible assets and liabilities, identification and valuation of residual goodwill and tax effects of acquired assets and assumed liabilities. (In thousands) Preliminary Accounts receivable $ 88 Inventories 5,511 Property, plant and equipment 1,732 Intangible assets 4,500 Total identifiable assets 11,831 Accounts payable ( 7,293 ) Other accrued items ( 1,099 ) Net identifiable assets 3,439 Goodwill 8,294 Net assets 11,733 Noncontrolling interest ( 2,347 ) Total cash consideration $ 9,386 Level5 On June 2, 2022, we acquired Level5, a leading provider of drywall tools and related accessories. The total purchase price was $ 59,321 , including $ 2,000 attributed to an earnout agreement with the selling shareholders, which provides for up to an additional $ 25,000 of cash consideration should certain earnings targets be met annually through calendar year 2024. The earnout agreement also requires continued employment of a selling shareholder during the duration of the earnout period. Accordingly, payments to this key employee, to the extent earned, will be accounted for as post-combination compensation expense. As of February 29, 2024, no amounts were accrued as compensation expense for anticipated payments under the second earnout period ending December 31, 2023 or the third earnout period ending December 31, 2024. Level5 is being operated as part of the Consumer Products operating segment and its results have been included in our consolidated statements of earnings since the date of acquisition. Proforma results, including the acquired business since the beginning of fiscal 2022, would not be materially different from the reported results. The assets acquired and liabilities assumed were recognized at their estimated acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired. In connection with the acquisition of Level5, we identified and valued the following intangible assets: Amount Useful Life Category (In thousands) (Years) Trade name $ 13,500 Indefinite Customer relationships 13,300 10 Technological know-how 6,500 20 Non-compete agreement 280 3 Total acquired identifiable intangible assets $ 33,580 The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g., assembled workforce) or of immaterial value. The purchase price also includes strategic and synergistic benefits (i.e., investment value) specific to us, which resulted in a purchase price in excess of the fair value of the identifiable net assets. This additional investment value resulted in goodwill which will be deductible for income tax purposes. The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date. (In thousands) Preliminary Measurement Final Cash and cash equivalents $ 1,515 $ - $ 1,515 Accounts receivable 2,860 - 2,860 Inventories 9,161 - 9,161 Prepaid expenses 64 - 64 Property, plant and equipment 273 - 273 Intangible assets 33,580 - 33,580 Operating lease assets 377 - 377 Total identifiable assets 47,830 - 47,830 Accounts payable ( 3,175 ) - ( 3,175 ) Accrued expenses ( 904 ) 151 ( 753 ) Current operating lease liabilities ( 111 ) - ( 111 ) Noncurrent operating lease liabilities ( 266 ) - ( 266 ) Net identifiable assets 43,374 151 43,525 Goodwill 15,947 - 15,947 Total purchase price 59,321 151 59,472 Less: Fair value of earnout ( 2,000 ) - ( 2,000 ) Plus: Net working capital deficit 282 ( 151 ) 131 Cash purchase price $ 57,603 $ - $ 57,603 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 9 Months Ended |
Feb. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Note Q – Derivative Financial Instruments and Hedging Activities We utilize derivative financial instruments to primarily manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative financial instruments include interest rate risk, foreign currency exchange rate risk and commodity price risk. While certain of our derivative financial instruments are designated as hedging instruments, we also enter into derivative financial instruments that are designed to hedge a risk, but are not designated as hedging instruments and, therefore, do not qualify for hedge accounting. These derivative financial instruments are adjusted to current fair value through earnings at the end of each period. Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps and treasury locks to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs. Foreign Currency Exchange Rate Risk Management – We conduct business in several major international currencies and are, therefore, subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable currency exchange rate fluctuations. The translation of foreign currencies into U.S. dollars also subjects us to exposure related to fluctuating currency exchange rates; however, derivative financial instruments are not used to manage this risk. Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, copper, zinc, aluminum and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative financial instruments to manage the associated price risk. We are exposed to counterparty credit risk on all of our derivative financial instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty, and management believes the overall risk of loss is remote and, in any event, would not be material. Refer to “Note R – Fair Value” for additional information regarding the accounting treatment for our derivative financial instruments, as well as how fair value is determined. The following table summarizes the fair value of our derivative financial instruments and the respective lines in which they were recorded in the consolidated balance sheet at February 29, 2024 and May 31, 2023: Fair Value of Assets Fair Value of Liabilities Balance Balance Sheet February 29, May 31, Sheet February 29, May 31, (In thousands) Location 2024 2023 Location 2024 2023 Derivatives designated as hedging instruments Commodity contracts Receivables $ 1,064 $ 20 Accounts payable $ 115 $ 4,069 Commodity contracts Other assets 26 - Other liabilities - 237 Foreign currency exchange contracts Receivables - - Accounts payable - 33 Subtotal $ 1,090 $ 20 $ 115 $ 4,339 Derivatives not designated as hedging instruments Commodity contracts Receivables $ 308 $ 294 Accounts payable $ 445 $ 1,609 Foreign currency exchange contracts Receivables - - Accounts payable 3 - Subtotal $ 308 $ 294 $ 448 $ 1,609 Total derivative financial instruments $ 1,398 $ 314 $ 563 $ 5,948 The amounts in the table above reflect the fair value of our derivative financial instruments on a net basis where allowable under master netting arrangements. Had these amounts been recognized on a gross basis, the impact would have been an increase in receivables with a corresponding increase in accounts payable of $ 174 and $ 272 at February 29, 2024 and May 31, 2023, respectively. Cash Flow Hedges We enter into derivative financial instruments to hedge our exposure to changes in cash flows attributable to commodity price fluctuations associated with certain forecasted transactions. These derivative financial instruments are designated and qualify as cash flow hedges. The earnings effects of these derivative financial instruments are presented in the same statement of earnings line items as the earnings effects of the hedged items. For derivative financial instruments designated as cash flow hedges, we assess hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative financial instruments. The following table summarizes our cash flow hedges outstanding at February 29, 2024: Notional (In thousands) Amount Maturity Date(s) Commodity contracts $ 9,113 March 2024 - June 2025 The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented: (In thousands) Gain (Loss) Location of Gain (Loss) Gain (Loss) Reclassified For the three months ended February 29, 2024: Commodity contracts $ 1,944 Cost of goods sold $ 1,328 Interest rate contracts - Interest expense, net 52 Total $ 1,944 $ 1,380 For the three months ended February 28, 2023: Commodity contracts $ 7,093 Cost of goods sold $ ( 4,858 ) Interest rate contracts - Interest expense ( 7 ) Foreign currency exchange contracts 66 Miscellaneous income, net 67 Total $ 7,159 $ ( 4,798 ) For the nine months ended February 29, 2024: Commodity contracts $ 3,553 Cost of goods sold $ ( 921 ) Interest rate contracts - Loss on extinguishment of debt ( 642 ) Interest rate contracts - Interest expense 136 Foreign currency exchange contracts ( 11 ) Cost of goods sold ( 44 ) Total $ 3,542 $ ( 1,471 ) For the nine months ended February 28, 2023: Commodity contracts $ ( 7,770 ) Cost of goods sold $ ( 10,925 ) Interest rate contracts - Interest expense ( 20 ) Foreign currency exchange contracts 124 Miscellaneous income, net ( 7 ) Total $ ( 7,646 ) $ ( 10,952 ) The estimated net amount of the losses recognized in AOCI at February 29, 2024 expected to be reclassified into net earnings within the succeeding twelve months is $ 903 (net of tax of $ 232 ). This amount was computed using the fair value of the cash flow hedges at February 29, 2024, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2024 and May 31, 2025. Economic (Non-designated) Hedges We enter into foreign currency exchange contracts to manage our foreign currency exchange rate exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment. We also enter into certain commodity contracts that do not qualify for hedge accounting treatment. Accordingly, these derivative financial instruments are adjusted to current market value at the end of each period through gain (loss) recognized in earnings. The following table summarizes our economic (non-designated) derivative financial instruments outstanding at February 29, 2024: Notional (In thousands) Amount Maturity Date(s) Commodity contracts $ 1,648 March 2024 - December 2024 Foreign currency exchange contracts $ 7,034 March 2024 The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented: Gain Recognized in Earnings for the Three Months Ended Location of Gain (Loss) February 29, February 28, (In thousands) Recognized in Earnings 2024 2023 Commodity contracts Cost of goods sold $ 311 $ 2,613 Foreign currency exchange contracts Miscellaneous income, net ( 82 ) 79 Total $ 229 $ 2,692 Gain (Loss) Recognized in Earnings for the Nine Months Ended Location of Gain (Loss) February 29, February 28, (In thousands) Recognized in Earnings 2024 2023 Commodity contracts Cost of goods sold $ ( 832 ) $ 4,841 Foreign currency exchange contracts Miscellaneous income, net ( 3 ) 32 Total $ ( 835 ) $ 4,873 |
Fair Value
Fair Value | 9 Months Ended |
Feb. 29, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Note R – Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability. Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair values are as follows: Level 1 – Observable prices in active markets for identical assets and liabilities. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Recurring Fair Value Measurements At February 29, 2024, our assets and liabilities measured at fair value on a recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Total Assets (1) Derivative financial instruments $ - $ 1,398 $ - $ 1,398 Total assets $ - $ 1,398 $ - $ 1,398 Liabilities (1) Derivative financial instruments $ - $ 563 $ - $ 563 Total liabilities $ - $ 563 $ - $ 563 (1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. At May 31, 2023, our assets and liabilities measured at fair value on a recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Total Assets (1) Derivative financial instruments $ - $ 314 $ - $ 314 Total assets $ - $ 314 $ - $ 314 Liabilities (1) Derivative financial instruments $ - $ 5,948 $ - $ 5,948 Total liabilities $ - $ 5,948 $ - $ 5,948 (1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. Non-Recurring Fair Value Measurements At February 29, 2024, there were no assets measured at fair value on a non-recurring basis on our consolidated balance sheet. At May 31, 2023, our assets measured at fair value on a non-recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Totals Assets Long-lived assets held and used (1) - 70 - 70 Total assets $ - $ 70 $ - $ 70 (1) Comprised of certain assets associated with a capital project at our Building Products facility in Jefferson, Ohio which were written down to their estimated salvage value of $ 70 . The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities approximate carrying value due to their short-term nature. The fair value of long-term debt, including current maturities, based upon models utilizing market observable (Level 2) inputs and credit risk, w as $ 227,908 and $ 639,948 at February 29, 2024 and May 31, 2023, respectively. The carrying amount of long-term debt, including current maturities, was $ 297,962 and $ 689,982 at February 29, 2024 and May 31, 2023 , respectively. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Financial Results from Discontinued Operations | The following table summarizes the assets and liabilities from discontinued operations at May 31, 2023: Assets Current assets: Cash and cash equivalents $ 32,678 Receivables, less allowances of $ 2,581 468,024 Inventories: Raw materials 172,580 Work in process 164,059 Finished products 76,830 Total inventories 413,469 Income taxes receivable 2,517 Prepaid expenses and other current assets 58,656 Assets held for sale 3,381 Total current assets 978,725 Investments in unconsolidated affiliates 114,550 Operating lease assets 75,281 Goodwill 78,642 Other intangible assets, net of accumulated amortization of $ 38,894 83,375 Other assets 10,984 Property, plant and equipment: Land 37,577 Buildings and improvements 169,155 Machinery and equipment 860,077 Construction in progress 20,386 Total property, plant and equipment 1,087,195 Less: accumulated depreciation 667,956 Total property, plant and equipment, net 419,239 Total assets $ 1,760,796 Liabilities Current liabilities: Accounts payable $ 402,177 Short-term borrowings 2,813 Accrued compensation, contributions to employee benefit plans and related taxes 47,028 Other accrued items 14,094 Current operating lease liabilities 5,926 Total current liabilities 472,038 Other liabilities 41,520 Noncurrent operating lease liabilities 71,656 Deferred income taxes, net 19,093 Total liabilities $ 604,307 The following table summarizes the financial results from the discontinued operations of Worthington Steel for the periods presented. There were no discontinued operations for the three months ended February 29, 2024. Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Net sales $ - $ 757,007 $ 1,670,027 $ 2,637,834 Cost of goods sold - 692,171 1,481,731 2,448,319 Gross profit - 64,836 188,296 189,515 Selling, general and administrative expense - 34,698 74,908 106,110 Impairment of long-lived assets - - 1,401 312 Restructuring and other expense (income) - 1 - ( 4,204 ) Separation costs - 4,042 18,521 12,021 Operating income - 26,095 93,466 75,276 Other income (expense): Miscellaneous income, net - 1,110 1,016 2,146 Interest expense, net - ( 1,849 ) ( 3,706 ) ( 6,557 ) Equity in net income of unconsolidated affiliate - ( 185 ) 12,735 3,491 Earnings before income taxes - 25,171 103,511 74,356 Income tax expense - 4,664 20,405 14,974 Net earnings - 20,507 83,106 59,382 Net earnings attributable to noncontrolling interest - 3,933 7,460 8,382 Net earnings attributable to controlling interest $ - $ 16,574 $ 75,646 $ 51,000 The following table summarizes significant non-cash operating items and capital expenditures of discontinued operations included in the consolidated statements of cash flows for the periods presented. There were no discontinued operations for the three months ended February 29, 2024. Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, 2024 2023 2024 2023 Significant non-cash operating items: Depreciation and amortization $ - $ 16,260 $ 32,043 $ 50,306 Impairment of long-lived assets - - 1,401 312 Equity in income of unconsolidated affiliate - 10,185 ( 12,734 ) 6,509 Net loss (gain) on sale of assets - 46 ( 412 ) ( 3,778 ) Stock-based compensation - 1,211 3,472 3,340 Significant investing activities: Investment in property, plant and equipment - ( 10,809 ) ( 33,457 ) ( 36,450 ) Acquisitions, net of cash acquired - - ( 21,013 ) - Significant financing activities: Net proceeds from short-term borrowings - - 172,187 - |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Financial Information | The following tables summarize combined financial information for our unconsolidated affiliates included in continuing operations as of the dates, and for the periods presented: February 29, May 31, (In thousands) 2024 2023 Cash and cash equivalents $ 86,533 $ 36,988 Other current assets 574,099 661,700 Non-current assets 324,793 335,567 Total assets $ 985,425 $ 1,034,255 Current liabilities 312,235 176,959 Current maturities of long-term debt 20,500 36,936 Long-term debt 349,377 349,215 Other non-current liabilities 137,275 139,228 Equity 166,038 331,917 Total liabilities and equity $ 985,425 $ 1,034,255 Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands) 2024 2023 2024 2023 Net sales $ 497,938 $ 511,663 $ 1,579,992 $ 1,727,225 Gross profit 171,497 154,980 492,812 467,664 Operating income 126,377 115,286 376,782 349,925 Depreciation and amortization 6,936 5,662 21,737 18,559 Interest expense 4,943 4,476 15,220 10,920 Income tax expense 549 791 1,900 1,604 Net earnings 119,982 111,505 360,748 342,574 |
Debt and Receivables Securiti_2
Debt and Receivables Securitization (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt and Short-term Borrowings Outstanding | The following table summarizes our long-term debt outstanding at February 29, 2024 and May 31, 2023: February 29, May 31, (In thousands) 2024 2023 2024 Notes - 150,000 2026 Notes - 243,623 4.30 % senior notes due August 1, 2032 200,000 200,000 2.06 % Series A senior note due August 23, 2031 39,654 39,226 2.40 % Series B senior notes due August 23, 2034 59,427 58,786 Other 267 528 Total debt 299,348 692,163 Unamortized discount and debt issuance costs ( 1,386 ) ( 2,181 ) Total debt, net 297,962 689,982 Less: current maturities and short-term borrowings 267 264 Total long-term debt $ 297,695 $ 689,718 |
Maturities of Long-term Debt and Short-term Borrowings | Maturities of long-term debt are as follows: (In thousands) 2025 $ 267 2026 - 2027 - 2028 - 2029 - Thereafter 299,081 Total $ 299,348 |
Restructuring and Other Incom_2
Restructuring and Other Income, Net (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Income, Net | A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption, in our consolidated statement of earnings for the nine months ended February 28, 2024 is summarized below: (In thousands) Balance, as of May 31, 2023 Expense Payments Balance, as of February 29, 2024 Early retirement and severance $ 135 $ 704 $ ( 253 ) $ 586 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Equity [Abstract] | |
Summary of Tax Effects on Each Component of OCI | The following table summarizes the tax effects on each component of OCI for the periods presented: Three Months Ended February 29, 2024 February 28, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Foreign currency translation $ ( 615 ) $ ( 85 ) $ ( 700 ) $ 1,421 $ 142 $ 1,563 Pension liability adjustment 8,927 ( 2,122 ) 6,805 415 ( 92 ) 323 Cash flow hedges 564 ( 346 ) 218 43,963 ( 9,621 ) 34,342 Other comprehensive income (loss) $ 8,876 $ ( 2,553 ) $ 6,323 $ 45,799 $ ( 9,571 ) $ 36,228 Nine Months Ended February 29, 2024 February 28, 2023 (In thousands) Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax Foreign currency translation $ 1,555 $ 88 $ 1,643 $ ( 7,549 ) $ ( 131 ) $ ( 7,680 ) Pension liability adjustment 8,927 ( 2,125 ) 6,802 4,155 ( 975 ) 3,180 Cash flow hedges 9,140 ( 2,224 ) 6,916 21,201 ( 4,159 ) 17,042 Other comprehensive income (loss) $ 19,622 $ ( 4,261 ) $ 15,361 $ 17,807 $ ( 5,265 ) $ 12,542 |
Changes in Equity (Tables)
Changes in Equity (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Equity [Abstract] | |
Summary of Changes in Equity by Component and in Total | The following tables summarize the changes in equity by component and in total for the periods presented: Controlling Interest Additional Non- Paid-in AOCI, Retained controlling (In thousands) Capital Net of Tax Earnings Subtotal Interests Total Balance at May 31, 2023 $ 290,799 $ ( 23,179 ) $ 1,428,391 $ 1,696,011 $ 125,617 $ 1,821,628 Net earnings - - 96,106 96,106 3,597 99,703 Other comprehensive loss - ( 5,408 ) - ( 5,408 ) - ( 5,408 ) Common shares issued, net of withholding tax ( 5,130 ) - - ( 5,130 ) - ( 5,130 ) Common shares in non-qualified plans 130 - - 130 - 130 Stock-based compensation 8,995 - - 8,995 - 8,995 Cash dividends declared - - ( 16,081 ) ( 16,081 ) - ( 16,081 ) Dividends to noncontrolling interests - - - - ( 1,921 ) ( 1,921 ) Balance at August 31, 2023 $ 294,794 $ ( 28,587 ) $ 1,508,416 $ 1,774,623 $ 127,293 $ 1,901,916 Net earnings - - 24,302 24,302 3,865 28,167 Other comprehensive income - 14,446 - 14,446 - 14,446 Common shares issued, net of withholding tax ( 9,207 ) - - ( 9,207 ) - ( 9,207 ) Common shares in non-qualified plans 195 - - 195 - 195 Stock-based compensation 4,511 - - 4,511 - 4,511 Cash dividends declared - - ( 16,061 ) ( 16,061 ) - ( 16,061 ) Dividends to noncontrolling interests - - - - - - Balance at November 30, 2023 $ 290,293 $ ( 14,141 ) $ 1,516,657 $ 1,792,809 $ 131,158 $ 1,923,967 Net earnings - - 22,000 22,000 - 22,000 Other comprehensive income - 6,323 - 6,323 - 6,323 Common shares issued, net of withholding tax ( 1,023 ) - - ( 1,023 ) - ( 1,023 ) Common shares in non-qualified plans 53 - - 53 - 53 Stock-based compensation 2,071 - - 2,071 - 2,071 Separation of Worthington Steel - ( 717 ) ( 901,370 ) ( 902,087 ) ( 128,812 ) ( 1,030,899 ) Cash dividends declared - - ( 8,050 ) ( 8,050 ) - ( 8,050 ) Balance at February 29, 2024 $ 291,394 $ ( 8,535 ) $ 629,237 $ 912,096 $ 2,346 $ 914,442 Controlling Interest Additional Non- Paid-in AOCI, Retained controlling (In thousands) Capital Net of Tax Earnings Subtotal Interests Total Balance at May 31, 2022 $ 273,439 $ ( 22,850 ) $ 1,230,163 $ 1,480,752 $ 133,210 $ 1,613,962 Net earnings - - 64,082 64,082 1,162 65,244 Other comprehensive loss - ( 20,462 ) - ( 20,462 ) - ( 20,462 ) Common shares issued, net of withholding tax ( 3,466 ) - - ( 3,466 ) - ( 3,466 ) Common shares in non-qualified plans 136 - - 136 - 136 Stock-based compensation 6,976 - - 6,976 - 6,976 Cash dividends declared - - ( 15,418 ) ( 15,418 ) - ( 15,418 ) Balance at August 31, 2022 $ 277,085 $ ( 43,312 ) $ 1,278,827 $ 1,512,600 $ 134,372 $ 1,646,972 Net earnings - - 16,218 16,218 3,287 19,505 Other comprehensive loss - ( 3,224 ) - ( 3,224 ) - ( 3,224 ) Common shares issued, net of withholding tax ( 649 ) - - ( 649 ) - ( 649 ) Common shares in non-qualified plans 298 - - 298 - 298 Stock-based compensation 3,620 - - 3,620 - 3,620 Cash dividends declared - - ( 15,470 ) ( 15,470 ) - ( 15,470 ) Dividends to noncontrolling interests - - - - ( 11,760 ) ( 11,760 ) Balance at November 30, 2022 $ 280,354 $ ( 46,536 ) $ 1,279,575 $ 1,513,393 $ 125,899 $ 1,639,292 Net earnings - - 46,325 46,325 3,933 50,258 Other comprehensive income - 36,228 - 36,228 - 36,228 Common shares issued, net of withholding tax 704 - - 704 - 704 Common shares in non-qualified plans 107 - - 107 - 107 Stock-based compensation 3,818 - - 3,818 - 3,818 Cash dividends declared - - ( 15,149 ) ( 15,149 ) - ( 15,149 ) Balance at February 28, 2023 $ 284,983 $ ( 10,308 ) $ 1,310,751 $ 1,585,426 $ 129,832 $ 1,715,258 |
Summary of Changes in AOCI | The following table summarizes the changes in AOCI for the periods presented: Foreign Pension Currency Liability Cash Flow (In thousands) Translation Adjustment Hedges AOCI Balance at May 31, 2023 $ ( 22,123 ) $ ( 1,730 ) $ 674 $ ( 23,179 ) Other comprehensive income before reclassifications 1,555 60 14,893 16,508 Reclassification adjustments to net earnings (a)(b) - 8,867 ( 5,753 ) 3,114 Income tax effect 88 ( 2,125 ) ( 2,224 ) ( 4,261 ) Separation of Worthington Steel 10,874 ( 5,984 ) ( 5,607 ) ( 717 ) Balance at February 29, 2024 $ ( 9,606 ) $ ( 912 ) $ 1,983 $ ( 8,535 ) Foreign Pension Currency Liability Cash Flow (In thousands) Translation Adjustment Hedges AOCI Balance at May 31, 2022 $ ( 15,310 ) $ ( 6,244 ) $ ( 1,296 ) $ ( 22,850 ) Other comprehensive loss before reclassifications ( 7,549 ) ( 619 ) ( 2,999 ) ( 11,167 ) Reclassification adjustments to net earnings (a)(b) - 4,774 24,200 28,974 Income tax effect ( 131 ) ( 975 ) ( 4,159 ) ( 5,265 ) Balance at February 28, 2023 $ ( 22,990 ) $ ( 3,064 ) $ 15,746 $ ( 10,308 ) The consolidated statement of earnings classification of amounts reclassified to net income include: (a) Cash flow hedges – Disclosure of reclassification adjustments classified within continuing operations is provided in “Note Q – Derivative Financial Instruments and Hedging Activities.” The residual amount relates to Worthington Steel and has been presented within discontinued operations. (b) Pension liability adjustment – Reflects the acceleration of deferred pension costs in AOCI related to separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of Stock Option Activity | The table below summarizes our stock option activity during the nine months ended February 29, 2024: Weighted Average Stock Exercise (In thousands, except per common share amounts) Options Price Outstanding - June 1, 2023 573 $ 42.61 Converted to Worthington Steel common shares (1) ( 61 ) 51.44 Separation related adjustment 254 - Granted 58 68.68 Exercised ( 126 ) 39.73 Forfeited ( 7 ) 45.91 Outstanding - February 29, 2024 691 $ 28.83 (1) Effective as of the Distribution, each outstanding stock option held by a then-current or former employee or service provider of Worthington Steel was converted into a stock option denominated in the common shares of Worthington Steel. |
Summary of Service-Based Restricted Common Shares | The table below sets forth the service-based restricted common shares for the nine months ended February 29, 2024: Weighted Restricted Average Common Grant Date (In thousands, except per common share amounts) Shares Fair Value Outstanding - June 1, 2023 800 $ 47.39 Converted to Worthington Steel common shares (1) ( 296 ) 55.70 Separation related adjustment 220 - Granted 214 64.57 Vested ( 337 ) 39.17 Forfeited ( 20 ) 47.07 Outstanding - February 29, 2024 581 $ 36.34 (1) Effective as of the Distribution, each restricted stock award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel common shares. |
Summary of Performance Activity | The table summarizes our performance activity for the nine months ended February 29, 2024. Weighted Restricted Average Common Grant Date (In thousands, except per common share amounts) Shares Fair Value Outstanding - June 1, 2023 172 $ 46.37 Converted to Worthington Steel common shares (1) ( 39 ) 56.99 Separation related adjustment 58 - Granted 113 52.73 Vested ( 131 ) 39.93 Forfeited ( 25 ) 36.02 Outstanding - February 29, 2024 148 $ 37.70 (1) Effective as of the Distribution, each performance share award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel shares. |
Non-Qualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Assumptions Used to Determine Fair Value of Stock Options | The weighted average fair value of stock options granted during the nine months ended February 29, 2024 was based on the following assumptions: Dividend yield 2.34 % Expected volatility 42.62 % Risk-free interest rate 4.04 % Expected term (years) 6.0 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share Attributable to Controlling Interest | The following table sets forth the computation of basic and diluted EPS attributable to controlling interest for the periods presented: Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands, except per common share amounts) 2024 2023 2024 2023 Numerator (basic & diluted): Net earnings from continuing operations $ 22,000 $ 29,751 $ 66,763 $ 75,625 Denominator: Denominator for basic EPS from continuing operations - Weighted average common shares 49,315 48,587 49,113 48,541 Effect of dilutive securities 1,102 906 1,158 815 Denominator for diluted EPS from continuing operations - Weighted average common shares 50,417 49,493 50,271 49,356 Basic EPS from continuing operations $ 0.45 $ 0.61 $ 1.36 $ 1.56 Diluted EPS from continuing operations $ 0.44 $ 0.60 $ 1.33 $ 1.53 |
Segment Operations (Tables)
Segment Operations (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Segment Reporting [Abstract] | |
Financial Information for Reportable Segments | The following tables presents summarized financial information for our reportable segments for the periods indicated. Three Months Ended February 29, 2024 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 133,181 $ 148,190 $ 35,384 $ - $ 316,755 Restructuring and other expense, net - 84 - 614 698 Separation costs - - - 2,999 2,999 Miscellaneous income (expense), net 12 154 328 ( 7,489 ) ( 6,995 ) Equity Income - 43,813 - ( 578 ) 43,235 Adjusted EBITDA (1) 25,649 53,059 ( 2,667 ) ( 9,170 ) 66,871 Three Months Ended February 28, 2023 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 130,684 $ 183,839 $ 31,792 $ - $ 346,315 Impairment of long-lived assets - 484 - - 484 Restructuring and other expense, net 206 617 - - 823 Separation costs - - - 2,305 2,305 Miscellaneous income (expense), net ( 12 ) 122 ( 37 ) 144 217 Equity Income - 37,836 - ( 725 ) 37,111 Adjusted EBITDA (2)(4) 21,100 58,097 212 ( 9,193 ) 70,216 Nine Months Ended February 29, 2024 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 369,923 $ 465,421 $ 91,558 $ - $ 926,902 Restructuring and other expense, net - 84 - 620 704 Separation costs - - - 12,465 12,465 Miscellaneous income (expense), net 49 452 1,165 ( 7,649 ) ( 5,983 ) Loss on extinguishment of debt - - - ( 1,534 ) ( 1,534 ) Equity Income - 124,032 - 3,296 127,328 Adjusted EBITDA (1)(2)(3)(4) 52,537 158,501 ( 6,434 ) ( 16,775 ) 187,829 Nine Months Ended February 29, 2023 (In thousands) Consumer Products Building Products Sustainable Energy Solutions Unallocated Corporate and Other Consolidated (5) Net sales $ 406,479 $ 542,536 $ 100,679 $ - $ 1,049,694 Impairment of long-lived assets - 484 - - 484 Restructuring and other expense (income), net 206 617 - ( 1,177 ) ( 354 ) Separation costs - - - 3,572 3,572 Miscellaneous income (expense), net ( 78 ) 405 19 ( 4,845 ) ( 4,499 ) Equity Income - 116,809 - ( 14,805 ) 102,004 Adjusted EBITDA (1)(2)(4) 67,846 157,458 2,932 ( 15,948 ) 212,288 (1) Excludes pre-tax charges of $ 8,103 and $ 4,774 from separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. (2) Excludes the following items reflected in Equity Income in our consolidated statements of earnings: • For the nine months ended February 29, 2024, our share of the gain realized by our engineered cabs joint venture, Workhorse, in connection with the sale of the joint venture’s operations in Brazil, which totaled $ 2,780 on a pre-tax basis. • For the nine months ended February 28, 2023, the loss realized in connection with the August 3, 2022, sale of our then 50 % noncontrolling equity investment in ArtiFlex, or $ 16,059 on a pre-tax basis, including $ 300 of transaction costs during the three months ended February 28, 2023. (3) Excludes a pre-tax loss of $ 1,534 realized in connection with the July 28, 2023, early redemption of the 2026 Notes. The loss resulted primarily from unamortized issuance costs and discount included in the carrying amount of the 2026 Notes and the acceleration of the remaining unamortized loss in equity related to a treasury lock derivative instrument executed in connection with the issuance of the 2026 Notes. (4) Reflects reductions in certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to Worthington Steel but did not meet the requirements to be presented as discontinued operations. (5) A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. Total assets for each of our reportable segments at the dates indicated were as follows: February 29, May 31, (In thousands) 2024 2023 Consumer Products $ 566,715 $ 544,911 Building Products 678,699 706,169 Sustainable Energy Solutions 144,543 129,872 Unallocated Corporate and Other 314,732 509,170 Total assets of continuing operations $ 1,704,689 $ 1,890,122 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
WH Products | |
Schedule of Acquisition of Intangible Assets | In connection with the acquisition of Halo, we identified and valued the following intangible assets: Amount Useful Life Category (In thousands) (Years) Trade name $ 3,500 10 Product design/Know-how 800 8 Customer relationships 200 8 Total acquired identifiable intangible assets $ 4,500 |
Schedule of Consideration Transferred for the Assets and the Preliminary Fair Value Assigned to Assets Acquired and Liabilities Assumed | (In thousands) Preliminary Accounts receivable $ 88 Inventories 5,511 Property, plant and equipment 1,732 Intangible assets 4,500 Total identifiable assets 11,831 Accounts payable ( 7,293 ) Other accrued items ( 1,099 ) Net identifiable assets 3,439 Goodwill 8,294 Net assets 11,733 Noncontrolling interest ( 2,347 ) Total cash consideration $ 9,386 |
Level5 Tools, LLC | |
Schedule of Acquisition of Intangible Assets | In connection with the acquisition of Level5, we identified and valued the following intangible assets: Amount Useful Life Category (In thousands) (Years) Trade name $ 13,500 Indefinite Customer relationships 13,300 10 Technological know-how 6,500 20 Non-compete agreement 280 3 Total acquired identifiable intangible assets $ 33,580 |
Schedule of Consideration Transferred for the Assets and the Preliminary Fair Value Assigned to Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid and the final fair value assigned to the assets and liabilities assumed at the acquisition date. (In thousands) Preliminary Measurement Final Cash and cash equivalents $ 1,515 $ - $ 1,515 Accounts receivable 2,860 - 2,860 Inventories 9,161 - 9,161 Prepaid expenses 64 - 64 Property, plant and equipment 273 - 273 Intangible assets 33,580 - 33,580 Operating lease assets 377 - 377 Total identifiable assets 47,830 - 47,830 Accounts payable ( 3,175 ) - ( 3,175 ) Accrued expenses ( 904 ) 151 ( 753 ) Current operating lease liabilities ( 111 ) - ( 111 ) Noncurrent operating lease liabilities ( 266 ) - ( 266 ) Net identifiable assets 43,374 151 43,525 Goodwill 15,947 - 15,947 Total purchase price 59,321 151 59,472 Less: Fair value of earnout ( 2,000 ) - ( 2,000 ) Plus: Net working capital deficit 282 ( 151 ) 131 Cash purchase price $ 57,603 $ - $ 57,603 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Schedule of Fair Value of Derivative Instruments | The following table summarizes the fair value of our derivative financial instruments and the respective lines in which they were recorded in the consolidated balance sheet at February 29, 2024 and May 31, 2023: Fair Value of Assets Fair Value of Liabilities Balance Balance Sheet February 29, May 31, Sheet February 29, May 31, (In thousands) Location 2024 2023 Location 2024 2023 Derivatives designated as hedging instruments Commodity contracts Receivables $ 1,064 $ 20 Accounts payable $ 115 $ 4,069 Commodity contracts Other assets 26 - Other liabilities - 237 Foreign currency exchange contracts Receivables - - Accounts payable - 33 Subtotal $ 1,090 $ 20 $ 115 $ 4,339 Derivatives not designated as hedging instruments Commodity contracts Receivables $ 308 $ 294 Accounts payable $ 445 $ 1,609 Foreign currency exchange contracts Receivables - - Accounts payable 3 - Subtotal $ 308 $ 294 $ 448 $ 1,609 Total derivative financial instruments $ 1,398 $ 314 $ 563 $ 5,948 |
Schedule of Summary of Derivative Hedges | The following table summarizes our economic (non-designated) derivative financial instruments outstanding at February 29, 2024: Notional (In thousands) Amount Maturity Date(s) Commodity contracts $ 1,648 March 2024 - December 2024 Foreign currency exchange contracts $ 7,034 March 2024 The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments for the periods presented: Gain Recognized in Earnings for the Three Months Ended Location of Gain (Loss) February 29, February 28, (In thousands) Recognized in Earnings 2024 2023 Commodity contracts Cost of goods sold $ 311 $ 2,613 Foreign currency exchange contracts Miscellaneous income, net ( 82 ) 79 Total $ 229 $ 2,692 Gain (Loss) Recognized in Earnings for the Nine Months Ended Location of Gain (Loss) February 29, February 28, (In thousands) Recognized in Earnings 2024 2023 Commodity contracts Cost of goods sold $ ( 832 ) $ 4,841 Foreign currency exchange contracts Miscellaneous income, net ( 3 ) 32 Total $ ( 835 ) $ 4,873 |
Cash Flow Hedges | |
Schedule of Summary of Derivative Hedges | The following table summarizes our cash flow hedges outstanding at February 29, 2024: Notional (In thousands) Amount Maturity Date(s) Commodity contracts $ 9,113 March 2024 - June 2025 The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from AOCI into net earnings for derivative financial instruments designated as cash flow hedges for the periods presented: (In thousands) Gain (Loss) Location of Gain (Loss) Gain (Loss) Reclassified For the three months ended February 29, 2024: Commodity contracts $ 1,944 Cost of goods sold $ 1,328 Interest rate contracts - Interest expense, net 52 Total $ 1,944 $ 1,380 For the three months ended February 28, 2023: Commodity contracts $ 7,093 Cost of goods sold $ ( 4,858 ) Interest rate contracts - Interest expense ( 7 ) Foreign currency exchange contracts 66 Miscellaneous income, net 67 Total $ 7,159 $ ( 4,798 ) For the nine months ended February 29, 2024: Commodity contracts $ 3,553 Cost of goods sold $ ( 921 ) Interest rate contracts - Loss on extinguishment of debt ( 642 ) Interest rate contracts - Interest expense 136 Foreign currency exchange contracts ( 11 ) Cost of goods sold ( 44 ) Total $ 3,542 $ ( 1,471 ) For the nine months ended February 28, 2023: Commodity contracts $ ( 7,770 ) Cost of goods sold $ ( 10,925 ) Interest rate contracts - Interest expense ( 20 ) Foreign currency exchange contracts 124 Miscellaneous income, net ( 7 ) Total $ ( 7,646 ) $ ( 10,952 ) |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Feb. 29, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | At February 29, 2024, our assets and liabilities measured at fair value on a recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Total Assets (1) Derivative financial instruments $ - $ 1,398 $ - $ 1,398 Total assets $ - $ 1,398 $ - $ 1,398 Liabilities (1) Derivative financial instruments $ - $ 563 $ - $ 563 Total liabilities $ - $ 563 $ - $ 563 (1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. At May 31, 2023, our assets and liabilities measured at fair value on a recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Total Assets (1) Derivative financial instruments $ - $ 314 $ - $ 314 Total assets $ - $ 314 $ - $ 314 Liabilities (1) Derivative financial instruments $ - $ 5,948 $ - $ 5,948 Total liabilities $ - $ 5,948 $ - $ 5,948 (1) The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. |
Assets Measured at Fair Value on Non-Recurring Basis | At February 29, 2024, there were no assets measured at fair value on a non-recurring basis on our consolidated balance sheet. At May 31, 2023, our assets measured at fair value on a non-recurring basis were as follows: Significant Quoted Prices Other Significant in Active Observable Unobservable Markets Inputs Inputs (In thousands) (Level 1) (Level 2) (Level 3) Totals Assets Long-lived assets held and used (1) - 70 - 70 Total assets $ - $ 70 $ - $ 70 (1) Comprised of certain assets associated with a capital project at our Building Products facility in Jefferson, Ohio which were written down to their estimated salvage value of $ 70 . |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) $ in Thousands | 9 Months Ended | ||||
Dec. 01, 2023 | Feb. 29, 2024 USD ($) Jointventure | Feb. 28, 2023 USD ($) | Feb. 01, 2024 | May 31, 2023 USD ($) | |
Current Assets of Discontinued Operations | |||||
Significant Accounting Policies [Line Items] | |||||
Unbilled receivables | $ 3,708 | ||||
Joint Venture Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Number of joint ventures | Jointventure | 4 | ||||
Spartan | Joint Venture Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of controlling interest by the Company | 52% | ||||
TWB | Joint Venture Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of controlling interest by the Company | 55% | ||||
Samuel | Joint Venture Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of controlling interest by the Company | 63% | ||||
Worthington Specialty Processing | Joint Venture Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of controlling interest by the Company | 51% | ||||
Halo | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of controlling interest by the Company | 80% | ||||
The Separation of Worthington Steel | |||||
Significant Accounting Policies [Line Items] | |||||
Percentage of outstanding common shares to holders as of close of business | 100% | ||||
Direct and incremental costs | $ 30,986 | $ 15,593 | |||
Direct and incremental costs attributed to discontinued operations | 18,521 | $ 12,021 | |||
Worthington Steel | Long-term Steel Supply Agreement | |||||
Significant Accounting Policies [Line Items] | |||||
Purchases | 20,274 | ||||
Payable | $ 10,702 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Assets and Liabilities from Discontinued Operations (Detail) $ in Thousands | May 31, 2023 USD ($) |
Current assets: | |
Total current assets | $ 978,725 |
Current liabilities: | |
Total current liabilities | 472,038 |
Discontinued Operations | |
Current assets: | |
Cash and cash equivalents | 32,678 |
Receivables, less allowances of $2,581 | 468,024 |
Raw materials | 172,580 |
Work in process | 164,059 |
Finished products | 76,830 |
Total inventories | 413,469 |
Income taxes receivable | 2,517 |
Prepaid expenses and other current assets | 58,656 |
Assets held for sale | 3,381 |
Total current assets | 978,725 |
Investments in unconsolidated affiliates | 114,550 |
Operating lease assets | 75,281 |
Goodwill | 78,642 |
Other intangible assets, net of accumulated amortization | 83,375 |
Other assets | 10,984 |
Total property, plant and equipment, gross | 1,087,195 |
Less: accumulated depreciation | 667,956 |
Total property, plant and equipment, net | 419,239 |
Total assets | 1,760,796 |
Current liabilities: | |
Accounts payable | 402,177 |
Short-term borrowings | 2,813 |
Accrued compensation, contributions to employee benefit plans and related taxes | 47,028 |
Other accrued items | 14,094 |
Current operating lease liabilities | 5,926 |
Total current liabilities | 472,038 |
Other liabilities | 41,520 |
Noncurrent operating lease liabilities | 71,656 |
Deferred income taxes, net | 19,093 |
Total liabilities | 604,307 |
Discontinued Operations | Land | |
Current assets: | |
Total property, plant and equipment, gross | 37,577 |
Discontinued Operations | Buildings and Improvements | |
Current assets: | |
Total property, plant and equipment, gross | 169,155 |
Discontinued Operations | Machinery and Equipment | |
Current assets: | |
Total property, plant and equipment, gross | 860,077 |
Discontinued Operations | Construction in Progress | |
Current assets: | |
Total property, plant and equipment, gross | $ 20,386 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of Assets and Liabilities from Discontinued Operations (Parenthetical) (Detail) - Discontinued Operations $ in Thousands | May 31, 2023 USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Receivables, allowances | $ 2,581 |
Other intangible assets, accumulated amortization | $ 38,894 |
Discontinued Operations - Sum_3
Discontinued Operations - Summary of Financial Results from Discontinued Operations of Worthington Steel (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Other income (expense): | |||
Net earnings attributable to noncontrolling interest | $ 20,507 | $ 83,106 | $ 59,382 |
Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net sales | 757,007 | 1,670,027 | 2,637,834 |
Cost of goods sold | 692,171 | 1,481,731 | 2,448,319 |
Gross profit | 64,836 | 188,296 | 189,515 |
Selling, general and administrative expense | 34,698 | 74,908 | 106,110 |
Impairment of long-lived assets | 1,401 | 312 | |
Restructuring and other expense (income) | 1 | (4,204) | |
Separation costs | 4,042 | 18,521 | 12,021 |
Operating income | 26,095 | 93,466 | 75,276 |
Other income (expense): | |||
Miscellaneous income, net | 1,110 | 1,016 | 2,146 |
Interest expense, net | 1,849 | 3,706 | 6,557 |
Equity in net income of unconsolidated affiliate | (185) | 12,735 | 3,491 |
Earnings before income taxes | 25,171 | 103,511 | 74,356 |
Income tax expense | 4,664 | 20,405 | 14,974 |
Net earnings | 20,507 | 83,106 | 59,382 |
Net earnings attributable to noncontrolling interest | 3,933 | 7,460 | 8,382 |
Net earnings attributable to controlling interest | $ 16,574 | $ 75,646 | $ 51,000 |
Discontinued Operations - Sum_4
Discontinued Operations - Summary of Significant Non Cash Operating Items and Capital Expenditures of Discontinued Operations Included in Consolidated Statements of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | ||
Significant non-cash operating items: | |||||
Impairment of long-lived assets | $ 0 | $ 484 | $ 0 | $ 484 | |
Equity in income of unconsolidated affiliate | 2,926 | (23,218) | (3,169) | (84,415) | |
Net loss (gain) on sale of assets | (14) | 46 | (348) | (4,988) | |
Stock-based compensation | 2,602 | 4,975 | 13,294 | 13,758 | |
Significant investing activities: | |||||
Investment in property, plant and equipment | (10,017) | (22,748) | (72,191) | (68,715) | |
Acquisitions, net of cash acquired | (8,707) | (29,721) | (56,088) | ||
Significant financing activities: | |||||
Payment to related party | $ 218,048 | 218,048 | |||
Net proceeds from short-term borrowings | [1] | (1,330) | 172,187 | (44,392) | |
Discontinued Operations | |||||
Significant non-cash operating items: | |||||
Depreciation and amortization | 16,260 | 32,043 | 50,306 | ||
Impairment of long-lived assets | 1,401 | 312 | |||
Equity in income of unconsolidated affiliate | 10,185 | (12,734) | 6,509 | ||
Net loss (gain) on sale of assets | 46 | (412) | (3,778) | ||
Stock-based compensation | 1,211 | 3,472 | 3,340 | ||
Significant investing activities: | |||||
Investment in property, plant and equipment | $ (10,809) | (33,457) | $ (36,450) | ||
Acquisitions, net of cash acquired | (21,013) | ||||
Significant financing activities: | |||||
Net proceeds from short-term borrowings | $ 172,187 | ||||
[1] Net proceeds in the nine months ended February 29, 2024 consisted of borrowings under short-term credit facilities assumed by Worthington Steel in conjunction with the Separation. |
Inventory - Additional Informat
Inventory - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 29, 2024 | Nov. 30, 2023 |
Balloon Time Mini Helium Tanks | ||
Inventory [Line Items] | ||
Inventory obsolescence reserve | $ 3,000 | |
Europe | Propane Tanks | ||
Inventory [Line Items] | ||
Inventory obsolescence reserve | $ 1,900 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliates - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Aug. 03, 2022 | Nov. 30, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | May 31, 2023 | |
Investments in and Advances to Affiliates [Line Items] | |||||
Investments in unconsolidated affiliates | $ 120,707 | $ 138,041 | |||
Excess dividends received from investing activity | $ 1,085 | ||||
ArtiFlex | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of ownership interest held in unconsolidated affiliates | 50% | 50% | |||
Equity method investment sold amount after adjustments for closing debt and final net working capital | $ 35,795 | ||||
Pre-tax loss on sale of equity | $ 16,059 | $ 16,059 | |||
ClarkDietrich | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of ownership interest held in unconsolidated affiliates | 25% | ||||
Workhorse | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of ownership interest held in unconsolidated affiliates | 20% | ||||
Workhorse | Brazil | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Gain (Loss) on investments | $ 2,780 | ||||
Serviacero Worthington | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of ownership interest held in unconsolidated affiliates | 50% | ||||
Distributions from unconsolidated affiliates | $ 144,317 | ||||
WAVE | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of ownership interest held in unconsolidated affiliates | 50% | ||||
Investments in unconsolidated affiliates | $ 116,775 | $ 117,297 | |||
Excess dividends received from investing activity | $ 1,085 |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliates - Schedule of Combined Financial Information for Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 29, 2024 | Nov. 30, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 | Aug. 31, 2022 | Feb. 29, 2024 | Feb. 28, 2023 | May 31, 2023 | ||
Investments in and Advances to Affiliates [Line Items] | ||||||||||
Cash and cash equivalents | $ 227,310 | $ 227,310 | $ 422,268 | |||||||
Total assets | 1,704,689 | 1,704,689 | 3,650,918 | |||||||
Current liabilities | 202,288 | 202,288 | 717,558 | |||||||
Current maturities of long-term debt | 267 | 267 | 264 | |||||||
Long-term debt | 297,695 | 297,695 | 689,718 | |||||||
Other non-current liabilities | 76,300 | 76,300 | 71,766 | |||||||
Equity | 912,096 | 912,096 | 1,696,011 | |||||||
Total liabilities and equity | 1,704,689 | 1,704,689 | 3,650,918 | |||||||
Net sales | [1] | 316,755 | $ 346,315 | 926,902 | $ 1,049,694 | |||||
Gross profit | 73,112 | 78,971 | 206,020 | 229,428 | ||||||
Operating income | 4,281 | 4,000 | (17,411) | 14,518 | ||||||
Depreciation and amortization | 11,949 | 28,153 | 68,281 | 84,508 | ||||||
Income tax expense | 18,471 | 7,391 | 34,041 | 20,709 | ||||||
Net earnings | 22,000 | $ 28,167 | $ 99,703 | 50,258 | $ 19,505 | $ 65,244 | 149,869 | 135,007 | ||
Equity Method Investment, Nonconsolidated Investee, Other | ||||||||||
Investments in and Advances to Affiliates [Line Items] | ||||||||||
Cash and cash equivalents | 86,533 | 86,533 | 36,988 | |||||||
Other current assets | 574,099 | 574,099 | 661,700 | |||||||
Non-current assets | 324,793 | 324,793 | 335,567 | |||||||
Total assets | 985,425 | 985,425 | 1,034,255 | |||||||
Current liabilities | 312,235 | 312,235 | 176,959 | |||||||
Current maturities of long-term debt | 20,500 | 20,500 | 36,936 | |||||||
Long-term debt | 349,377 | 349,377 | 349,215 | |||||||
Other non-current liabilities | 137,275 | 137,275 | 139,228 | |||||||
Equity | 166,038 | 166,038 | 331,917 | |||||||
Total liabilities and equity | 985,425 | 985,425 | $ 1,034,255 | |||||||
Net sales | 497,938 | 511,663 | 1,579,992 | 1,727,225 | ||||||
Gross profit | 171,497 | 154,980 | 492,812 | 467,664 | ||||||
Operating income | 126,377 | 115,286 | 376,782 | 349,925 | ||||||
Depreciation and amortization | 6,936 | 5,662 | 21,737 | 18,559 | ||||||
Interest expense | 4,943 | 4,476 | 15,220 | 10,920 | ||||||
Income tax expense | 549 | 791 | 1,900 | 1,604 | ||||||
Net earnings | $ 119,982 | $ 111,505 | $ 360,748 | $ 342,574 | ||||||
[1] A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. |
Impairment of Long-Lived Asse_2
Impairment of Long-Lived Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | ||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Impairment charge of long-lived assets | [1] | $ 484 | $ 484 | ||||||
Adjusted EBITDA | $ 40,471 | 37,142 | $ 100,804 | 96,334 | |||||
Sustainable Energy Solutions | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Adjusted EBITDA | $ (2,667) | [2] | 212 | [3],[4] | $ (6,434) | [1],[2],[3],[4],[5] | 2,932 | [2],[3],[4] | |
Capital Project | Building Products Facility | Jefferson | |||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | |||||||||
Impairment charge of long-lived assets | 484 | ||||||||
Estimated salvage value | $ 70 | $ 70 | |||||||
[1] A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. Excludes pre-tax charges of $ 8,103 and $ 4,774 from separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. Excludes the following items reflected in Equity Income in our consolidated statements of earnings: • For the nine months ended February 29, 2024, our share of the gain realized by our engineered cabs joint venture, Workhorse, in connection with the sale of the joint venture’s operations in Brazil, which totaled $ 2,780 on a pre-tax basis. • For the nine months ended February 28, 2023, the loss realized in connection with the August 3, 2022, sale of our then 50 % noncontrolling equity investment in ArtiFlex, or $ 16,059 on a pre-tax basis, including $ 300 of transaction costs during the three months ended February 28, 2023. Reflects reductions in certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to Worthington Steel but did not meet the requirements to be presented as discontinued operations. Excludes a pre-tax loss of $ 1,534 realized in connection with the July 28, 2023, early redemption of the 2026 Notes. The loss resulted primarily from unamortized issuance costs and discount included in the carrying amount of the 2026 Notes and the acceleration of the remaining unamortized loss in equity related to a treasury lock derivative instrument executed in connection with the issuance of the 2026 Notes. |
Restructuring and Other Incom_3
Restructuring and Other Income, Net - Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Income, Net (Detail) - Early Retirement And Severance $ in Thousands | 9 Months Ended |
Feb. 29, 2024 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Beginning Balance | $ 135 |
Expense | 704 |
Payments | (253) |
Ending Balance | $ 586 |
Guarantees - Additional Informa
Guarantees - Additional Information (Detail) | 9 Months Ended |
Feb. 29, 2024 USD ($) | |
Stand-by Letters of Credit | |
Guarantor Obligations [Line Items] | |
Letter of credit amount outstanding | $ 12,137,000 |
Drawn amount of letter of credit outstanding | 0 |
Operating Lease of Aircraft | |
Guarantor Obligations [Line Items] | |
Maximum potential obligation | $ 15,796,000 |
Debt and Receivables Securiti_3
Debt and Receivables Securitization - Summary of Long-term Debt and Short-term Borrowings Outstanding (Detail) - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 |
Debt Instrument [Line Items] | ||
Total debt | $ 299,348 | $ 692,163 |
Unamortized discount and debt issuance costs | (1,386) | (2,181) |
Total debt, net | 297,962 | 689,982 |
Less: current maturities and short-term borrowings | 267 | 264 |
Total long-term debt | 297,695 | 689,718 |
2024 Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 150,000 | |
2026 Notes | ||
Debt Instrument [Line Items] | ||
Senior notes | 243,623 | |
4.30% Senior Notes due August 1, 2032 | ||
Debt Instrument [Line Items] | ||
Senior notes | 200,000 | 200,000 |
2.06% Series A Senior Note due August 23, 2031 | ||
Debt Instrument [Line Items] | ||
Senior notes | 39,654 | 39,226 |
2.40% Series B Senior Notes due August 23, 2034 | ||
Debt Instrument [Line Items] | ||
Senior notes | 59,427 | 58,786 |
Other Debt | ||
Debt Instrument [Line Items] | ||
Debt | $ 267 | $ 528 |
Debt and Receivables Securiti_4
Debt and Receivables Securitization - Summary of Long-term Debt and Short-term Borrowings Outstanding (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended |
Feb. 29, 2024 | May 31, 2023 | |
4.30% Senior Notes due August 1, 2032 | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 4.30% | 4.30% |
Debt, maturity date | Aug. 01, 2032 | Aug. 01, 2032 |
2.06% Series A Senior Note due August 23, 2031 | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 2.06% | 2.06% |
Debt, maturity date | Aug. 23, 2031 | Aug. 23, 2031 |
2.40% Series B Senior Notes due August 23, 2034 | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 2.40% | 2.40% |
Debt, maturity date | Aug. 23, 2034 | Aug. 23, 2034 |
Debt and Receivables Securiti_5
Debt and Receivables Securitization - Maturities on Long-term Debt and Short-term Borrowings (Detail) $ in Thousands | Feb. 29, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2025 | $ 267 |
Thereafter | 299,081 |
Total | $ 299,348 |
Debt and Receivables Securiti_6
Debt and Receivables Securitization - Additional Information (Detail) - USD ($) | 9 Months Ended | ||||||
Sep. 27, 2023 | Sep. 26, 2023 | Jul. 28, 2023 | Feb. 29, 2024 | Jun. 29, 2023 | May 31, 2023 | May 19, 2022 | |
Debt And Receivables Securitization [Line Items] | |||||||
Long-term debt | $ 299,348,000 | ||||||
Non-cash loss recognised | (1,534,000) | ||||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net, Total | $ (1,386,000) | $ (2,181,000) | |||||
Line of credit facility, description | On September 27, 2023, we amended and restated the Credit Facility, extending the final maturity from August 20, 2026 to September 27, 2028, while keeping in place the $500,000 aggregate commitments under the Credit Facility. Borrowings under the Credit Facility have maturities of up to one year. We have the option to borrow at rates equal to an applicable margin over the Simple SOFR, the Prime Rate of PNC Bank, National Association or the Overnight Bank Funding Rate. | ||||||
Borrowings outstanding | $ 0 | ||||||
2026 Notes | |||||||
Debt And Receivables Securitization [Line Items] | |||||||
Principal amount | $ 243,623,000 | 6,377,000 | |||||
Long-term debt | $ 243,623,000 | ||||||
Non-cash loss recognised | $ 1,534,000 | ||||||
Unsecured Revolving Credit Facility | |||||||
Debt And Receivables Securitization [Line Items] | |||||||
Maximum borrowing capacity | $ 500,000,000 | ||||||
Maturity date | Sep. 27, 2028 | Aug. 20, 2026 | |||||
Remaining borrowing capacity | $ 500,000,000 | ||||||
Unsecured Revolving Credit Facility | Maximum | |||||||
Debt And Receivables Securitization [Line Items] | |||||||
Debt maturity period | 1 year | ||||||
AR Facility | |||||||
Debt And Receivables Securitization [Line Items] | |||||||
Maximum borrowing capacity | $ 175,000,000 | ||||||
Early termination, other similar fees and penalties paid | $ 0 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) - Summary of Tax Effects on Each Component of OCI (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2024 | Nov. 30, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 | Aug. 31, 2022 | Feb. 29, 2024 | Feb. 28, 2023 | |
Components Of Other Comprehensive Income Loss [Abstract] | ||||||||
Foreign currency translation, before tax | $ (615) | $ 1,421 | $ 1,555 | $ (7,549) | ||||
Foreign currency translation, tax | (85) | 142 | 88 | (131) | ||||
Foreign currency translation, net of tax | (700) | 1,563 | 1,643 | (7,680) | ||||
Pension liability adjustment, before tax | 8,927 | 415 | 8,927 | 4,155 | ||||
Pension liability adjustment, tax | (2,122) | (92) | (2,125) | (975) | ||||
Pension liability adjustment | 6,805 | 323 | 6,802 | 3,180 | ||||
Cash flow hedges, before tax | 564 | 43,963 | 9,140 | 21,201 | ||||
Cash flow hedges, tax | (346) | (9,621) | (2,224) | (4,159) | ||||
Cash flow hedges, net of tax | 218 | 34,342 | 6,916 | 17,042 | ||||
Other comprehensive income (loss), before tax | 8,876 | 45,799 | 19,622 | 17,807 | ||||
Other comprehensive income (loss), tax | (2,553) | (9,571) | (4,261) | (5,265) | ||||
Other comprehensive income (loss) | $ 6,323 | $ 14,446 | $ (5,408) | $ 36,228 | $ (3,224) | $ (20,462) | $ 15,361 | $ 12,542 |
Changes in Equity - Summary of
Changes in Equity - Summary of Changes in Equity by Component and in Total (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2024 | Nov. 30, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Nov. 30, 2022 | Aug. 31, 2022 | Feb. 29, 2024 | Feb. 28, 2023 | |
Balance | $ 1,923,967 | $ 1,901,916 | $ 1,821,628 | $ 1,639,292 | $ 1,646,972 | $ 1,613,962 | $ 1,821,628 | $ 1,613,962 |
Net earnings | 22,000 | 28,167 | 99,703 | 50,258 | 19,505 | 65,244 | 149,869 | 135,007 |
Other comprehensive (loss) income | 6,323 | 14,446 | (5,408) | 36,228 | (3,224) | (20,462) | 15,361 | 12,542 |
Common shares issued, net of withholding tax | (1,023) | (9,207) | (5,130) | 704 | (649) | (3,466) | ||
Common shares in non-qualified plans | 53 | 195 | 130 | 107 | 298 | 136 | ||
Stock-based compensation | 2,071 | 4,511 | 8,995 | 3,818 | 3,620 | 6,976 | ||
Separation of Worthington Steel | (1,030,899) | |||||||
Cash dividends declared | (8,050) | (16,061) | (16,081) | (15,149) | (15,470) | (15,418) | ||
Dividends to noncontrolling interests | (1,921) | (11,760) | ||||||
Balance | 914,442 | 1,923,967 | 1,901,916 | 1,715,258 | 1,639,292 | 1,646,972 | 914,442 | 1,715,258 |
Additional Paid-in Capital | ||||||||
Balance | 290,293 | 294,794 | 290,799 | 280,354 | 277,085 | 273,439 | 290,799 | 273,439 |
Common shares issued, net of withholding tax | (1,023) | (9,207) | (5,130) | 704 | (649) | (3,466) | ||
Common shares in non-qualified plans | 53 | 195 | 130 | 107 | 298 | 136 | ||
Stock-based compensation | 2,071 | 4,511 | 8,995 | 3,818 | 3,620 | 6,976 | ||
Balance | 291,394 | 290,293 | 294,794 | 284,983 | 280,354 | 277,085 | 291,394 | 284,983 |
AOCI, Net of Tax | ||||||||
Balance | (14,141) | (28,587) | (23,179) | (46,536) | (43,312) | (22,850) | (23,179) | (22,850) |
Other comprehensive (loss) income | 6,323 | 14,446 | (5,408) | 36,228 | (3,224) | (20,462) | ||
Separation of Worthington Steel | (717) | (717) | ||||||
Balance | (8,535) | (14,141) | (28,587) | (10,308) | (46,536) | (43,312) | (8,535) | (10,308) |
Retained Earnings | ||||||||
Balance | 1,516,657 | 1,508,416 | 1,428,391 | 1,279,575 | 1,278,827 | 1,230,163 | 1,428,391 | 1,230,163 |
Net earnings | 22,000 | 24,302 | 96,106 | 46,325 | 16,218 | 64,082 | ||
Separation of Worthington Steel | (901,370) | |||||||
Cash dividends declared | (8,050) | (16,061) | (16,081) | (15,149) | (15,470) | (15,418) | ||
Balance | 629,237 | 1,516,657 | 1,508,416 | 1,310,751 | 1,279,575 | 1,278,827 | 629,237 | 1,310,751 |
Parent | ||||||||
Balance | 1,792,809 | 1,774,623 | 1,696,011 | 1,513,393 | 1,512,600 | 1,480,752 | 1,696,011 | 1,480,752 |
Net earnings | 22,000 | 24,302 | 96,106 | 46,325 | 16,218 | 64,082 | ||
Other comprehensive (loss) income | 6,323 | 14,446 | (5,408) | 36,228 | (3,224) | (20,462) | ||
Common shares issued, net of withholding tax | (1,023) | (9,207) | (5,130) | 704 | (649) | (3,466) | ||
Common shares in non-qualified plans | 53 | 195 | 130 | 107 | 298 | 136 | ||
Stock-based compensation | 2,071 | 4,511 | 8,995 | 3,818 | 3,620 | 6,976 | ||
Separation of Worthington Steel | (902,087) | |||||||
Cash dividends declared | (8,050) | (16,061) | (16,081) | (15,149) | (15,470) | (15,418) | ||
Balance | 912,096 | 1,792,809 | 1,774,623 | 1,585,426 | 1,513,393 | 1,512,600 | 912,096 | 1,585,426 |
Noncontrolling Interest | ||||||||
Balance | 131,158 | 127,293 | 125,617 | 125,899 | 134,372 | 133,210 | 125,617 | 133,210 |
Net earnings | 3,865 | 3,597 | 3,933 | 3,287 | 1,162 | |||
Separation of Worthington Steel | (128,812) | |||||||
Dividends to noncontrolling interests | (1,921) | (11,760) | ||||||
Balance | $ 2,346 | $ 131,158 | $ 127,293 | $ 129,832 | $ 125,899 | $ 134,372 | $ 2,346 | $ 129,832 |
Changes in Equity - Summary o_2
Changes in Equity - Summary of Changes in AOCI (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | ||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | $ 1,923,967 | $ 1,639,292 | $ 1,821,628 | $ 1,613,962 | |
Income tax effect | (2,553) | (9,571) | (4,261) | (5,265) | |
Separation of Worthington Steel | (1,030,899) | ||||
Balance | 914,442 | 1,715,258 | 914,442 | 1,715,258 | |
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (22,123) | (15,310) | |||
Other comprehensive income (loss) before reclassifications | 1,555 | (7,549) | |||
Income tax effect | 88 | (131) | |||
Separation of Worthington Steel | 10,874 | ||||
Balance | (9,606) | (22,990) | (9,606) | (22,990) | |
Pension Liability Adjustment | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (1,730) | (6,244) | |||
Other comprehensive income (loss) before reclassifications | 60 | (619) | |||
Reclassification adjustments to net earnings | [1],[2] | 8,867 | 4,774 | ||
Income tax effect | (2,125) | (975) | |||
Separation of Worthington Steel | (5,984) | ||||
Balance | (912) | (3,064) | (912) | (3,064) | |
Cash Flow Hedges | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | 674 | (1,296) | |||
Other comprehensive income (loss) before reclassifications | 14,893 | (2,999) | |||
Reclassification adjustments to net earnings | [1],[2] | (5,753) | 24,200 | ||
Income tax effect | (2,224) | (4,159) | |||
Separation of Worthington Steel | (5,607) | ||||
Balance | 1,983 | (15,746) | 1,983 | (15,746) | |
AOCI | |||||
Accumulated Other Comprehensive Income Loss [Line Items] | |||||
Balance | (14,141) | (46,536) | (23,179) | (22,850) | |
Other comprehensive income (loss) before reclassifications | 16,508 | (11,167) | |||
Reclassification adjustments to net earnings | [1],[2] | 3,114 | 28,974 | ||
Income tax effect | (4,261) | (5,265) | |||
Separation of Worthington Steel | (717) | (717) | |||
Balance | $ (8,535) | $ (10,308) | $ (8,535) | $ (10,308) | |
[1] Cash flow hedges – Disclosure of reclassification adjustments classified within continuing operations is provided in “Note Q – Derivative Financial Instruments and Hedging Activities.” The residual amount relates to Worthington Steel and has been presented within discontinued operations. Pension liability adjustment – Reflects the acceleration of deferred pension costs in AOCI related to separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) shares in Thousands | 9 Months Ended | |
Feb. 29, 2024 $ / shares shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, Beginning Balance | 573 | |
Converted to Worthington Steel common shares | (61) | [1] |
Separation related adjustment | 254 | |
Granted | 58 | |
Exercised | (126) | |
Forfeited | (7) | |
Outstanding, Ending Balance | 691 | |
Weighted Average Exercise Price | ||
Outstanding, Beginning Balance | $ / shares | $ 42.61 | |
Converted to Worthington Steel common shares | $ / shares | 51.44 | [1] |
Granted | $ / shares | 68.68 | |
Exercised | $ / shares | 39.73 | |
Forfeited | $ / shares | 45.91 | |
Outstanding, Ending Balance | $ / shares | $ 28.83 | |
[1] Effective as of the Distribution, each outstanding stock option held by a then-current or former employee or service provider of Worthington Steel was converted into a stock option denominated in the common shares of Worthington Steel. |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-qualified stock options, granted | 58,000 | |||
Non-qualified stock option, per share weighted average price | $ 68.68 | |||
Pre-tax stock-based compensation expense | $ 2,602 | $ 4,975 | $ 13,294 | $ 13,758 |
Non-Qualified Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-qualified stock options, granted | 58,000 | |||
Non-qualified stock option, weighted average fair value, per share price | $ 25.61 | |||
Pre-tax stock-based compensation, period of recognition | 3 years | |||
Pre-tax stock-based compensation expense | $ 1,485 | |||
Service-Based Restricted Common Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation, period of recognition | 3 years | |||
Pre-tax stock-based compensation expense | $ 13,831 | |||
Restricted common shares, granted | 214,000 | |||
Restricted common shares, fair value per share | $ 64.57 | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted common shares, granted | 113,000 | |||
Restricted common shares, fair value per share | $ 52.73 | |||
Pre-tax stock-based compensation, period of recognition | 3 years |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions To Value Stock Options (Detail) - Non-Qualified Stock Options | 9 Months Ended |
Feb. 29, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 2.34% |
Expected volatility | 42.62% |
Risk-free interest rate | 4.04% |
Expected term (years) | 6 years |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Service-Based Restricted Common Shares (Detail) - Service-Based Restricted Common Shares shares in Thousands | 9 Months Ended | |
Feb. 29, 2024 $ / shares shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, Beginning Balance | 800 | |
Converted to Worthington Steel common shares | (296) | [1] |
Separation related adjustment | 220 | |
Granted | 214 | |
Vested | (337) | |
Forfeited | (20) | |
Outstanding, Ending Balance | 581 | |
Weighted Average Grant Date Fair Value | ||
Outstanding, Beginning Balance | $ / shares | $ 47.39 | |
Converted to Worthington Steel common shares | $ / shares | 55.7 | [1] |
Granted | $ / shares | 64.57 | |
Vested | $ / shares | 39.17 | |
Forfeited | $ / shares | 47.07 | |
Outstanding, Ending Balance | $ / shares | $ 36.34 | |
[1] Effective as of the Distribution, each restricted stock award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel common shares. |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Performance Activity (Detail) - Performance Shares shares in Thousands | 9 Months Ended | |
Feb. 29, 2024 $ / shares shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding, Beginning Balance | 172 | |
Converted to Worthington Steel common shares | (39) | [1] |
Separation related adjustment | 58 | |
Granted | 113 | |
Vested | (131) | |
Forfeited | (25) | |
Outstanding, Ending Balance | 148 | |
Weighted Average Grant Date Fair Value | ||
Outstanding, Beginning Balance | $ / shares | $ 46.37 | |
Converted to Worthington Steel common shares | $ / shares | 56.99 | [1] |
Granted | $ / shares | 52.73 | |
Vested | $ / shares | 39.93 | |
Forfeited | $ / shares | 36.02 | |
Outstanding, Ending Balance | $ / shares | $ 37.7 | |
[1] Effective as of the Distribution, each performance share award held by an employee or director of Worthington Steel was converted into a restricted stock award covering Worthington Steel shares. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 9 Months Ended | |
Feb. 29, 2024 | Feb. 28, 2023 | |
Income Tax Disclosure [Abstract] | ||
Estimated annual effective income tax rate | 30.80% | 22.60% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share Attributable to Controlling Interest (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Numerator (basic & diluted): | ||||
Net earnings from continuing operations | $ 22,000 | $ 29,751 | $ 66,763 | $ 75,625 |
Denominator: | ||||
Denominator for basic EPS from continuing operations - weighted average common shares | 49,315 | 48,587 | 49,113 | 48,541 |
Effect of dilutive securities | 1,102 | 906 | 1,158 | 815 |
Denominator for diluted EPS from continuing operations - Weighted average common shares | 50,417 | 49,493 | 50,271 | 49,356 |
Basic EPS from continuing operations | $ 0.45 | $ 0.61 | $ 1.36 | $ 1.56 |
Diluted EPS from continuing operations | $ 0.44 | $ 0.6 | $ 1.33 | $ 1.53 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Earnings Per Share [Abstract] | ||||
Shares excluded from computation of diluted earnings per share | 55 | 94 | 61 | 89 |
Segment Operations - Additional
Segment Operations - Additional Information (Detail) | 9 Months Ended |
Feb. 29, 2024 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment Operations - Financial
Segment Operations - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | May 31, 2023 | ||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | [1] | $ 316,755 | $ 346,315 | $ 926,902 | $ 1,049,694 | |||||
Impairment of long-lived assets | [1] | 484 | 484 | |||||||
Restructuring and other expense (income), net | [1] | 698 | 823 | 704 | (354) | |||||
Separation costs | [1] | 2,999 | 2,305 | 12,465 | 3,572 | |||||
Miscellaneous income (expense), net | [1] | (6,995) | 217 | (5,983) | (4,499) | |||||
Loss on extinguishment of debt | 1,534 | |||||||||
Equity income | [1] | 43,235 | 37,111 | 127,328 | 102,004 | |||||
Adjusted EBITDA | 40,471 | 37,142 | 100,804 | 96,334 | ||||||
Total assets of continuing operations | 1,704,689 | 1,704,689 | $ 3,650,918 | |||||||
Continuing Operations | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Total assets of continuing operations | 1,704,689 | 1,704,689 | 1,890,122 | |||||||
Consumer products | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 133,181 | 130,684 | 369,923 | 406,479 | ||||||
Restructuring and other expense (income), net | 206 | 206 | ||||||||
Miscellaneous income (expense), net | 12 | (12) | 49 | (78) | ||||||
Adjusted EBITDA | 25,649 | [2] | 21,100 | [3],[4] | 52,537 | [1],[2],[3],[4],[5] | 67,846 | [2],[3],[4] | ||
Total assets of continuing operations | 566,715 | 566,715 | 544,911 | |||||||
Building Products | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 148,190 | 183,839 | 465,421 | 542,536 | ||||||
Impairment of long-lived assets | 484 | 484 | ||||||||
Restructuring and other expense (income), net | 84 | 617 | 84 | 617 | ||||||
Miscellaneous income (expense), net | 154 | 122 | 452 | 405 | ||||||
Equity income | 43,813 | 37,836 | 124,032 | 116,809 | ||||||
Adjusted EBITDA | 53,059 | [2] | 58,097 | [3],[4] | 158,501 | [1],[2],[3],[4],[5] | 157,458 | [2],[3],[4] | ||
Total assets of continuing operations | 678,699 | 678,699 | 706,169 | |||||||
Sustainable Energy Solutions | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Net sales | 35,384 | 31,792 | 91,558 | 100,679 | ||||||
Miscellaneous income (expense), net | 328 | (37) | 1,165 | 19 | ||||||
Adjusted EBITDA | (2,667) | [2] | 212 | [3],[4] | (6,434) | [1],[2],[3],[4],[5] | 2,932 | [2],[3],[4] | ||
Total assets of continuing operations | 144,543 | 144,543 | 129,872 | |||||||
Unallocated Corporate and Other | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Restructuring and other expense (income), net | 614 | 620 | (1,177) | |||||||
Separation costs | 2,999 | 2,305 | 12,465 | 3,572 | ||||||
Miscellaneous income (expense), net | (7,489) | 144 | (7,649) | (4,845) | ||||||
Loss on extinguishment of debt | (1,534) | |||||||||
Equity income | (578) | (725) | 3,296 | (14,805) | ||||||
Adjusted EBITDA | (9,170) | [2] | (9,193) | [3],[4] | (16,775) | [1],[2],[3],[4],[5] | (15,948) | [2],[3],[4] | ||
Total assets of continuing operations | 314,732 | 314,732 | $ 509,170 | |||||||
Consolidated | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Loss on extinguishment of debt | [1] | (1,534) | ||||||||
Adjusted EBITDA | [1] | $ 66,871 | [2] | $ 70,216 | [3],[4] | $ 187,829 | [2],[3],[4],[5] | $ 212,288 | [2],[3],[4] | |
[1] A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. Excludes pre-tax charges of $ 8,103 and $ 4,774 from separate pension lift-out transactions completed in February 2024 and August 2022, respectively, to transfer the pension benefit obligation under The Gerstenslager Company Bargaining Unit Employees’ Pension Plan to third-party insurance companies. Excludes the following items reflected in Equity Income in our consolidated statements of earnings: • For the nine months ended February 29, 2024, our share of the gain realized by our engineered cabs joint venture, Workhorse, in connection with the sale of the joint venture’s operations in Brazil, which totaled $ 2,780 on a pre-tax basis. • For the nine months ended February 28, 2023, the loss realized in connection with the August 3, 2022, sale of our then 50 % noncontrolling equity investment in ArtiFlex, or $ 16,059 on a pre-tax basis, including $ 300 of transaction costs during the three months ended February 28, 2023. Reflects reductions in certain corporate overhead costs that no longer exist post-Separation. These costs were included in continuing operations as they represent general corporate overhead that was historically allocated to Worthington Steel but did not meet the requirements to be presented as discontinued operations. Excludes a pre-tax loss of $ 1,534 realized in connection with the July 28, 2023, early redemption of the 2026 Notes. The loss resulted primarily from unamortized issuance costs and discount included in the carrying amount of the 2026 Notes and the acceleration of the remaining unamortized loss in equity related to a treasury lock derivative instrument executed in connection with the issuance of the 2026 Notes. |
Segment Operations - Financia_2
Segment Operations - Financial Information for Reportable Segments (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 28, 2023 | Aug. 03, 2022 | Feb. 28, 2023 | Aug. 31, 2022 | Feb. 29, 2024 | Feb. 28, 2023 | |
Segment Reporting Information [Line Items] | ||||||
Pre-tax charges | $ 4,774 | $ 8,103 | ||||
Pre-tax gain on sale of joint venture facility | $ 2,780 | |||||
Pre-tax loss on early redemption of 2026 notes | $ 1,534 | |||||
ArtiFlex | ||||||
Segment Reporting Information [Line Items] | ||||||
Loss on sale of equity investments | $ 16,059 | $ 16,059 | ||||
Transaction costs related to sale | $ 300 | |||||
Noncontrolling equity investment | 50% | 50% | 50% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Feb. 01, 2024 | Jun. 02, 2022 |
HPG | ||
Business Acquisition [Line Items] | ||
Percent of controlling interest by the Company | 80% | |
Percent of noncontrolling interest | 20% | |
Purchase price | $ 9,386 | |
Customer overpayment held back at closing | $ 679 | |
Level5 Tools, LLC | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 59,472 | |
Earnout payment | 2,000 | |
Potential earn out payment | 25,000 | |
Level5 Tools, LLC | Earnout Agreement | ||
Business Acquisition [Line Items] | ||
Purchase price | 59,321 | |
Earnout payment | 2,000 | |
Level5 Tools, LLC | Preliminary Valuation | ||
Business Acquisition [Line Items] | ||
Purchase price | 59,321 | |
Earnout payment | $ 2,000 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition of Identifiable Intangible Assets (Detail) - USD ($) $ in Thousands | Feb. 01, 2024 | Jun. 02, 2022 |
Halo | ||
Business Acquisition [Line Items] | ||
Acquired indefinite lived intangible assets | $ 4,500 | |
Halo | Trade Name | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 10 years | |
Acquired indefinite lived intangible assets | $ 3,500 | |
Halo | Product Design/Know-How | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 8 years | |
Acquired indefinite lived intangible assets | $ 800 | |
Halo | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 8 years | |
Acquired indefinite lived intangible assets | $ 200 | |
Level5 Tools, LLC | ||
Business Acquisition [Line Items] | ||
Total acquired identifiable intangible assets | $ 33,580 | |
Acquired indefinite lived intangible assets | 33,580 | |
Level5 Tools, LLC | Trade Name | ||
Business Acquisition [Line Items] | ||
Acquired indefinite lived intangible assets | $ 13,500 | |
Level5 Tools, LLC | Customer Relationships | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 10 years | |
Acquired indefinite lived intangible assets | $ 13,300 | |
Level5 Tools, LLC | Technological Know How | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 20 years | |
Acquired indefinite lived intangible assets | $ 6,500 | |
Level5 Tools, LLC | Non Compete Agreement | ||
Business Acquisition [Line Items] | ||
Useful Life (Years) | 3 years | |
Acquired indefinite lived intangible assets | $ 280 |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred and the Preliminary Fair Value Assigned to Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Feb. 01, 2024 | Jun. 02, 2022 | Feb. 29, 2024 | May 31, 2023 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 345,445 | $ 336,178 | ||
Halo | Preliminary Valuation | ||||
Business Acquisition [Line Items] | ||||
Accounts receivable | $ 88 | |||
Inventories | 5,511 | |||
Property, plant and equipment | 1,732 | |||
Intangible assets | 4,500 | |||
Total identifiable assets | 11,831 | |||
Accounts payable | (7,293) | |||
Other accrued items | (1,099) | |||
Net identifiable assets | 3,439 | |||
Goodwill | 8,294 | |||
Net assets | 11,733 | |||
Noncontrolling interest | (2,347) | |||
Total purchase price | $ 9,386 | |||
Level5 Tools, LLC | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 1,515 | |||
Accounts receivable | 2,860 | |||
Inventories | 9,161 | |||
Prepaid expenses | 64 | |||
Property, plant and equipment | 273 | |||
Intangible assets | 33,580 | |||
Operating lease assets | 377 | |||
Total identifiable assets | 47,830 | |||
Accounts payable | (3,175) | |||
Accrued expenses | (753) | |||
Current operating lease liabilities | (111) | |||
Noncurrent operating lease liabilities | (266) | |||
Net identifiable assets | 43,525 | |||
Goodwill | 15,947 | |||
Total purchase price | 59,472 | |||
Less: Fair value of earnout | (2,000) | |||
Plus: Net working capital deficit | 131 | |||
Cash purchase price | 57,603 | |||
Level5 Tools, LLC | Preliminary Valuation | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 1,515 | |||
Accounts receivable | 2,860 | |||
Inventories | 9,161 | |||
Prepaid expenses | 64 | |||
Property, plant and equipment | 273 | |||
Intangible assets | 33,580 | |||
Operating lease assets | 377 | |||
Total identifiable assets | 47,830 | |||
Accounts payable | (3,175) | |||
Accrued expenses | (904) | |||
Current operating lease liabilities | (111) | |||
Noncurrent operating lease liabilities | (266) | |||
Net identifiable assets | 43,374 | |||
Goodwill | 15,947 | |||
Total purchase price | 59,321 | |||
Less: Fair value of earnout | (2,000) | |||
Plus: Net working capital deficit | 282 | |||
Cash purchase price | 57,603 | |||
Level5 Tools, LLC | Measurement Period Adjustments | ||||
Business Acquisition [Line Items] | ||||
Accrued expenses | 151 | |||
Net identifiable assets | 151 | |||
Total purchase price | 151 | |||
Plus: Net working capital deficit | $ (151) |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Schedule of Fair Value of Derivative Instruments (Detail) - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 |
Derivative [Line Items] | ||
Fair Value of Assets | $ 1,398 | $ 314 |
Fair Value of Liabilities | 563 | 5,948 |
Derivatives Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Fair Value of Assets | 1,090 | 20 |
Fair Value of Liabilities | 115 | 4,339 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Fair Value of Liabilities | 115 | 4,069 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Fair Value of Assets | 1,064 | 20 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Other Assets | ||
Derivative [Line Items] | ||
Fair Value of Assets | 26 | |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Other Liabilities | ||
Derivative [Line Items] | ||
Fair Value of Liabilities | 237 | |
Derivatives Designated As Hedging Instruments | Foreign Currency Exchange Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Fair Value of Liabilities | 33 | |
Derivatives Not Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Fair Value of Assets | 308 | 294 |
Fair Value of Liabilities | 448 | 1,609 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Fair Value of Liabilities | 445 | 1,609 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Fair Value of Assets | 308 | $ 294 |
Derivatives Not Designated As Hedging Instruments | Foreign Currency Exchange Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Fair Value of Liabilities | $ 3 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Feb. 29, 2024 | May 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Impact to fair value of derivative assets and liabilities as a result of recognition on a gross basis | $ 174 | $ 272 |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings | 903 | |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings, tax | $ 232 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Schedule of Summary of Derivative Hedges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Derivative [Line Items] | ||||
Notional Amount | $ 229 | $ 2,692 | $ (835) | $ 4,873 |
Commodity Contracts | Derivatives Not Designated As Hedging Instruments | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 1,648 | |||
Commodity Contracts | Minimum | Derivatives Not Designated As Hedging Instruments | ||||
Derivative [Line Items] | ||||
Maturity Date(s) | Mar. 31, 2024 | |||
Commodity Contracts | Maximum | Derivatives Not Designated As Hedging Instruments | ||||
Derivative [Line Items] | ||||
Maturity Date(s) | Dec. 31, 2024 | |||
Foreign Currency Exchange Contracts | Derivatives Not Designated As Hedging Instruments | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 7,034 | |||
Foreign Currency Exchange Contracts | Minimum | Derivatives Not Designated As Hedging Instruments | ||||
Derivative [Line Items] | ||||
Maturity Date(s) | Mar. 31, 2024 | |||
Cash Flow Hedges | Commodity Contracts | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 9,113 | $ 9,113 | ||
Cash Flow Hedges | Commodity Contracts | Minimum | ||||
Derivative [Line Items] | ||||
Maturity Date(s) | Mar. 31, 2024 | |||
Cash Flow Hedges | Commodity Contracts | Maximum | ||||
Derivative [Line Items] | ||||
Maturity Date(s) | Jun. 30, 2025 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Hedging Activities - Schedule of Derivative Financials Designated as Cash Flow Hedging Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in OCI | $ 1,944 | $ 7,159 | $ 3,542 | $ (7,646) |
Gain (Loss) Reclassified from AOCI into Net Earnings | 1,380 | (4,798) | (1,471) | (10,952) |
Commodity Contracts | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in OCI | 1,944 | |||
Gain (Loss) Reclassified from AOCI into Net Earnings | 1,328 | |||
Commodity Contracts | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in OCI | 7,093 | 3,553 | (7,770) | |
Gain (Loss) Reclassified from AOCI into Net Earnings | (4,858) | (921) | (10,925) | |
Interest Rate Contract | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI into Net Earnings | $ 52 | |||
Interest Rate Contract | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI into Net Earnings | (7) | (642) | (20) | |
Interest Rate Contracts | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from AOCI into Net Earnings | 136 | |||
Foreign Currency Exchange Contracts | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in OCI | 66 | (11) | 124 | |
Gain (Loss) Reclassified from AOCI into Net Earnings | $ 67 | $ (44) | $ (7) |
Derivative Financial Instrume_7
Derivative Financial Instruments and Hedging Activities - Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2024 | Feb. 28, 2023 | Feb. 29, 2024 | Feb. 28, 2023 | |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | $ 229 | $ 2,692 | $ (835) | $ 4,873 |
Commodity Contracts | Cost of Sales | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | 311 | 2,613 | (832) | 4,841 |
Foreign Currency Exchange Contracts | Miscellaneous Income, Net | Continuing Operations | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | $ (82) | $ 79 | $ (3) | $ 32 |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | $ 1,398 | $ 314 | |
Liabilities | 563 | 5,948 | |
Derivative Financial Instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 1,398 | |
Liabilities | [1] | 563 | |
Derivative Financial Instruments | Continuing Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 314 | |
Liabilities | [2] | 5,948 | |
Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 1,398 | 314 | |
Liabilities | 563 | 5,948 | |
Fair Value, Inputs, Level 2 | Derivative Financial Instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 1,398 | |
Liabilities | [1] | $ 563 | |
Fair Value, Inputs, Level 2 | Derivative Financial Instruments | Continuing Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 314 | |
Liabilities | [2] | $ 5,948 | |
[1] The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. The fair value of our derivative financial instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note Q – Derivative Financial Instruments and Hedging Activities ” for additional information regarding our use of derivative financial instruments. |
Fair Value - Assets Measured at
Fair Value - Assets Measured at Fair Value on Non-Recurring Basis (Detail) - Fair Value, Nonrecurring $ in Thousands | May 31, 2023 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets, Fair Value Disclosure | $ 70 |
Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets, Fair Value Disclosure | 70 |
Long Lived Assets Held and Used | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets, Fair Value Disclosure | 70 |
Long Lived Assets Held and Used | Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Assets, Fair Value Disclosure | $ 70 |
Fair Value - Assets Measured _2
Fair Value - Assets Measured at Fair Value on Non-Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2023 | Feb. 28, 2023 | May 31, 2023 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment charge of long-lived assets | [1] | $ 484 | $ 484 | |
Capital Project | Building Products Facility | Jefferson | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Estimated salvage value | $ 70 | |||
[1] A reconciliation of net earnings from continuing operations (the most comparable GAAP financial measure) to consolidated adjusted EBITDA is included in the MD&A “Results of Operations” section of this Form 10-Q for the respective three and nine months ended February 29, 2024 and February 28, 2023. |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - Long-term Debt - USD ($) $ in Thousands | Feb. 29, 2024 | May 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt at fair value including current maturities | $ 227,908 | $ 639,948 |
Long-term debt at carrying amount including current maturities | $ 297,962 | $ 689,982 |