Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Nov. 30, 2014 | Dec. 31, 2014 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Nov-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | WOR | |
Entity Registrant Name | WORTHINGTON INDUSTRIES INC | |
Entity Central Index Key | 108516 | |
Current Fiscal Year End Date | -26 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 68,029,037 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $96,537 | $190,079 |
Receivables, less allowances of $2,997 and $3,043 at November 30, 2014 and May 31, 2014, respectively | 491,687 | 493,127 |
Inventories: | ||
Raw materials | 236,126 | 213,173 |
Work in process | 118,796 | 105,872 |
Finished products | 99,853 | 90,957 |
Total inventories | 454,775 | 410,002 |
Income taxes receivable | 13,757 | 5,438 |
Assets held for sale | 28,264 | 32,235 |
Deferred income taxes | 23,064 | 24,272 |
Prepaid expenses and other current assets | 46,310 | 43,769 |
Total current assets | 1,154,394 | 1,198,922 |
Investments in unconsolidated affiliates | 194,686 | 179,113 |
Goodwill | 283,418 | 251,093 |
Other intangible assets, net of accumulated amortization of $45,500 and $35,506 at November 30, 2014 and May 31, 2014 | 150,534 | 145,993 |
Other assets | 22,450 | 22,399 |
Property, plant & equipment: | ||
Land | 15,238 | 15,260 |
Buildings and improvements | 218,801 | 213,848 |
Machinery and equipment | 853,219 | 848,889 |
Construction in progress | 43,115 | 32,135 |
Total property, plant & equipment | 1,130,373 | 1,110,132 |
Less: accumulated depreciation | 628,464 | 611,271 |
Property, plant and equipment, net | 501,909 | 498,861 |
Total assets | 2,307,391 | 2,296,381 |
Current liabilities: | ||
Accounts payable | 324,886 | 333,744 |
Short-term borrowings | 10,769 | 10,362 |
Accrued compensation, contributions to employee benefit plans and related taxes | 62,985 | 78,514 |
Dividends payable | 13,010 | 11,044 |
Other accrued items | 60,961 | 49,873 |
Income taxes payable | 4,396 | 4,953 |
Current maturities of long-term debt | 101,140 | 101,173 |
Total current liabilities | 578,147 | 589,663 |
Other liabilities | 62,297 | 76,426 |
Distributions in excess of investment in unconsolidated affiliate | 59,576 | 59,287 |
Long-term debt | 573,734 | 554,790 |
Deferred income taxes | 62,629 | 71,333 |
Total liabilities | 1,336,383 | 1,351,499 |
Shareholders' equity - controlling interest | 872,502 | 850,812 |
Noncontrolling interest | 98,506 | 94,070 |
Total equity | 971,008 | 944,882 |
Total liabilities and equity | $2,307,391 | $2,296,381 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Receivables, allowances | $2,997 | $3,043 |
Other intangible assets, accumulated amortization | $45,500 | $35,506 |
CONSOLIDATED_STATEMENTS_OF_EAR
CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Net sales | $871,012 | $769,900 | $1,733,426 | $1,462,191 |
Cost of goods sold | 745,789 | 641,668 | 1,478,696 | 1,222,995 |
Gross margin | 125,223 | 128,232 | 254,730 | 239,196 |
Selling, general and administrative expense | 77,308 | 78,395 | 152,563 | 149,935 |
Impairment of long-lived assets | 14,235 | 30,734 | 16,185 | 35,375 |
Restructuring and other expense (income) | 405 | -1,182 | 398 | -5,179 |
Joint venture transactions | 83 | 786 | 190 | 928 |
Operating income | 33,192 | 19,499 | 85,394 | 58,137 |
Other income (expense): | ||||
Miscellaneous income | 1,220 | 2,472 | 1,543 | 13,409 |
Interest expense | -9,676 | -6,258 | -19,192 | -12,498 |
Equity in net income of unconsolidated affiliates | 22,319 | 21,086 | 50,243 | 48,037 |
Earnings before income taxes | 47,055 | 36,799 | 117,988 | 107,085 |
Income tax expense | 15,600 | 8,459 | 37,713 | 22,392 |
Net earnings | 31,455 | 28,340 | 80,275 | 84,693 |
Net earnings attributable to noncontrolling interest | 1,993 | 5,363 | 6,645 | 7,159 |
Net earnings attributable to controlling interest | $29,462 | $22,977 | $73,630 | $77,534 |
Basic | ||||
Average common shares outstanding | 67,105 | 69,304 | 67,337 | 69,454 |
Earnings per share attributable to controlling interest | $0.44 | $0.33 | $1.09 | $1.12 |
Diluted | ||||
Average common shares outstanding | 69,181 | 71,826 | 69,780 | 72,089 |
Earnings per share attributable to controlling interest | $0.43 | $0.32 | $1.06 | $1.08 |
Common shares outstanding at end of period | 66,912 | 69,138 | 66,912 | 69,138 |
Cash dividends declared per share | $0.18 | $0.15 | $0.36 | $0.30 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Net earnings | $31,455 | $28,340 | $80,275 | $84,693 |
Other comprehensive income (loss): | ||||
Foreign currency translation | -7,270 | 3,037 | -16,862 | 2,551 |
Cash flow hedges, net of tax | -1,881 | 353 | -920 | 3,704 |
Other comprehensive income (loss) | -9,151 | 3,390 | -17,782 | 6,255 |
Comprehensive income | 22,304 | 31,730 | 62,493 | 90,948 |
Comprehensive income attributable to noncontrolling interest | 1,559 | 5,679 | 5,031 | 6,458 |
Comprehensive income attributable to controlling interest | $20,745 | $26,051 | $57,462 | $84,490 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Operating activities | ||||
Net earnings | $31,455 | $28,340 | $80,275 | $84,693 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation and amortization | 21,200 | 20,095 | 41,567 | 39,555 |
Impairment of long-lived assets | 14,235 | 30,734 | 16,185 | 35,375 |
Provision for deferred income taxes | -5,492 | -13,110 | -6,027 | -21,534 |
Bad debt expense (income) | 143 | 185 | -60 | -296 |
Equity in net income of unconsolidated affiliates, net of distributions | -813 | -3,506 | -7,803 | -9,421 |
Net loss (gain) on sale of assets and insurance | 2,370 | -7,188 | -460 | -11,850 |
Stock-based compensation | 4,498 | 4,722 | 8,853 | 8,502 |
Excess tax benefits - stock-based compensation | -621 | -1,534 | -5,753 | -5,832 |
Gain on previously held interest in TWB | -11,000 | |||
Changes in assets and liabilities, net of impact of acquisitions: | ||||
Receivables | -6,916 | 7,574 | 5,836 | 15,229 |
Inventories | 16,087 | -21,838 | -35,130 | -21,323 |
Prepaid expenses and other current assets | -5,232 | 4,072 | -8,104 | 1,707 |
Other assets | 3,095 | 139 | 3,216 | 575 |
Accounts payable and accrued expenses | -72,095 | -23,922 | -30,205 | 16,700 |
Other liabilities | -505 | 4,556 | -6,496 | 2,703 |
Net cash provided by operating activities | 1,409 | 29,319 | 55,894 | 123,783 |
Investing activities | ||||
Investment in property, plant and equipment | -23,273 | -17,060 | -47,146 | -30,414 |
Investment in notes receivable | -2,300 | -7,300 | ||
Acquisitions, net of cash acquired | -14,543 | 276 | -51,093 | 53,233 |
Distributions from (investments in) unconsolidated affiliates | 129 | 3,668 | -3,671 | 9,223 |
Proceeds from sale of assets and insurance | 921 | 16,086 | 1,186 | 23,733 |
Net cash provided (used) by investing activities | -39,066 | 2,970 | -108,024 | 55,775 |
Financing activities | ||||
Net proceeds from (repayments of) short-term borrowings | -196 | -18,736 | 359 | -70,277 |
Proceeds from long-term debt | 20,480 | 20,480 | ||
Principal payments on long-term debt | -511 | -285 | -813 | -569 |
Proceeds from (payments for) issuance of common shares | 566 | 4,286 | -454 | 6,487 |
Excess tax benefits - stock-based compensation | 621 | 1,534 | 5,753 | 5,832 |
Payments to noncontrolling interest | -875 | -2,867 | -2,638 | |
Repurchase of common shares | -21,549 | -19,800 | -41,620 | -50,316 |
Dividends paid | -12,138 | -10,407 | -22,250 | -10,407 |
Net cash used by financing activities | -12,727 | -44,283 | -41,412 | -121,888 |
Increase (decrease) in cash and cash equivalents | -50,384 | -11,994 | -93,542 | 57,670 |
Cash and cash equivalents at beginning of period | 146,921 | 121,049 | 190,079 | 51,385 |
Cash and cash equivalents at end of period | $96,537 | $109,055 | $96,537 | $109,055 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Nov. 30, 2014 | |
Basis of Presentation | NOTE A – Basis of Presentation |
The consolidated financial statements include the accounts of Worthington Industries, Inc. and consolidated subsidiaries (collectively, “we,” “our,” “Worthington,” or the “Company”). Investments in unconsolidated affiliates are accounted for using the equity method. Significant intercompany accounts and transactions are eliminated. | |
dHybrid Systems, LLC (“dHybrid”), Spartan Steel Coating, LLC (“Spartan”), TWB Company, L.L.C. (“TWB”), Worthington Arıtaş Basınçlı Kaplar Sanayi (“Worthington Aritas”), Worthington Energy Innovations, LLC (“WEI”), and Worthington Nitin Cylinders Limited (“Worthington Nitin Cylinders”) in which we own controlling interests of 79.59%, 52%, 55%, 75%, 75%, and 60%, respectively, are consolidated with the equity owned by the other joint venture members shown as noncontrolling interest in our consolidated balance sheets, and the other joint venture members’ portions of net earnings and other comprehensive income (loss) shown as net earnings or comprehensive income attributable to noncontrolling interest in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively. | |
These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by U.S. 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 Quarterly Report on Form 10-Q, necessary for a fair presentation of the results of operations of these interim periods, have been included. Operating results for the three and six months ended November 30, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2015 (“fiscal 2015”). For further information, refer to the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (“fiscal 2014”) of Worthington Industries, Inc. (the “2014 Form 10-K”). | |
The preparation of financial statements in conformity with U.S. 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 from those estimates. | |
Recently Issued Accounting Standards | |
In March 2013, amended accounting guidance was issued regarding the accounting for cumulative translation adjustment. The amended guidance specifies that a cumulative translation adjustment should be released from earnings when an entity ceases to have a controlling financial interest in a subsidiary or a group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the foreign entity. For sales of an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment attributable to the investment would be recognized in earnings upon sale of the investment. The amended guidance is effective prospectively for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2013. Early adoption is permitted. The adoption of this amended accounting guidance on June 1, 2014 did not have a material impact on our consolidated financial position or results of operations. | |
In May 2014, amended accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP. The amended guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The amended guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations. The amended guidance permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method nor have we determined the effect of the amended guidance on our ongoing financial reporting. |
Investments_in_Unconsolidated_
Investments in Unconsolidated Affiliates | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Investments in Unconsolidated Affiliates | NOTE B – Investments in Unconsolidated Affiliates | ||||||||||||||||
Our investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. These include ArtiFlex Manufacturing, LLC (“ArtiFlex”) (50%), Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”) (25%), Samuel Steel Pickling Company (31.25%), Serviacero Planos, S. de R. L. de C.V. (“Serviacero”) (50%), Worthington Armstrong Venture (“WAVE”) (50%), Worthington Specialty Processing (“WSP”) (51%), and Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd. (10%). WSP is considered to be jointly controlled and not consolidated due to substantive participating rights of the minority partner. | |||||||||||||||||
We received distributions from unconsolidated affiliates totaling $42,569,000 during the six months ended November 30, 2014. We have received cumulative distributions from WAVE in excess of our investment balance totaling $59,576,000 at November 30, 2014. In accordance with the applicable accounting guidance, these excess distributions are reclassified to the liabilities section of our consolidated balance sheet. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheet. If it becomes obvious that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any 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 six months ended November 30, 2014, we received excess distributions from ClarkDietrich of $129,000. | |||||||||||||||||
Combined financial information for our unconsolidated affiliates is summarized as follows: | |||||||||||||||||
(in thousands) | November 30, | May 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Cash | $ | 53,333 | $ | 52,997 | |||||||||||||
Receivable from member (1) | 8,635 | 12,717 | |||||||||||||||
Other current assets | 470,266 | 454,417 | |||||||||||||||
Noncurrent assets | 290,261 | 294,001 | |||||||||||||||
Total assets | $ | 822,495 | $ | 814,132 | |||||||||||||
Current liabilities | $ | 156,959 | $ | 128,595 | |||||||||||||
Short-term borrowings | 16,178 | 40,992 | |||||||||||||||
Current maturities of long-term debt | 4,460 | 4,510 | |||||||||||||||
Long-term debt | 266,107 | 268,350 | |||||||||||||||
Other noncurrent liabilities | 18,664 | 20,217 | |||||||||||||||
Equity | 360,127 | 351,468 | |||||||||||||||
Total liabilities and equity | $ | 822,495 | $ | 814,132 | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | $ | 388,712 | $ | 357,236 | $ | 781,262 | $ | 780,717 | |||||||||
Gross margin | 76,193 | 76,068 | 164,945 | 165,882 | |||||||||||||
Operating income | 49,864 | 51,532 | 113,343 | 116,072 | |||||||||||||
Depreciation and amortization | 8,983 | 9,104 | 18,105 | 19,441 | |||||||||||||
Interest expense | 2,173 | 2,233 | 4,335 | 4,456 | |||||||||||||
Income tax expense | 2,799 | 2,862 | 5,552 | 5,892 | |||||||||||||
Net earnings | 44,490 | 46,149 | 103,930 | 105,783 | |||||||||||||
-1 | Represents cash owed from a joint venture member as a result of centralized cash management. | ||||||||||||||||
The financial results of TWB have been included in the amounts presented in the tables above through July 31, 2013. On July 31, 2013, we completed the acquisition of an additional 10% interest in TWB. As a result, TWB’s results have been consolidated within Steel Processing since that date with the minority member’s portion of earnings eliminated within earnings attributable to noncontrolling interest. |
Impairment_of_LongLived_Assets
Impairment of Long-Lived Assets | 6 Months Ended |
Nov. 30, 2014 | |
Impairment of Long-Lived Assets | NOTE C – Impairment of Long-Lived Assets |
During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $3,221,000 during the three months ended November 30, 2014. | |
During the second quarter of fiscal 2015, management committed to a plan to sell certain non-core Engineered Cabs assets. As all of the criteria for classification as assets held for sale were met, the net assets of the business have been presented separately as assets held for sale in our consolidated balance sheet as of November 30, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $2,389,000 during the three months ended November 30, 2014. | |
During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s military construction business. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $1,179,000 during the three months ended November 30, 2014, which represents the remaining book value of the asset group. | |
During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company’s 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. As all of the criteria for classification as assets held for sale were met, the net assets of the business were presented separately as assets held for sale in our consolidated balance sheet as of May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale of Worthington Nitin Cylinders during the second quarter of fiscal 2015, the Company reassessed the fair value of the business and determined that the remaining book value should be written off resulting in an impairment charge of $6,346,000 during the three months ended November 30, 2014. | |
During the fourth quarter of fiscal 2014, management committed to a plan to sell certain non-core Steel Processing assets. As all of the criteria for classification as assets held for sale were met, the net assets of the business have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014 and May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale, the Company reassessed the fair value of the business resulting in additional impairment charges totaling $3,050,000 during the six months ended November 30, 2014. |
Restructuring_and_Other_Expens
Restructuring and Other Expense | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Restructuring and Other Expense | NOTE D – Restructuring and Other Expense | ||||||||||||||||||||
In fiscal 2008, we initiated a Transformation Plan (the “Transformation Plan”) with the overall goal to improve our sustainable earnings potential, asset utilization and operational performance. The Transformation Plan focuses on cost reduction, margin expansion and organizational capability improvements and, in the process, seeks to drive excellence in three core competencies: sales; operations; and supply chain management. The Transformation Plan is comprehensive in scope and includes aggressive diagnostic and implementation phases. When this process began, we retained a consulting firm to assist in the development and implementation of the Transformation Plan. As the Transformation Plan progressed, we formed internal teams dedicated to this effort, and they ultimately assumed full responsibility for executing the Transformation Plan. Although the consulting firm was again engaged as we rolled out the Transformation Plan in our Pressure Cylinders operating segment, most of the work is now being done by our internal teams. These internal teams are now an integral part of our business. The Transformation teams will continue to monitor performance metrics and new processes instituted across our transformed operations and drive continuous improvements in all areas of our operations. The expenses related to these teams have been included in selling, general and administrative (“SG&A”) expense since the beginning of fiscal 2013. | |||||||||||||||||||||
To date, we have completed the transformation phases in each of the core facilities within our Steel Processing operating segment, including the facilities of our Mexican joint venture, Serviacero. We also substantially completed the transformation phases at our metal framing facilities prior to their contribution to ClarkDietrich. Transformation efforts within our Pressure Cylinders and Engineered Cabs operating segments, which began during the first quarter of fiscal 2012 and the first quarter of fiscal 2013, respectively, are ongoing. | |||||||||||||||||||||
A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense financial statement caption in our consolidated statement of earnings for the six months ended November 30, 2014 is summarized as follows: | |||||||||||||||||||||
(in thousands) | Beginning | Expense | Payments | Adjustments | Ending | ||||||||||||||||
Balance | (Income) | Balance | |||||||||||||||||||
Early retirement and severance | $ | 6,495 | $ | (30 | ) | $ | (3,852 | ) | $ | 30 | $ | 2,643 | |||||||||
Facility exit and other costs | 534 | 618 | (932 | ) | 210 | 430 | |||||||||||||||
$ | 7,029 | 588 | $ | (4,784 | ) | $ | 240 | $ | 3,073 | ||||||||||||
Less: joint venture transactions | (190 | ) | |||||||||||||||||||
Restructuring and other expense | $ | 398 | |||||||||||||||||||
Approximately $2,753,000 of the total liability as of November 30, 2014 is expected to be paid in the next twelve months. The remaining liability, which consists of lease termination costs and certain severance benefits, will be paid through September 2016. |
Contingent_Liabilities
Contingent Liabilities | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Contingent Liabilities | NOTE E – Contingent Liabilities | ||||
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 believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations. | |||||
Insurance Recoveries | |||||
On August 19, 2013, a fire occurred at our Pressure Cylinders facility in Kienberg, Austria, in the building that houses the massing process in the production of acetylene cylinders. The other portions of the Austrian facility were not damaged; however, the massing process building sustained extensive damage and was rendered inoperable. Additionally, we have incurred incremental business interruption costs. The Company has business interruption and property damage insurance and, as a result, the fire did not have a material adverse impact on the Company’s consolidated financial results. | |||||
During the second quarter of fiscal 2015, the Company received proceeds of $1,089,000, representing advance payments for the replacement value of damaged equipment. These proceeds were in excess of the $243,000 remaining book value of the assets, resulting in a gain of $846,000 within miscellaneous income in our consolidated statement of earnings for the six months ended November 30, 2014. | |||||
Total proceeds received related to insurance claims since the date of loss have been as follows: | |||||
(in thousands) | |||||
Property and equipment | $ | 6,780 | |||
Business interruption | 3,940 | ||||
Other expenses | 1,001 | ||||
Total insurance proceeds | $ | 11,721 | |||
The proceeds for business interruption relate to the loss of profits since the date of the fire and have been recorded as a reduction of manufacturing expense, including $1,072,000 during the six months ended November 30, 2014. The proceeds for other expenses represent reimbursement for incremental expenses related to the fire and were recorded as an offset to manufacturing expense, including $256,000 during the six months ended November 30, 2014. |
Guarantees
Guarantees | 6 Months Ended |
Nov. 30, 2014 | |
Guarantees | NOTE F – 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, as of November 30, 2014, we were party to an operating lease for an aircraft in which we have guaranteed a residual value at the termination of the lease. The maximum obligation under the terms of this guarantee was approximately $12,395,000 at November 30, 2014. We have also guaranteed the repayment of a $2,500,000 term loan entered into by one of our unconsolidated affiliates, ArtiFlex. Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to these guarantees, and determined that the fair value of our obligation under each guarantee based on those likely outcomes is not material and, therefore, no amounts have been recognized in our consolidated financial statements. |
Debt_and_Receivables_Securitiz
Debt and Receivables Securitization | 6 Months Ended |
Nov. 30, 2014 | |
Debt and Receivables Securitization | NOTE G – Debt and Receivables Securitization |
On September 26, 2014, our consolidated joint venture in Turkey, Worthington Aritas, executed a $32,344,000 five-year term loan credit facility denominated in Euros. As of November 30, 2014, we had borrowed $19,745,000 against the facility, leaving $12,599,000 available for future borrowings. The facility bears interest at a variable rate based on EURIBOR. The applicable variable rate was 1.582% at November 30, 2014. On October 15, 2014, we entered into an interest rate swap to fix the interest rate on $19,406,000 of borrowings under this facility at 2.015% starting on December 26, 2014 thru September 26, 2019. Borrowings against the facility will be used for the construction of a new cryogenics manufacturing facility in Turkey. | |
We have a $425,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders that matures in May 2017. There were no borrowings outstanding under the Credit Facility at November 30, 2014. However, we provided $13,998,000 in stand-by letters of credit for third-party beneficiaries as of November 30, 2014. While not drawn against, certain of these letters of credit totaling $11,732,000 are issued against availability under the Credit Facility, leaving $413,268,000 available at November 30, 2014. | |
Borrowings under the Credit Facility have maturities of less than one year. However, we can extend the term of amounts borrowed by renewing these borrowings for the term of the Credit Facility. We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime or Fed Funds rates. The applicable margin is determined by our credit rating. | |
We also maintain a $100,000,000 revolving trade accounts receivable securitization facility (the “AR Facility”). The AR Facility has been available throughout fiscal 2015 to date, and was available throughout fiscal 2014. The AR Facility expires in January 2015; however, we are currently in the process of renewing this agreement and expect to renew this facility prior to its expiration. Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary. In turn, WRC may sell without recourse, on a revolving basis, up to $100,000,000 of undivided ownership interests in this pool of accounts receivable to a multi-seller, asset-backed commercial paper conduit (the “Conduit”). Purchases by the Conduit are financed with the sale of A1/P1 commercial paper. We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest. Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal. The book value of the retained portion of the pool of accounts receivable approximates fair value. As of November 30, 2014, the pool of eligible accounts receivable exceeded the $100,000,000 limit; however, no ownership interests in this pool had been sold. | |
Short-term borrowings at November 30, 2014 consisted of $4,095,000 outstanding under a credit facility maintained by our consolidated affiliate, Worthington Aritas, that matures in March 2015 and bears interest at a fixed rate of 5.60%, and $6,674,000 outstanding under a $9,500,000 credit facility maintained by our consolidated affiliate, Worthington Nitin Cylinders, that matured in November 2014 and bears interest at a variable rate. The applicable variable rate was 8.54% at November 30, 2014. The borrowings outstanding under the Nitin credit facility are currently in default. However, the lender has not called the note. |
Comprehensive_Income
Comprehensive Income | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Comprehensive Income | NOTE H – Comprehensive Income | ||||||||||||||||||||||||
The following table summarizes the tax effects on each component of other comprehensive income (loss) for the three months ended November 30, 2014 and 2013: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | Before-Tax | Tax Benefit | Net-of-Tax | Before-Tax | Tax Expense | Net-of-Tax | |||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Foreign currency translation | $ | (7,270 | ) | $ | - | $ | (7,270 | ) | $ | 3,037 | - | $ | 3,037 | ||||||||||||
Cash flow hedges | (2,973 | ) | 1,092 | (1,881 | ) | 661 | (308 | ) | 353 | ||||||||||||||||
Other comprehensive income (loss) | $ | (10,243 | ) | $ | 1,092 | $ | (9,151 | ) | $ | 3,698 | $ | (308 | ) | $ | 3,390 | ||||||||||
The following table summarizes the tax effects on each component of other comprehensive income (loss) for the six months ended November 30, 2014 and 2013: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | Before-Tax | Tax Benefit | Net-of-Tax | Before-Tax | Tax Expense | Net-of-Tax | |||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Foreign currency translation | $ | (16,862 | ) | $ | - | $ | (16,862 | ) | $ | 2,551 | $ | - | $ | 2,551 | |||||||||||
Cash flow hedges | (1,430 | ) | 510 | (920 | ) | 5,481 | (1,777 | ) | 3,704 | ||||||||||||||||
Other comprehensive income (loss) | $ | (18,292 | ) | $ | 510 | $ | (17,782 | ) | $ | 8,032 | $ | (1,777 | ) | $ | 6,255 | ||||||||||
Changes_in_Equity
Changes in Equity | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Changes in Equity | NOTE I – Changes in Equity | ||||||||||||||||||||||||
The following table provides a summary of the changes in total equity, shareholders’ equity attributable to controlling interest, and equity attributable to noncontrolling interest for the six months ended November 30, 2014: | |||||||||||||||||||||||||
Controlling Interest | |||||||||||||||||||||||||
(in thousands) | Additional | Cumulative | Retained | Total | Non- | Total | |||||||||||||||||||
Paid-in | Other | Earnings | controlling | ||||||||||||||||||||||
Capital | Comprehensive | Interest | |||||||||||||||||||||||
Loss, | |||||||||||||||||||||||||
Net of Tax | |||||||||||||||||||||||||
Balance at May 31, 2014 | $ | 262,610 | $ | (3,581 | ) | $ | 591,783 | $ | 850,812 | $ | 94,070 | $ | 944,882 | ||||||||||||
Net earnings | - | - | 73,630 | 73,630 | 6,645 | 80,275 | |||||||||||||||||||
Other comprehensive loss | - | (16,168 | ) | - | (16,168 | ) | (1,614 | ) | (17,782 | ) | |||||||||||||||
Common shares issued, net of withholding tax | (454 | ) | - | - | (454 | ) | - | (454 | ) | ||||||||||||||||
Common shares in NQ plans | 14,227 | - | - | 14,227 | - | 14,227 | |||||||||||||||||||
Stock-based compensation | 16,628 | - | - | 16,628 | - | 16,628 | |||||||||||||||||||
Purchases and retirement of common shares | (4,350 | ) | - | (37,270 | ) | (41,620 | ) | - | (41,620 | ) | |||||||||||||||
Cash dividends declared | - | - | (24,553 | ) | (24,553 | ) | - | (24,553 | ) | ||||||||||||||||
Acquisition of dHybrid Systems, LLC | - | - | - | - | 4,082 | 4,082 | |||||||||||||||||||
Dividend to noncontrolling interest | - | - | - | - | (4,677 | ) | (4,677 | ) | |||||||||||||||||
Balance at November 30, 2014 | $ | 288,661 | $ | (19,749 | ) | $ | 603,590 | $ | 872,502 | $ | 98,506 | $ | 971,008 | ||||||||||||
The components of the changes in other comprehensive income (loss) were as follows: | |||||||||||||||||||||||||
(in thousands) | Foreign | Pension | Cash | Accumulated | |||||||||||||||||||||
Currency | Liability | Flow | Other | ||||||||||||||||||||||
Translation | Adjustment | Hedges | Comprehensive | ||||||||||||||||||||||
Loss | |||||||||||||||||||||||||
Balance as of May 31, 2014 | $ | 11,015 | $ | (11,265 | ) | $ | (3,331 | ) | $ | (3,581 | ) | ||||||||||||||
Other comprehensive loss before reclassifications | (15,237 | ) | - | (4,878 | ) | (20,115 | ) | ||||||||||||||||||
Reclassification adjustments to income (a) | - | - | 3,437 | 3,437 | |||||||||||||||||||||
Income taxes | - | - | 510 | 510 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | (4,222 | ) | $ | (11,265 | ) | $ | (4,262 | ) | $ | (19,749 | ) | |||||||||||||
(a) | The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “NOTE O – Derivative Instruments and Hedging Activities.” |
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Stock-Based Compensation | NOTE J – Stock-Based Compensation | ||||
Non-Qualified Stock Options | |||||
During the six months ended November 30, 2014, we granted non-qualified stock options covering a total of 96,200 common shares under our stock-based compensation plans. The option price of $43.04 per share was equal to the market price of the underlying common shares at the grant date. The fair value of these stock options, based on the Black-Scholes option-pricing model, calculated at the grant date, was $17.96 per share. The calculated pre-tax stock-based compensation expense for these stock options, after an estimate for forfeitures, is $1,538,000 and will be recognized on a straight-line basis over the three-year vesting period. The following assumptions were used to value these stock options: | |||||
Dividend yield | 1.88 | % | |||
Expected volatility | 50.92 | % | |||
Risk-free interest rate | 1.88 | % | |||
Expected term (years) | 6 | ||||
Expected volatility is based on the historical volatility of our common shares and the risk-free interest rate is based on the United States Treasury strip rate for the expected term of the stock options. The expected term was developed using historical exercise experience. | |||||
Service-Based Restricted Common Shares | |||||
During the six months ended November 30, 2014, we granted an aggregate of 231,515 service-based restricted common shares under our stock-based compensation plans. The fair values of these restricted common shares were equal to the weighted average closing market prices of the underlying common shares on the respective dates of grant, or $40.40 per share. The calculated pre-tax stock-based compensation expense for these restricted common shares, after an estimate for forfeitures, is $8,415,000 and will be recognized on a straight-line basis over the three-year service-based vesting period. | |||||
Market-Based Restricted Common Shares | |||||
During the six months ended November 30, 2014, we granted an aggregate of 50,000 restricted common shares to two key employees under one of our stock-based compensation plans. Vesting of these restricted common share awards is contingent upon the price of our common shares reaching $60.00 per share and remaining at or above that price for 30 consecutive days during the five-year period following the date of grant and the completion of a five-year service vesting period. The grant-date fair value of these restricted common shares, as determined by a Monte Carlo simulation model, was $32.06 per share. The Monte Carlo simulation model is a statistical technique that incorporates multiple assumptions to determine the probability that the market condition will be achieved. The following assumptions were used to determine the grant-date fair value and the derived service period for these restricted common shares: | |||||
Dividend yield | 1.6 | % | |||
Expected volatility | 44 | % | |||
Risk-free interest rate | 1.7 | % | |||
The calculated pre-tax stock-based compensation expense for these restricted common shares is $1,603,000 and will be recognized on a straight-line basis over the five-year service vesting period. | |||||
Performance Share Awards | |||||
We have awarded performance shares to certain key employees that are earned based on the level of achievement with respect to corporate targets for cumulative corporate economic value added, earnings per share growth and, in the case of business unit executives, business unit operating income targets for the three-year periods ending May 31, 2015, 2016 and 2017. These performance share awards will be paid, to the extent earned, in common shares of the Company in the fiscal quarter following the end of the applicable three-year performance period. The fair value of our performance shares is determined by the closing market prices of the underlying common shares at their respective grant dates 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. During the six months ended November 30, 2014, we granted performance share awards covering an aggregate of 62,000 common shares (at target levels). The calculated pre-tax stock-based compensation expense for these performance shares is $2,648,000 and will be recognized over the three-year performance period. |
Income_Taxes
Income Taxes | 6 Months Ended |
Nov. 30, 2014 | |
Income Taxes | NOTE K – Income Taxes |
Income tax expense for the six months ended November 30, 2014 and November 30, 2013 reflected estimated annual effective income tax rates of 33.5% and 27.8%, respectively. The annual effective income tax rates exclude any impact from the inclusion of net earnings attributable to noncontrolling interests in our consolidated statements of earnings. Net earnings attributable to noncontrolling interest is a result of our Spartan, TWB, Worthington Aritas, WEI, dHybrid, and Worthington Nitin Cylinders consolidated joint ventures. The earnings attributable to the noncontrolling interest in Spartan, WEI, dHybrid and TWB’s U.S. operations do not generate tax expense to Worthington since the investors in Spartan, WEI, dHybrid, and TWB’s U.S. operations are taxed directly based on the earnings attributable to them. All of the tax expense of Worthington Aritas and Worthington Nitin Cylinders, both foreign corporations, is reported in our consolidated tax expense. Since the consolidation of TWB on July 31, 2013, all of the tax expense of TWB’s wholly-owned foreign corporations has been reported in our consolidated tax expense. Management is required to estimate the annual effective income tax rate based upon its forecast of annual pre-tax income for domestic and foreign operations. Our actual effective income tax rate for fiscal 2015 could be materially different from the forecasted rate as of November 30, 2014. |
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Earnings Per Share | NOTE L – Earnings Per Share | ||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per share attributable to controlling interest for the three and six months ended November 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator (basic & diluted): | |||||||||||||||||
Net earnings attributable to controlling interest – income available to common shareholders | $ | 29,462 | $ | 22,977 | $ | 73,630 | $ | 77,534 | |||||||||
Denominator: | |||||||||||||||||
Denominator for basic earnings per share attributable to controlling interest – weighted average common shares | 67,105 | 69,304 | 67,337 | 69,454 | |||||||||||||
Effect of dilutive securities | 2,076 | 2,522 | 2,443 | 2,635 | |||||||||||||
Denominator for diluted earnings per share attributable to controlling interest – adjusted weighted average common shares | 69,181 | 71,826 | 69,780 | 72,089 | |||||||||||||
Basic earnings per share attributable to controlling interest | $ | 0.44 | $ | 0.33 | $ | 1.09 | $ | 1.12 | |||||||||
Diluted earnings per share attributable to controlling interest | $ | 0.43 | $ | 0.32 | $ | 1.06 | $ | 1.08 | |||||||||
Stock options covering 147,859 and 396 common shares for the three months ended November 30, 2014 and 2013, respectively, and 113,744 and 197 common shares for the six months ended November 30, 2014 and 2013, respectively, have been excluded from the computation of diluted earnings per share because the effect would have been anti-dilutive, as the exercise price of the stock options was greater than the average market price of the common shares during the respective periods. |
Segment_Operations
Segment Operations | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Segment Operations | NOTE M – Segment Operations | ||||||||||||||||
Summarized financial information for our reportable segments is shown in the following table: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | |||||||||||||||||
Steel Processing | $ | 552,756 | $ | 492,134 | $ | 1,105,087 | $ | 894,575 | |||||||||
Pressure Cylinders | 252,744 | 214,022 | 501,703 | 430,922 | |||||||||||||
Engineered Cabs | 51,540 | 47,868 | 101,094 | 96,329 | |||||||||||||
Other | 13,972 | 15,876 | 25,542 | 40,365 | |||||||||||||
Consolidated net sales | $ | 871,012 | $ | 769,900 | $ | 1,733,426 | $ | 1,462,191 | |||||||||
Operating income (loss) | |||||||||||||||||
Steel Processing | $ | 33,877 | $ | 34,786 | $ | 69,746 | $ | 57,449 | |||||||||
Pressure Cylinders | 9,580 | 8,275 | 29,186 | 27,729 | |||||||||||||
Engineered Cabs | (5,609 | ) | (20,892 | ) | (7,754 | ) | (21,196 | ) | |||||||||
Other | (4,656 | ) | (2,670 | ) | (5,784 | ) | (5,845 | ) | |||||||||
Consolidated operating income | $ | 33,192 | $ | 19,499 | $ | 85,394 | $ | 58,137 | |||||||||
Restructuring and other expense (income) | |||||||||||||||||
Steel Processing | $ | - | $ | - | $ | (30 | ) | $ | (4,762 | ) | |||||||
Pressure Cylinders | 405 | (1,849 | ) | 428 | (1,447 | ) | |||||||||||
Engineered Cabs | - | - | - | - | |||||||||||||
Other | - | 667 | - | 1,030 | |||||||||||||
Consolidated restructuring and other expense (income) | $ | 405 | $ | (1,182 | ) | $ | 398 | $ | (5,179 | ) | |||||||
Impairment of long-lived assets | |||||||||||||||||
Steel Processing | $ | 1,100 | $ | - | $ | 3,050 | $ | 4,641 | |||||||||
Pressure Cylinders | 9,567 | 11,634 | 9,567 | 11,634 | |||||||||||||
Engineered Cabs | 2,389 | 19,100 | 2,389 | 19,100 | |||||||||||||
Other | 1,179 | - | 1,179 | - | |||||||||||||
Consolidated impairment of long-lived assets | $ | 14,235 | $ | 30,734 | $ | 16,185 | $ | 35,375 | |||||||||
Joint venture transactions | |||||||||||||||||
Steel Processing | $ | - | $ | - | $ | - | $ | - | |||||||||
Pressure Cylinders | - | - | - | - | |||||||||||||
Engineered Cabs | - | - | - | - | |||||||||||||
Other | 83 | 786 | 190 | 928 | |||||||||||||
Consolidated joint venture transactions | $ | 83 | $ | 786 | $ | 190 | $ | 928 | |||||||||
(in thousands) | November 30, | May 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Total assets | |||||||||||||||||
Steel Processing | $ | 875,269 | $ | 850,748 | |||||||||||||
Pressure Cylinders | 870,789 | 818,720 | |||||||||||||||
Engineered Cabs | 178,761 | 181,251 | |||||||||||||||
Other | 382,572 | 445,662 | |||||||||||||||
Consolidated total assets | $ | 2,307,391 | $ | 2,296,381 | |||||||||||||
Acquisitions
Acquisitions | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Acquisitions | NOTE N – Acquisitions | ||||||||
dHybrid Systems, LLC | |||||||||
On October 20, 2014, we acquired a 79.59% ownership interest in dHybrid, a leader in compressed natural gas (“CNG”) systems for large trucks. The remaining 20.41% was retained by a founding member. The total purchase price was $15,918,000, which includes contingent consideration with an estimated fair value of $3,979,000. The acquired business became part of our Pressure Cylinders operating segment upon closing. | |||||||||
The contingent consideration arrangement requires the Company to pay $3,979,000 of additional consideration when cumulative net sales beginning January 1, 2013 reach $20,000,000 plus 50% of gross margin above certain thresholds in each of the five twelve-month periods following the closing date. We determined the acquisition-date fair value of the contingent consideration obligation using a probability weighted cash flow approach based on management’s projections of future sales and gross margin. Refer to “Note P – Fair Value Measurements” for additional information regarding the fair value measurement of the contingent consideration obligation. | |||||||||
The assets acquired and liabilities assumed were recognized at their 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 the net assets of dHybrid, we identified and valued the following identifiable intangible assets: | |||||||||
(in thousands) | Useful Life | ||||||||
Category | Amount | (Years) | |||||||
Technological know-how | $ | 3,100 | 10 | ||||||
Customer relationships | 600 | 7 | |||||||
Backlog | 88 | Less than 1 | |||||||
Total acquired identifiable intangible assets | $ | 3,788 | |||||||
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 a going-concern element that represents our ability to earn a higher rate of return on this group of assets than would be expected on the separate assets as determined during the valuation process. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes. | |||||||||
The following table summarizes the consideration transferred for our 79.59% interest in dHybrid and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | |||||||||
(in thousands) | |||||||||
Consideration Transferred: | |||||||||
Cash consideration | $ | 11,939 | |||||||
Fair value of contingent consideration | 3,979 | ||||||||
Total consideration | $ | 15,918 | |||||||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||||||||
Cash and cash equivalents | $ | 795 | |||||||
Accounts receivable | 1,459 | ||||||||
Inventories | 3,300 | ||||||||
Prepaid expenses and other current assets | 38 | ||||||||
Intangible assets | 3,788 | ||||||||
Property, plant and equipment | 396 | ||||||||
Total identifiable assets | 9,776 | ||||||||
Accounts payable | (1,163 | ) | |||||||
Accrued liabilities | (160 | ) | |||||||
Long-term debt | (5,000 | ) | |||||||
Net identifiable assets | 3,453 | ||||||||
Goodwill | 16,547 | ||||||||
Net assets | 20,000 | ||||||||
Noncontrolling interest | (4,082 | ) | |||||||
Total consideration | $ | 15,918 | |||||||
Operating results of the acquired business have been included in our consolidated statements of earnings for the three and six months ended November 30, 2014 from the acquisition date, forward. Pro forma results, including the acquired business since the beginning of fiscal 2014, would not be materially different than reported results. | |||||||||
Midstream Equipment Fabrication, LLC | |||||||||
On August 1, 2014, we acquired the net assets of Midstream Equipment Fabrication LLC (“MEF”) for cash consideration of $35,232,000 and the assumption of certain liabilities. MEF manufactures patented horizontal heated and high pressure separators used to separate oilfield fluids and gas for customers drilling in the Eagle Ford Shale and is well-situated to serve customers in the Permian Basin. The acquired net assets became part of our Pressure Cylinders operating segment upon closing. | |||||||||
The assets acquired and liabilities assumed were recognized at their 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 the net assets of MEF, we identified and valued the following identifiable intangible assets: | |||||||||
(in thousands) | Useful Life | ||||||||
Category | Amount | (Years) | |||||||
Technological know-how | $ | 5,100 | 10 | ||||||
Customer relationships | 4,300 | 7 | |||||||
Non-compete agreements | 2,400 | 4 | |||||||
Backlog | 1,800 | Less than 1 | |||||||
Total acquired identifiable intangible assets | $ | 13,600 | |||||||
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 a going-concern element that represents our ability to earn a higher rate of return on this group of assets than would be expected on the separate assets as determined during the valuation process. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes. | |||||||||
The following table summarizes the consideration transferred for the net assets of MEF and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | |||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 3,329 | |||||||
Inventories | 3,550 | ||||||||
Intangible assets | 13,600 | ||||||||
Property, plant and equipment | 166 | ||||||||
Total identifiable assets | 20,645 | ||||||||
Accounts payable | (555 | ) | |||||||
Other accrued items | (92 | ) | |||||||
Deferred revenue | (4,808 | ) | |||||||
Net assets | 15,190 | ||||||||
Goodwill | 23,202 | ||||||||
Purchase price | 38,392 | ||||||||
Less: estimated excess working capital | 3,160 | ||||||||
Cash paid at closing | $ | 35,232 | |||||||
During the second quarter of fiscal 2015, the Company paid $3,399,000 to settle the final working capital. The Company incurred $273,000 of acquisition-related costs that were expensed within SG&A expense during the six months ended November 30, 2014. Operating results of the acquired business have been included in our consolidated statements of earnings for the three and six months ended November 30, 2014 from the acquisition date, forward. Pro forma results, including the acquired business since the beginning of fiscal 2014, would not be materially different than reported results. | |||||||||
James Russell Engineering Works, Inc. | |||||||||
On July 31, 2014, we acquired the net assets of James Russell Engineering Works, Inc. (“JRE”) for cash consideration of $1,571,000. JRE manufactures aluminum and stainless steel cryogenic transport trailers used for hauling liquid oxygen, nitrogen, argon, hydrogen and liquefied natural gas (“LNG”) for producers and distributors of industrial gases and LNG. The acquired net assets became part of our Pressure Cylinders operating segment upon closing. | |||||||||
The assets acquired and liabilities assumed were recognized at their acquisition-date fair values. 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 a going-concern element that represents our ability to earn a higher rate of return on this group of assets than would be expected on the separate assets as determined during the valuation process. This additional investment value resulted in goodwill, which is expected to be deductible for income tax purposes. | |||||||||
The following table summarizes the consideration transferred for the net assets of JRE and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | |||||||||
(in thousands) | |||||||||
Cash | $ | 253 | |||||||
Accounts receivable | 509 | ||||||||
Inventories | 2,793 | ||||||||
Prepaid expense and other current assets | 40 | ||||||||
Property, plant and equipment | 250 | ||||||||
Total identifiable assets | 3,845 | ||||||||
Accounts payable | (514 | ) | |||||||
Other accrued items | (2,160 | ) | |||||||
Net identifiable assets | 1,171 | ||||||||
Goodwill | 400 | ||||||||
Total cash consideration | $ | 1,571 | |||||||
Operating results of the acquired business have been included in our consolidated statements of earnings for the three and six months ended November 30, 2014 from the acquisition date, forward. Pro forma results, including the acquired business since the beginning of fiscal 2014, would not be materially different than reported results. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 6 Months Ended | ||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||
Derivative Instruments and Hedging Activities | NOTE O – Derivative Instruments and Hedging Activities | ||||||||||||||||||
We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk. While certain of our derivative instruments are designated as hedging instruments, we also enter into derivative 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 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 to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs. | |||||||||||||||||||
Currency Exchange Risk Management – We conduct business in several major international currencies and are therefore subject to risks associated with changing foreign exchange rates. We enter into various contracts that change in value as foreign exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable currency fluctuations. The translation of foreign currencies into United States dollars also subjects us to exposure related to fluctuating exchange rates; however, derivative 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, zinc 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 instruments to manage the associated price risk. | |||||||||||||||||||
We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines and enter into derivative instruments only with major financial institutions. We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material. | |||||||||||||||||||
Refer to “Note P – Fair Value” for additional information regarding the accounting treatment for our derivative instruments, as well as how fair value is determined. | |||||||||||||||||||
The following table summarizes the fair value of our derivative instruments and the respective financial statement caption in which they were recorded in our consolidated balance sheet at November 30, 2014: | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
(in thousands) | Balance | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | ||||||||||||||||
Location | Location | ||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Interest rate contracts | Receivables | $ | - | Accounts payable | $ | 2,102 | |||||||||||||
Other assets | - | Other liabilities | 183 | ||||||||||||||||
- | 2,285 | ||||||||||||||||||
Foreign exchange contracts | Receivables | 106 | Accounts payable | - | |||||||||||||||
Commodity contracts | Receivables | - | Accounts payable | 3,444 | |||||||||||||||
Totals | $ | 106 | $ | 5,729 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Commodity contracts | Receivables | $ | 231 | Accounts payable | $ | 595 | |||||||||||||
Totals | $ | 231 | $ | 595 | |||||||||||||||
Total Derivative Instruments | $ | 337 | $ | 6,324 | |||||||||||||||
The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $324,000 increase in receivables with a corresponding increase in accounts payable. | |||||||||||||||||||
The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2014: | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
(in thousands) | Balance | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | ||||||||||||||||
Location | Location | ||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Interest rate contracts | Receivables | $ | - | Accounts payable | $ | 4,180 | |||||||||||||
Commodity contracts | Receivables | 456 | Accounts payable | - | |||||||||||||||
Totals | $ | 456 | $ | 4,180 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Commodity contracts | Receivables | $ | 796 | Accounts payable | $ | 295 | |||||||||||||
Foreign exchange contracts | Receivables | 32 | Accounts payable | - | |||||||||||||||
Totals | $ | 828 | $ | 295 | |||||||||||||||
Total Derivative Instruments | $ | 1,284 | $ | 4,475 | |||||||||||||||
The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $730,000 increase in receivables with a corresponding increase in accounts payable. | |||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||
We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same financial statement caption associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in earnings immediately. | |||||||||||||||||||
The following table summarizes our cash flow hedges outstanding at November 30, 2014: | |||||||||||||||||||
(in thousands) | Notional | Maturity Date | |||||||||||||||||
Amount | |||||||||||||||||||
Commodity contracts | $ | 57,368 | December 2014 - July 2016 | ||||||||||||||||
Interest rate contracts | 120,000 | December 2014 - September 2019 | |||||||||||||||||
Foreign currency contracts | 11,168 | December 2014 - June 2015 | |||||||||||||||||
The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from accumulated OCI into earnings for derivative instruments designated as cash flow hedges during the three months ended November 30, 2014 and 2013: | |||||||||||||||||||
(in thousands) | Gain (Loss) | Location of | Gain (Loss) | Location of | Gain (Loss) | ||||||||||||||
Recognized | Gain (Loss) | Reclassified | Gain (Loss) | (Ineffective | |||||||||||||||
in OCI | Reclassified | from | (Ineffective | Portion) | |||||||||||||||
(Effective | from | Accumulated | Portion) | and Excluded | |||||||||||||||
Portion) | Accumulated | OCI | and Excluded | from | |||||||||||||||
OCI | (Effective | from | Effectiveness | ||||||||||||||||
(Effective | Portion) | Effectiveness | Testing | ||||||||||||||||
Portion) | Testing | ||||||||||||||||||
For the three months ended November 30, 2014: | |||||||||||||||||||
Interest rate contracts | $ | - | Interest expense | $ | (1,137 | ) | Interest expense | $ | - | ||||||||||
Commodity contracts | (4,362 | ) | Cost of goods sold | (356 | ) | Cost of goods sold | - | ||||||||||||
Foreign currency contracts | (103 | ) | Miscellaneous income | - | Miscellaneous income | - | |||||||||||||
Totals | $ | (4,465 | ) | $ | (1,493 | ) | $ | - | |||||||||||
For the three months ended November 30, 2013: | |||||||||||||||||||
Interest rate contracts | $ | (181 | ) | Interest expense | $ | (1,057 | ) | Interest expense | $ | - | |||||||||
Commodity contracts | (1,047 | ) | Cost of goods sold | (812 | ) | Cost of goods sold | - | ||||||||||||
Totals | $ | (1,228 | ) | $ | (1,869 | ) | $ | - | |||||||||||
The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from accumulated OCI into earnings for derivative instruments designated as cash flow hedges during the six months ended November 30, 2014 and 2013: | |||||||||||||||||||
(in thousands) | Gain (Loss) | Location of | Gain (Loss) | Location of | Gain (Loss) | ||||||||||||||
Recognized | Gain (Loss) | Reclassified | Gain (Loss) | (Ineffective | |||||||||||||||
in OCI | Reclassified | from | (Ineffective | Portion) | |||||||||||||||
(Effective | from | Accumulated | Portion) | and Excluded | |||||||||||||||
Portion) | Accumulated | OCI | and Excluded | from | |||||||||||||||
OCI | (Effective | from | Effectiveness | ||||||||||||||||
(Effective | Portion) | Effectiveness | Testing | ||||||||||||||||
Portion) | Testing | ||||||||||||||||||
For the six months ended November 30, 2014: | |||||||||||||||||||
Interest rate contracts | $ | - | Interest expense | $ | (2,285 | ) | Interest expense | $ | - | ||||||||||
Commodity contracts | (4,775 | ) | Cost of goods sold | (1,152 | ) | Cost of goods sold | - | ||||||||||||
Foreign currency contracts | (103 | ) | Miscellaneous income | - | Miscellaneous income | - | |||||||||||||
Totals | $ | (4,878 | ) | $ | (3,437 | ) | $ | - | |||||||||||
For the six months ended November 30, 2013: | |||||||||||||||||||
Interest rate contracts | $ | (384 | ) | Interest expense | $ | (2,120 | ) | Interest expense | $ | - | |||||||||
Commodity contracts | 2,617 | Cost of goods sold | (1,128 | ) | Cost of goods sold | - | |||||||||||||
Totals | $ | 2,233 | $ | (3,248 | ) | $ | - | ||||||||||||
The estimated net amount of the losses recognized in accumulated OCI at November 30, 2014 expected to be reclassified into net earnings within the succeeding twelve months is $2,118,000 (net of tax of $1,251,000). This amount was computed using the fair value of the cash flow hedges at November 30, 2014, and will change before actual reclassification from OCI to net earnings during the fiscal years ending May 31, 2015 and 2016. | |||||||||||||||||||
Economic (Non-designated) Hedges | |||||||||||||||||||
We enter into foreign currency contracts to manage our foreign exchange 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 instruments are adjusted to current market value at the end of each period through earnings. | |||||||||||||||||||
The following table summarizes our economic (non-designated) derivative instruments outstanding at November 30, 2014: | |||||||||||||||||||
(in thousands) | Notional | Maturity Date(s) | |||||||||||||||||
Amount | |||||||||||||||||||
Commodity contracts | $ | 57,607 | December 2014 - June 2016 | ||||||||||||||||
The following table summarizes the loss recognized in earnings for economic (non-designated) derivative financial instruments during the three months ended November 30, 2014 and 2013: | |||||||||||||||||||
Location of Loss | Loss Recognized | ||||||||||||||||||
in Earnings for the | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
November 30, | |||||||||||||||||||
(in thousands) | Recognized in Earnings | 2014 | 2013 | ||||||||||||||||
Commodity contracts | Cost of goods sold | $ | (2,360 | ) | $ | (394 | ) | ||||||||||||
Foreign currency contracts | Miscellaneous income (expense) | (218 | ) | - | |||||||||||||||
Total | $ | (2,578 | ) | $ | (394 | ) | |||||||||||||
The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments during the six months ended November 30, 2014 and 2013: | |||||||||||||||||||
Location of Gain (Loss) | Gain (Loss) Recognized | ||||||||||||||||||
in Earnings for the | |||||||||||||||||||
Six Months Ended | |||||||||||||||||||
November 30, | |||||||||||||||||||
(in thousands) | Recognized in Earnings | 2014 | 2013 | ||||||||||||||||
Commodity contracts | Cost of goods sold | $ | (2,417 | ) | $ | 282 | |||||||||||||
Foreign currency contracts | Miscellaneous income (expense) | 43 | (5 | ) | |||||||||||||||
Total | $ | (2,374 | ) | $ | 277 | ||||||||||||||
The gain (loss) on the foreign currency derivatives significantly offsets the gain (loss) on the hedged item. |
Fair_Value
Fair Value | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Fair Value | NOTE P – 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 | – | Observable inputs other than quoted prices in active markets for identical assets and liabilities. | |||||||||||||||
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 November 30, 2014, our financial assets and liabilities measured at fair value on a recurring basis were as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 337 | $ | - | $ | 337 | |||||||||
Total assets | $ | - | $ | 337 | $ | - | $ | 337 | |||||||||
Liabilities | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 6,324 | $ | - | $ | 6,324 | |||||||||
Contingent consideration obligation (2) | - | - | 3,979 | 3,979 | |||||||||||||
Total liabilities | $ | - | $ | 6,324 | $ | 3,979 | $ | 10,303 | |||||||||
At May 31, 2014, our financial assets and liabilities measured at fair value on a recurring basis were as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 1,284 | $ | - | $ | 1,284 | |||||||||
Total assets | $ | - | $ | 1,284 | $ | - | $ | 1,284 | |||||||||
Liabilities | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 4,475 | $ | - | $ | 4,475 | |||||||||
Contingent consideration obligation (2) | - | - | 404 | 404 | |||||||||||||
Total liabilities | $ | - | $ | 4,475 | $ | 404 | $ | 4,879 | |||||||||
-1 | The fair value of our derivative contracts 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 O – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments. | ||||||||||||||||
-2 | The fair value of the Company’s contingent consideration obligations is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired businesses. The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements. | ||||||||||||||||
Non-Recurring Fair Value Measurements | |||||||||||||||||
At November 30, 2014, our financial assets and liabilities measured at fair value on a non-recurring basis were as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Long-lived assets held for sale (1) | $ | - | $ | 21,821 | $ | - | $ | 21,821 | |||||||||
Long-lived assets held and used (2) | - | 3,750 | - | 3,750 | |||||||||||||
Total assets | $ | - | $ | 25,571 | $ | - | $ | 25,571 | |||||||||
-1 | During the fourth quarter of fiscal 2014, management committed to a plan to sell certain non-core Steel Processing assets. As all of the criteria for classification as assets held for sale were met, the net assets of this business, which consist of net working capital and property, plant and equipment, have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014 and May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale during fiscal 2015, the Company reassessed the fair value of this business and determined that additional impairment charges of $3,050,000 were required for the six months ended November 30, 2014. Fair value of $19,402,000 was determined based on market prices for similar assets. | ||||||||||||||||
During the second quarter of fiscal 2015, management committed to a plan to sell certain non-core Engineered Cabs assets. As all of the criteria for classification as assets held for sale were met, the net assets of the business have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $2,389,000 during the three months ended November 30, 2014. Fair value of $2,419,000 was determined based on market prices for similar assets. | |||||||||||||||||
-2 | During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $3,750,000, resulting in an impairment charge of $3,221,000 during the three months ended November 30, 2014. | ||||||||||||||||
During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s military construction business. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $1,179,000 during the three months ended November 30, 2014, which represents the remaining book value of the asset group. | |||||||||||||||||
During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company’s 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. As all of the criteria for classification as assets held for sale were met, the net assets of the business were presented separately as assets held for sale in our consolidated balance sheet as of May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale of Worthington Nitin Cylinders during the second quarter of fiscal 2015, the Company reassessed the fair value of the business and determined that the remaining book value should be written off resulting in an impairment charge of $6,346,000. | |||||||||||||||||
At May 31, 2014, our assets measured at fair value on a non-recurring basis were categorized as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Long-lived assets held for sale (1) | $ | - | $ | 25,040 | $ | - | $ | 25,040 | |||||||||
Long-lived assets held and used (2) | - | 7,034 | - | 7,034 | |||||||||||||
Total assets | $ | - | $ | 32,074 | $ | - | $ | 32,074 | |||||||||
-1 | During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company’s 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $5,925,000, was lower than its net book value, an impairment charge of $18,959,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. The portion of this impairment loss attributable to the noncontrolling interest, or $7,583,000, was recorded within net earnings attributable to noncontrolling interest in our fiscal 2014 consolidated statement of earnings. | ||||||||||||||||
During the fourth quarter of fiscal 2014, management committed to plans to sell certain non-core Steel Processing assets. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $19,115,000, was lower than its net book value, an impairment charge of $7,141,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. | |||||||||||||||||
-2 | During the fourth quarter of fiscal 2014, we determined that indicators of impairment were present at the Company’s aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $7,034,000, resulting in an impairment charge of $1,412,000 within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. | ||||||||||||||||
The fair value of non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, notes receivable, income taxes receivable, other assets, accounts payable, short-term borrowings, 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, was $711,589,000 and $674,488,000 at November 30, 2014 and May 31, 2014, respectively. The carrying amount of long-term debt, including current maturities, was $674,874,000 and $655,963,000 at November 30, 2014 and May 31, 2014, respectively. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Nov. 30, 2014 | |
Subsequent Events | NOTE Q – Subsequent Events |
At November 30, 2014, we had $100,000,000 aggregate amount of unsecured floating rate senior notes outstanding due on December 17, 2014. We repaid these notes during December 2014 using a combination of cash on hand and borrowings available under our revolving credit facilities. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 6 Months Ended |
Nov. 30, 2014 | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards |
In March 2013, amended accounting guidance was issued regarding the accounting for cumulative translation adjustment. The amended guidance specifies that a cumulative translation adjustment should be released from earnings when an entity ceases to have a controlling financial interest in a subsidiary or a group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the foreign entity. For sales of an equity method investment that is a foreign entity, a pro rata portion of the cumulative translation adjustment attributable to the investment would be recognized in earnings upon sale of the investment. The amended guidance is effective prospectively for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2013. Early adoption is permitted. The adoption of this amended accounting guidance on June 1, 2014 did not have a material impact on our consolidated financial position or results of operations. | |
In May 2014, amended accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP. The amended guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The amended guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations. The amended guidance permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method nor have we determined the effect of the amended guidance on our ongoing financial reporting. | |
Economic (Non-designated) Hedges | Economic (Non-designated) Hedges |
We enter into foreign currency contracts to manage our foreign exchange 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 instruments are adjusted to current market value at the end of each period through earnings. | |
Cash Flow Hedges | |
Cash Flow Hedges | Cash Flow Hedges |
We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions. These derivative instruments are designated and qualify as cash flow hedges. Accordingly, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same financial statement caption associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument is recognized in earnings immediately. |
Investments_in_Unconsolidated_1
Investments in Unconsolidated Affiliates (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Balance Sheet | |||||||||||||||||
Financial Information | Combined financial information for our unconsolidated affiliates is summarized as follows: | ||||||||||||||||
(in thousands) | November 30, | May 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Cash | $ | 53,333 | $ | 52,997 | |||||||||||||
Receivable from member (1) | 8,635 | 12,717 | |||||||||||||||
Other current assets | 470,266 | 454,417 | |||||||||||||||
Noncurrent assets | 290,261 | 294,001 | |||||||||||||||
Total assets | $ | 822,495 | $ | 814,132 | |||||||||||||
Current liabilities | $ | 156,959 | $ | 128,595 | |||||||||||||
Short-term borrowings | 16,178 | 40,992 | |||||||||||||||
Current maturities of long-term debt | 4,460 | 4,510 | |||||||||||||||
Long-term debt | 266,107 | 268,350 | |||||||||||||||
Other noncurrent liabilities | 18,664 | 20,217 | |||||||||||||||
Equity | 360,127 | 351,468 | |||||||||||||||
Total liabilities and equity | $ | 822,495 | $ | 814,132 | |||||||||||||
-1 | Represents cash owed from a joint venture member as a result of centralized cash management. | ||||||||||||||||
Income Statement | |||||||||||||||||
Financial Information | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | $ | 388,712 | $ | 357,236 | $ | 781,262 | $ | 780,717 | |||||||||
Gross margin | 76,193 | 76,068 | 164,945 | 165,882 | |||||||||||||
Operating income | 49,864 | 51,532 | 113,343 | 116,072 | |||||||||||||
Depreciation and amortization | 8,983 | 9,104 | 18,105 | 19,441 | |||||||||||||
Interest expense | 2,173 | 2,233 | 4,335 | 4,456 | |||||||||||||
Income tax expense | 2,799 | 2,862 | 5,552 | 5,892 | |||||||||||||
Net earnings | 44,490 | 46,149 | 103,930 | 105,783 |
Restructuring_and_Other_Expens1
Restructuring and Other Expense (Tables) | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Expense | A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense financial statement caption in our consolidated statement of earnings for the six months ended November 30, 2014 is summarized as follows: | ||||||||||||||||||||
(in thousands) | Beginning | Expense | Payments | Adjustments | Ending | ||||||||||||||||
Balance | (Income) | Balance | |||||||||||||||||||
Early retirement and severance | $ | 6,495 | $ | (30 | ) | $ | (3,852 | ) | $ | 30 | $ | 2,643 | |||||||||
Facility exit and other costs | 534 | 618 | (932 | ) | 210 | 430 | |||||||||||||||
$ | 7,029 | 588 | $ | (4,784 | ) | $ | 240 | $ | 3,073 | ||||||||||||
Less: joint venture transactions | (190 | ) | |||||||||||||||||||
Restructuring and other expense | $ | 398 | |||||||||||||||||||
Contingent_Liabilities_Tables
Contingent Liabilities (Tables) | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Total Proceeds Received related to Insurance Claims since Date of Loss | Total proceeds received related to insurance claims since the date of loss have been as follows: | ||||
(in thousands) | |||||
Property and equipment | $ | 6,780 | |||
Business interruption | 3,940 | ||||
Other expenses | 1,001 | ||||
Total insurance proceeds | $ | 11,721 | |||
Comprehensive_Income_Tables
Comprehensive Income (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Summary of Tax Effects of Each Component of Other Comprehensive Income (Loss) | The following table summarizes the tax effects on each component of other comprehensive income (loss) for the three months ended November 30, 2014 and 2013: | ||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | Before-Tax | Tax Benefit | Net-of-Tax | Before-Tax | Tax Expense | Net-of-Tax | |||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Foreign currency translation | $ | (7,270 | ) | $ | - | $ | (7,270 | ) | $ | 3,037 | - | $ | 3,037 | ||||||||||||
Cash flow hedges | (2,973 | ) | 1,092 | (1,881 | ) | 661 | (308 | ) | 353 | ||||||||||||||||
Other comprehensive income (loss) | $ | (10,243 | ) | $ | 1,092 | $ | (9,151 | ) | $ | 3,698 | $ | (308 | ) | $ | 3,390 | ||||||||||
The following table summarizes the tax effects on each component of other comprehensive income (loss) for the six months ended November 30, 2014 and 2013: | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(in thousands) | Before-Tax | Tax Benefit | Net-of-Tax | Before-Tax | Tax Expense | Net-of-Tax | |||||||||||||||||||
Amount | Amount | Amount | Amount | ||||||||||||||||||||||
Foreign currency translation | $ | (16,862 | ) | $ | - | $ | (16,862 | ) | $ | 2,551 | $ | - | $ | 2,551 | |||||||||||
Cash flow hedges | (1,430 | ) | 510 | (920 | ) | 5,481 | (1,777 | ) | 3,704 | ||||||||||||||||
Other comprehensive income (loss) | $ | (18,292 | ) | $ | 510 | $ | (17,782 | ) | $ | 8,032 | $ | (1,777 | ) | $ | 6,255 | ||||||||||
Changes_in_Equity_Tables
Changes in Equity (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Summary of Changes in Total Equity, Shareholders' Equity Attributable to Controlling Interest, and Equity Attributable to Noncontrolling Interest | The following table provides a summary of the changes in total equity, shareholders’ equity attributable to controlling interest, and equity attributable to noncontrolling interest for the six months ended November 30, 2014: | ||||||||||||||||||||||||
Controlling Interest | |||||||||||||||||||||||||
(in thousands) | Additional | Cumulative | Retained | Total | Non- | Total | |||||||||||||||||||
Paid-in | Other | Earnings | controlling | ||||||||||||||||||||||
Capital | Comprehensive | Interest | |||||||||||||||||||||||
Loss, | |||||||||||||||||||||||||
Net of Tax | |||||||||||||||||||||||||
Balance at May 31, 2014 | $ | 262,610 | $ | (3,581 | ) | $ | 591,783 | $ | 850,812 | $ | 94,070 | $ | 944,882 | ||||||||||||
Net earnings | - | - | 73,630 | 73,630 | 6,645 | 80,275 | |||||||||||||||||||
Other comprehensive loss | - | (16,168 | ) | - | (16,168 | ) | (1,614 | ) | (17,782 | ) | |||||||||||||||
Common shares issued, net of withholding tax | (454 | ) | - | - | (454 | ) | - | (454 | ) | ||||||||||||||||
Common shares in NQ plans | 14,227 | - | - | 14,227 | - | 14,227 | |||||||||||||||||||
Stock-based compensation | 16,628 | - | - | 16,628 | - | 16,628 | |||||||||||||||||||
Purchases and retirement of common shares | (4,350 | ) | - | (37,270 | ) | (41,620 | ) | - | (41,620 | ) | |||||||||||||||
Cash dividends declared | - | - | (24,553 | ) | (24,553 | ) | - | (24,553 | ) | ||||||||||||||||
Acquisition of dHybrid Systems, LLC | - | - | - | - | 4,082 | 4,082 | |||||||||||||||||||
Dividend to noncontrolling interest | - | - | - | - | (4,677 | ) | (4,677 | ) | |||||||||||||||||
Balance at November 30, 2014 | $ | 288,661 | $ | (19,749 | ) | $ | 603,590 | $ | 872,502 | $ | 98,506 | $ | 971,008 | ||||||||||||
Components of Changes in Other Comprehensive Income (Loss) | The components of the changes in other comprehensive income (loss) were as follows: | ||||||||||||||||||||||||
(in thousands) | Foreign | Pension | Cash | Accumulated | |||||||||||||||||||||
Currency | Liability | Flow | Other | ||||||||||||||||||||||
Translation | Adjustment | Hedges | Comprehensive | ||||||||||||||||||||||
Loss | |||||||||||||||||||||||||
Balance as of May 31, 2014 | $ | 11,015 | $ | (11,265 | ) | $ | (3,331 | ) | $ | (3,581 | ) | ||||||||||||||
Other comprehensive loss before reclassifications | (15,237 | ) | - | (4,878 | ) | (20,115 | ) | ||||||||||||||||||
Reclassification adjustments to income (a) | - | - | 3,437 | 3,437 | |||||||||||||||||||||
Income taxes | - | - | 510 | 510 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | (4,222 | ) | $ | (11,265 | ) | $ | (4,262 | ) | $ | (19,749 | ) | |||||||||||||
(a) | The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “NOTE O – Derivative Instruments and Hedging Activities.” |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Non-Qualified Stock Options | |||||
Assumptions to Value Stock Options | The following assumptions were used to value these stock options: | ||||
Dividend yield | 1.88 | % | |||
Expected volatility | 50.92 | % | |||
Risk-free interest rate | 1.88 | % | |||
Expected term (years) | 6 | ||||
Market-Based Restricted Common Shares | |||||
Assumptions to Value Stock Options | The following assumptions were used to determine the grant-date fair value and the derived service period for these restricted common shares: | ||||
Dividend yield | 1.6 | % | |||
Expected volatility | 44 | % | |||
Risk-free interest rate | 1.7 | % |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Computation of Basic and Diluted Earnings per Share Attributable to Controlling Interest | The following table sets forth the computation of basic and diluted earnings per share attributable to controlling interest for the three and six months ended November 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator (basic & diluted): | |||||||||||||||||
Net earnings attributable to controlling interest – income available to common shareholders | $ | 29,462 | $ | 22,977 | $ | 73,630 | $ | 77,534 | |||||||||
Denominator: | |||||||||||||||||
Denominator for basic earnings per share attributable to controlling interest – weighted average common shares | 67,105 | 69,304 | 67,337 | 69,454 | |||||||||||||
Effect of dilutive securities | 2,076 | 2,522 | 2,443 | 2,635 | |||||||||||||
Denominator for diluted earnings per share attributable to controlling interest – adjusted weighted average common shares | 69,181 | 71,826 | 69,780 | 72,089 | |||||||||||||
Basic earnings per share attributable to controlling interest | $ | 0.44 | $ | 0.33 | $ | 1.09 | $ | 1.12 | |||||||||
Diluted earnings per share attributable to controlling interest | $ | 0.43 | $ | 0.32 | $ | 1.06 | $ | 1.08 |
Segment_Operations_Tables
Segment Operations (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Financial Information for Reportable Segments | Summarized financial information for our reportable segments is shown in the following table: | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Net sales | |||||||||||||||||
Steel Processing | $ | 552,756 | $ | 492,134 | $ | 1,105,087 | $ | 894,575 | |||||||||
Pressure Cylinders | 252,744 | 214,022 | 501,703 | 430,922 | |||||||||||||
Engineered Cabs | 51,540 | 47,868 | 101,094 | 96,329 | |||||||||||||
Other | 13,972 | 15,876 | 25,542 | 40,365 | |||||||||||||
Consolidated net sales | $ | 871,012 | $ | 769,900 | $ | 1,733,426 | $ | 1,462,191 | |||||||||
Operating income (loss) | |||||||||||||||||
Steel Processing | $ | 33,877 | $ | 34,786 | $ | 69,746 | $ | 57,449 | |||||||||
Pressure Cylinders | 9,580 | 8,275 | 29,186 | 27,729 | |||||||||||||
Engineered Cabs | (5,609 | ) | (20,892 | ) | (7,754 | ) | (21,196 | ) | |||||||||
Other | (4,656 | ) | (2,670 | ) | (5,784 | ) | (5,845 | ) | |||||||||
Consolidated operating income | $ | 33,192 | $ | 19,499 | $ | 85,394 | $ | 58,137 | |||||||||
Restructuring and other expense (income) | |||||||||||||||||
Steel Processing | $ | - | $ | - | $ | (30 | ) | $ | (4,762 | ) | |||||||
Pressure Cylinders | 405 | (1,849 | ) | 428 | (1,447 | ) | |||||||||||
Engineered Cabs | - | - | - | - | |||||||||||||
Other | - | 667 | - | 1,030 | |||||||||||||
Consolidated restructuring and other expense (income) | $ | 405 | $ | (1,182 | ) | $ | 398 | $ | (5,179 | ) | |||||||
Impairment of long-lived assets | |||||||||||||||||
Steel Processing | $ | 1,100 | $ | - | $ | 3,050 | $ | 4,641 | |||||||||
Pressure Cylinders | 9,567 | 11,634 | 9,567 | 11,634 | |||||||||||||
Engineered Cabs | 2,389 | 19,100 | 2,389 | 19,100 | |||||||||||||
Other | 1,179 | - | 1,179 | - | |||||||||||||
Consolidated impairment of long-lived assets | $ | 14,235 | $ | 30,734 | $ | 16,185 | $ | 35,375 | |||||||||
Joint venture transactions | |||||||||||||||||
Steel Processing | $ | - | $ | - | $ | - | $ | - | |||||||||
Pressure Cylinders | - | - | - | - | |||||||||||||
Engineered Cabs | - | - | - | - | |||||||||||||
Other | 83 | 786 | 190 | 928 | |||||||||||||
Consolidated joint venture transactions | $ | 83 | $ | 786 | $ | 190 | $ | 928 | |||||||||
(in thousands) | November 30, | May 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Total assets | |||||||||||||||||
Steel Processing | $ | 875,269 | $ | 850,748 | |||||||||||||
Pressure Cylinders | 870,789 | 818,720 | |||||||||||||||
Engineered Cabs | 178,761 | 181,251 | |||||||||||||||
Other | 382,572 | 445,662 | |||||||||||||||
Consolidated total assets | $ | 2,307,391 | $ | 2,296,381 | |||||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
DHybrid Systems Llc | |||||||||
Schedule of Acquisition of Intangible Assets | In connection with the acquisition of the net assets of dHybrid, we identified and valued the following identifiable intangible assets: | ||||||||
(in thousands) | Useful Life | ||||||||
Category | Amount | (Years) | |||||||
Technological know-how | $ | 3,100 | 10 | ||||||
Customer relationships | 600 | 7 | |||||||
Backlog | 88 | Less than 1 | |||||||
Total acquired identifiable intangible assets | $ | 3,788 | |||||||
Schedule of Consideration Transferred and Fair Value Assigned to Assets Acquired And Liabilities Assumed | The following table summarizes the consideration transferred for our 79.59% interest in dHybrid and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | ||||||||
(in thousands) | |||||||||
Consideration Transferred: | |||||||||
Cash consideration | $ | 11,939 | |||||||
Fair value of contingent consideration | 3,979 | ||||||||
Total consideration | $ | 15,918 | |||||||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||||||||
Cash and cash equivalents | $ | 795 | |||||||
Accounts receivable | 1,459 | ||||||||
Inventories | 3,300 | ||||||||
Prepaid expenses and other current assets | 38 | ||||||||
Intangible assets | 3,788 | ||||||||
Property, plant and equipment | 396 | ||||||||
Total identifiable assets | 9,776 | ||||||||
Accounts payable | (1,163 | ) | |||||||
Accrued liabilities | (160 | ) | |||||||
Long-term debt | (5,000 | ) | |||||||
Net identifiable assets | 3,453 | ||||||||
Goodwill | 16,547 | ||||||||
Net assets | 20,000 | ||||||||
Noncontrolling interest | (4,082 | ) | |||||||
Total consideration | $ | 15,918 | |||||||
MEF | |||||||||
Schedule of Acquisition of Intangible Assets | In connection with the acquisition of the net assets of MEF, we identified and valued the following identifiable intangible assets: | ||||||||
(in thousands) | Useful Life | ||||||||
Category | Amount | (Years) | |||||||
Technological know-how | $ | 5,100 | 10 | ||||||
Customer relationships | 4,300 | 7 | |||||||
Non-compete agreements | 2,400 | 4 | |||||||
Backlog | 1,800 | Less than 1 | |||||||
Total acquired identifiable intangible assets | $ | 13,600 | |||||||
Schedule of Consideration Transferred and Fair Value Assigned to Assets Acquired And Liabilities Assumed | The following table summarizes the consideration transferred for the net assets of MEF and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | ||||||||
(in thousands) | |||||||||
Accounts receivable | $ | 3,329 | |||||||
Inventories | 3,550 | ||||||||
Intangible assets | 13,600 | ||||||||
Property, plant and equipment | 166 | ||||||||
Total identifiable assets | 20,645 | ||||||||
Accounts payable | (555 | ) | |||||||
Other accrued items | (92 | ) | |||||||
Deferred revenue | (4,808 | ) | |||||||
Net assets | 15,190 | ||||||||
Goodwill | 23,202 | ||||||||
Purchase price | 38,392 | ||||||||
Less: estimated excess working capital | 3,160 | ||||||||
Cash paid at closing | $ | 35,232 | |||||||
JRE | |||||||||
Schedule of Consideration Transferred and Fair Value Assigned to Assets Acquired And Liabilities Assumed | The following table summarizes the consideration transferred for the net assets of JRE and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date: | ||||||||
(in thousands) | |||||||||
Cash | $ | 253 | |||||||
Accounts receivable | 509 | ||||||||
Inventories | 2,793 | ||||||||
Prepaid expense and other current assets | 40 | ||||||||
Property, plant and equipment | 250 | ||||||||
Total identifiable assets | 3,845 | ||||||||
Accounts payable | (514 | ) | |||||||
Other accrued items | (2,160 | ) | |||||||
Net identifiable assets | 1,171 | ||||||||
Goodwill | 400 | ||||||||
Total cash consideration | $ | 1,571 | |||||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended | ||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||
Schedule of Fair Value of Derivative Instruments | The following table summarizes the fair value of our derivative instruments and the respective financial statement caption in which they were recorded in our consolidated balance sheet at November 30, 2014: | ||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
(in thousands) | Balance | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | ||||||||||||||||
Location | Location | ||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Interest rate contracts | Receivables | $ | - | Accounts payable | $ | 2,102 | |||||||||||||
Other assets | - | Other liabilities | 183 | ||||||||||||||||
- | 2,285 | ||||||||||||||||||
Foreign exchange contracts | Receivables | 106 | Accounts payable | - | |||||||||||||||
Commodity contracts | Receivables | - | Accounts payable | 3,444 | |||||||||||||||
Totals | $ | 106 | $ | 5,729 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Commodity contracts | Receivables | $ | 231 | Accounts payable | $ | 595 | |||||||||||||
Totals | $ | 231 | $ | 595 | |||||||||||||||
Total Derivative Instruments | $ | 337 | $ | 6,324 | |||||||||||||||
The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $324,000 increase in receivables with a corresponding increase in accounts payable. | |||||||||||||||||||
The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2014: | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | ||||||||||||||||||
(in thousands) | Balance | Fair | Balance | Fair | |||||||||||||||
Sheet | Value | Sheet | Value | ||||||||||||||||
Location | Location | ||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Interest rate contracts | Receivables | $ | - | Accounts payable | $ | 4,180 | |||||||||||||
Commodity contracts | Receivables | 456 | Accounts payable | - | |||||||||||||||
Totals | $ | 456 | $ | 4,180 | |||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Commodity contracts | Receivables | $ | 796 | Accounts payable | $ | 295 | |||||||||||||
Foreign exchange contracts | Receivables | 32 | Accounts payable | - | |||||||||||||||
Totals | $ | 828 | $ | 295 | |||||||||||||||
Total Derivative Instruments | $ | 1,284 | $ | 4,475 | |||||||||||||||
Schedule of Derivatives Designated as Cash Flow Hedging Instruments | The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from accumulated OCI into earnings for derivative instruments designated as cash flow hedges during the three months ended November 30, 2014 and 2013: | ||||||||||||||||||
(in thousands) | Gain (Loss) | Location of | Gain (Loss) | Location of | Gain (Loss) | ||||||||||||||
Recognized | Gain (Loss) | Reclassified | Gain (Loss) | (Ineffective | |||||||||||||||
in OCI | Reclassified | from | (Ineffective | Portion) | |||||||||||||||
(Effective | from | Accumulated | Portion) | and Excluded | |||||||||||||||
Portion) | Accumulated | OCI | and Excluded | from | |||||||||||||||
OCI | (Effective | from | Effectiveness | ||||||||||||||||
(Effective | Portion) | Effectiveness | Testing | ||||||||||||||||
Portion) | Testing | ||||||||||||||||||
For the three months ended November 30, 2014: | |||||||||||||||||||
Interest rate contracts | $ | - | Interest expense | $ | (1,137 | ) | Interest expense | $ | - | ||||||||||
Commodity contracts | (4,362 | ) | Cost of goods sold | (356 | ) | Cost of goods sold | - | ||||||||||||
Foreign currency contracts | (103 | ) | Miscellaneous income | - | Miscellaneous income | - | |||||||||||||
Totals | $ | (4,465 | ) | $ | (1,493 | ) | $ | - | |||||||||||
For the three months ended November 30, 2013: | |||||||||||||||||||
Interest rate contracts | $ | (181 | ) | Interest expense | $ | (1,057 | ) | Interest expense | $ | - | |||||||||
Commodity contracts | (1,047 | ) | Cost of goods sold | (812 | ) | Cost of goods sold | - | ||||||||||||
Totals | $ | (1,228 | ) | $ | (1,869 | ) | $ | - | |||||||||||
The following table summarizes the gain (loss) recognized in OCI and the gain (loss) reclassified from accumulated OCI into earnings for derivative instruments designated as cash flow hedges during the six months ended November 30, 2014 and 2013: | |||||||||||||||||||
(in thousands) | Gain (Loss) | Location of | Gain (Loss) | Location of | Gain (Loss) | ||||||||||||||
Recognized | Gain (Loss) | Reclassified | Gain (Loss) | (Ineffective | |||||||||||||||
in OCI | Reclassified | from | (Ineffective | Portion) | |||||||||||||||
(Effective | from | Accumulated | Portion) | and Excluded | |||||||||||||||
Portion) | Accumulated | OCI | and Excluded | from | |||||||||||||||
OCI | (Effective | from | Effectiveness | ||||||||||||||||
(Effective | Portion) | Effectiveness | Testing | ||||||||||||||||
Portion) | Testing | ||||||||||||||||||
For the six months ended November 30, 2014: | |||||||||||||||||||
Interest rate contracts | $ | - | Interest expense | $ | (2,285 | ) | Interest expense | $ | - | ||||||||||
Commodity contracts | (4,775 | ) | Cost of goods sold | (1,152 | ) | Cost of goods sold | - | ||||||||||||
Foreign currency contracts | (103 | ) | Miscellaneous income | - | Miscellaneous income | - | |||||||||||||
Totals | $ | (4,878 | ) | $ | (3,437 | ) | $ | - | |||||||||||
For the six months ended November 30, 2013: | |||||||||||||||||||
Interest rate contracts | $ | (384 | ) | Interest expense | $ | (2,120 | ) | Interest expense | $ | - | |||||||||
Commodity contracts | 2,617 | Cost of goods sold | (1,128 | ) | Cost of goods sold | - | |||||||||||||
Totals | $ | 2,233 | $ | (3,248 | ) | $ | - | ||||||||||||
Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments | The following table summarizes the loss recognized in earnings for economic (non-designated) derivative financial instruments during the three months ended November 30, 2014 and 2013: | ||||||||||||||||||
Location of Loss | Loss Recognized | ||||||||||||||||||
in Earnings for the | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
November 30, | |||||||||||||||||||
(in thousands) | Recognized in Earnings | 2014 | 2013 | ||||||||||||||||
Commodity contracts | Cost of goods sold | $ | (2,360 | ) | $ | (394 | ) | ||||||||||||
Foreign currency contracts | Miscellaneous income (expense) | (218 | ) | - | |||||||||||||||
Total | $ | (2,578 | ) | $ | (394 | ) | |||||||||||||
The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments during the six months ended November 30, 2014 and 2013: | |||||||||||||||||||
Location of Gain (Loss) | Gain (Loss) Recognized | ||||||||||||||||||
in Earnings for the | |||||||||||||||||||
Six Months Ended | |||||||||||||||||||
November 30, | |||||||||||||||||||
(in thousands) | Recognized in Earnings | 2014 | 2013 | ||||||||||||||||
Commodity contracts | Cost of goods sold | $ | (2,417 | ) | $ | 282 | |||||||||||||
Foreign currency contracts | Miscellaneous income (expense) | 43 | (5 | ) | |||||||||||||||
Total | $ | (2,374 | ) | $ | 277 | ||||||||||||||
Cash Flow Hedges | |||||||||||||||||||
Schedule of Summary of Derivative Hedges | The following table summarizes our cash flow hedges outstanding at November 30, 2014: | ||||||||||||||||||
(in thousands) | Notional | Maturity Date | |||||||||||||||||
Amount | |||||||||||||||||||
Commodity contracts | $ | 57,368 | December 2014 - July 2016 | ||||||||||||||||
Interest rate contracts | 120,000 | December 2014 - September 2019 | |||||||||||||||||
Foreign currency contracts | 11,168 | December 2014 - June 2015 | |||||||||||||||||
Derivatives Not Designated As Hedging Instruments | |||||||||||||||||||
Schedule of Summary of Derivative Hedges | The following table summarizes our economic (non-designated) derivative instruments outstanding at November 30, 2014: | ||||||||||||||||||
(in thousands) | Notional | Maturity Date(s) | |||||||||||||||||
Amount | |||||||||||||||||||
Commodity contracts | $ | 57,607 | December 2014 - June 2016 |
Fair_Value_Tables
Fair Value (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | At November 30, 2014, our financial assets and liabilities measured at fair value on a recurring basis were as follows: | ||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 337 | $ | - | $ | 337 | |||||||||
Total assets | $ | - | $ | 337 | $ | - | $ | 337 | |||||||||
Liabilities | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 6,324 | $ | - | $ | 6,324 | |||||||||
Contingent consideration obligation (2) | - | - | 3,979 | 3,979 | |||||||||||||
Total liabilities | $ | - | $ | 6,324 | $ | 3,979 | $ | 10,303 | |||||||||
At May 31, 2014, our financial assets and liabilities measured at fair value on a recurring basis were as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 1,284 | $ | - | $ | 1,284 | |||||||||
Total assets | $ | - | $ | 1,284 | $ | - | $ | 1,284 | |||||||||
Liabilities | |||||||||||||||||
Derivative contracts (1) | $ | - | $ | 4,475 | $ | - | $ | 4,475 | |||||||||
Contingent consideration obligation (2) | - | - | 404 | 404 | |||||||||||||
Total liabilities | $ | - | $ | 4,475 | $ | 404 | $ | 4,879 | |||||||||
-1 | The fair value of our derivative contracts 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 O – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments. | ||||||||||||||||
-2 | The fair value of the Company’s contingent consideration obligations is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired businesses. The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements. | ||||||||||||||||
Assets and Liabilities Measured at Fair Value on Non-recurring Basis | At November 30, 2014, our financial assets and liabilities measured at fair value on a non-recurring basis were as follows: | ||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Long-lived assets held for sale (1) | $ | - | $ | 21,821 | $ | - | $ | 21,821 | |||||||||
Long-lived assets held and used (2) | - | 3,750 | - | 3,750 | |||||||||||||
Total assets | $ | - | $ | 25,571 | $ | - | $ | 25,571 | |||||||||
-1 | During the fourth quarter of fiscal 2014, management committed to a plan to sell certain non-core Steel Processing assets. As all of the criteria for classification as assets held for sale were met, the net assets of this business, which consist of net working capital and property, plant and equipment, have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014 and May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale during fiscal 2015, the Company reassessed the fair value of this business and determined that additional impairment charges of $3,050,000 were required for the six months ended November 30, 2014. Fair value of $19,402,000 was determined based on market prices for similar assets. | ||||||||||||||||
During the second quarter of fiscal 2015, management committed to a plan to sell certain non-core Engineered Cabs assets. As all of the criteria for classification as assets held for sale were met, the net assets of the business have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $2,389,000 during the three months ended November 30, 2014. Fair value of $2,419,000 was determined based on market prices for similar assets. | |||||||||||||||||
-2 | During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $3,750,000, resulting in an impairment charge of $3,221,000 during the three months ended November 30, 2014. | ||||||||||||||||
During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company’s military construction business. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $1,179,000 during the three months ended November 30, 2014, which represents the remaining book value of the asset group. | |||||||||||||||||
During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company’s 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. As all of the criteria for classification as assets held for sale were met, the net assets of the business were presented separately as assets held for sale in our consolidated balance sheet as of May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale of Worthington Nitin Cylinders during the second quarter of fiscal 2015, the Company reassessed the fair value of the business and determined that the remaining book value should be written off resulting in an impairment charge of $6,346,000. | |||||||||||||||||
At May 31, 2014, our assets measured at fair value on a non-recurring basis were categorized as follows: | |||||||||||||||||
(in thousands) | Quoted Prices | Significant | Significant | Totals | |||||||||||||
in Active | Other | Unobservable | |||||||||||||||
Markets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
Assets | |||||||||||||||||
Long-lived assets held for sale (1) | $ | - | $ | 25,040 | $ | - | $ | 25,040 | |||||||||
Long-lived assets held and used (2) | - | 7,034 | - | 7,034 | |||||||||||||
Total assets | $ | - | $ | 32,074 | $ | - | $ | 32,074 | |||||||||
-1 | During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company’s 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $5,925,000, was lower than its net book value, an impairment charge of $18,959,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. The portion of this impairment loss attributable to the noncontrolling interest, or $7,583,000, was recorded within net earnings attributable to noncontrolling interest in our fiscal 2014 consolidated statement of earnings. | ||||||||||||||||
During the fourth quarter of fiscal 2014, management committed to plans to sell certain non-core Steel Processing assets. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $19,115,000, was lower than its net book value, an impairment charge of $7,141,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. | |||||||||||||||||
-2 | During the fourth quarter of fiscal 2014, we determined that indicators of impairment were present at the Company’s aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management’s long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $7,034,000, resulting in an impairment charge of $1,412,000 within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (Joint Venture Transactions) | Nov. 30, 2014 | 31-May-14 |
DHybrid Systems Llc | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 79.59% | |
Spartan | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 52.00% | |
TWB | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 55.00% | |
Worthington Aritas | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 75.00% | |
WEI | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 75.00% | |
Worthington Nitin Cylinders | ||
Basis of Presentation [Line Items] | ||
Percent of controlling interest by the Company | 60.00% | 60.00% |
Investments_in_Unconsolidated_2
Investments in Unconsolidated Affiliates - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Jul. 31, 2013 | |
Investments in and Advances to Affiliates [Line Items] | |||||
Distributions from unconsolidated affiliates | $42,569,000 | ||||
Distributions from (investments in) unconsolidated affiliates | 129,000 | 3,668,000 | -3,671,000 | 9,223,000 | |
ClarkDietrich | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Distributions from (investments in) unconsolidated affiliates | 129,000 | ||||
WAVE | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Cumulative distributions in excess of investment | $59,576,000 | ||||
Joint Venture Transactions | TWB | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percentage of additional interest acquired by the company | 10.00% | ||||
Joint Venture Transactions | ArtiFlex | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 50.00% | 50.00% | |||
Joint Venture Transactions | ClarkDietrich | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 25.00% | 25.00% | |||
Joint Venture Transactions | Samuel Steel Pickling Company | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 31.25% | 31.25% | |||
Joint Venture Transactions | Seviacero | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 50.00% | 50.00% | |||
Joint Venture Transactions | WAVE | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 50.00% | 50.00% | |||
Joint Venture Transactions | Worthington Specialty Processing | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 51.00% | 51.00% | |||
Joint Venture Transactions | Zhejiang Nisshin Worthington Precision Specialty Steel Co | |||||
Investments in and Advances to Affiliates [Line Items] | |||||
Percent of interest by unconsolidated affiliates | 10.00% | 10.00% |
Schedule_of_Combined_Financial
Schedule of Combined Financial Information for Unconsolidated Affiliates (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |||
Investments in and Advances to Affiliates [Line Items] | ||||||||
Cash | $53,333 | $53,333 | $52,997 | |||||
Receivable from member | 8,635 | [1] | 8,635 | [1] | 12,717 | [1] | ||
Other current assets | 470,266 | 470,266 | 454,417 | |||||
Noncurrent assets | 290,261 | 290,261 | 294,001 | |||||
Total assets | 822,495 | 822,495 | 814,132 | |||||
Current liabilities | 156,959 | 156,959 | 128,595 | |||||
Short-term borrowings | 16,178 | 16,178 | 40,992 | |||||
Current maturities of long-term debt | 4,460 | 4,460 | 4,510 | |||||
Long-term debt | 266,107 | 266,107 | 268,350 | |||||
Other noncurrent liabilities | 18,664 | 18,664 | 20,217 | |||||
Equity | 360,127 | 360,127 | 351,468 | |||||
Total liabilities and equity | 822,495 | 822,495 | 814,132 | |||||
Net sales | 388,712 | 357,236 | 781,262 | 780,717 | ||||
Gross margin | 76,193 | 76,068 | 164,945 | 165,882 | ||||
Operating income | 49,864 | 51,532 | 113,343 | 116,072 | ||||
Depreciation and amortization | 8,983 | 9,104 | 18,105 | 19,441 | ||||
Interest expense | 2,173 | 2,233 | 4,335 | 4,456 | ||||
Income tax expense | 2,799 | 2,862 | 5,552 | 5,892 | ||||
Net earnings | $44,490 | $46,149 | $103,930 | $105,783 | ||||
[1] | Represents cash owed from a joint venture member as a result of centralized cash management. |
Impairment_of_LongLived_Assets1
Impairment of Long-Lived Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 |
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | $14,235 | $30,734 | $16,185 | $35,375 | |
Worthington Nitin Cylinders | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | 18,959 | ||||
Joint Venture Transactions | Worthington Nitin Cylinders | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | 6,346 | ||||
Percent of controlling interest by the Company | 60.00% | 60.00% | 60.00% | ||
Non Core Steel Processing Assets | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | 3,050 | ||||
Aluminium High Pressure Cylinder Business | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | 3,221 | ||||
Engineered Cabs | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | 2,389 | ||||
Military Construction Business | |||||
Asset Impairment Charges [Line Items] | |||||
Impairment of long-lived assets | $1,179 |
Schedule_of_Progression_of_Lia
Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Expense (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | $7,029 | |||
Expense (Income) | 588 | |||
Payments | -4,784 | |||
Adjustments | 240 | |||
Ending Balance | 3,073 | 3,073 | ||
Less: joint venture transactions | -83 | -786 | -190 | -928 |
Restructuring and other expense | 405 | -1,182 | 398 | -5,179 |
Early Retirement And Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 6,495 | |||
Expense (Income) | -30 | |||
Payments | -3,852 | |||
Adjustments | 30 | |||
Ending Balance | 2,643 | 2,643 | ||
Facility Exit And Other Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 534 | |||
Expense (Income) | 618 | |||
Payments | -932 | |||
Adjustments | 210 | |||
Ending Balance | $430 | $430 |
Restructuring_and_Other_Expens2
Restructuring and Other Expense - Additional Information (Detail) (USD $) | Nov. 30, 2014 |
Restructuring Cost and Reserve [Line Items] | |
Future payments for restructuring | $2,753,000 |
Contingent_Liabilities_Additio
Contingent Liabilities - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2014 | Nov. 30, 2014 | |
Commitment And Contingencies [Line Items] | ||
Insurance proceeds for replacement value of damaged property and equipment | $1,089,000 | $11,721,000 |
Book value of assets | 243,000 | |
Gain on damaged property and equipment | 846,000 | |
Business interruption | ||
Commitment And Contingencies [Line Items] | ||
Insurance proceeds for replacement value of damaged property and equipment | 3,940,000 | |
Other expenses | ||
Commitment And Contingencies [Line Items] | ||
Insurance proceeds for replacement value of damaged property and equipment | 1,001,000 | |
Manufacturing Expense | Business interruption | ||
Commitment And Contingencies [Line Items] | ||
Insurance proceeds for replacement value of damaged property and equipment | 1,072,000 | |
Manufacturing Expense | Other expenses | ||
Commitment And Contingencies [Line Items] | ||
Insurance proceeds for replacement value of damaged property and equipment | $256,000 |
Total_Proceeds_Received_relate
Total Proceeds Received related to Insurance Claims since Date of Loss (Detail) (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2014 | Nov. 30, 2014 | |
Unusual or Infrequent Item [Line Items] | ||
Total insurance proceeds | $1,089,000 | $11,721,000 |
Property and equipment | ||
Unusual or Infrequent Item [Line Items] | ||
Total insurance proceeds | 6,780,000 | |
Business interruption | ||
Unusual or Infrequent Item [Line Items] | ||
Total insurance proceeds | 3,940,000 | |
Other expenses | ||
Unusual or Infrequent Item [Line Items] | ||
Total insurance proceeds | $1,001,000 |
Guarantees_Additional_Informat
Guarantees - Additional Information (Detail) (USD $) | Nov. 30, 2014 |
Residual Value Guarantee | |
Loss Contingencies [Line Items] | |
Maximum potential obligation | $12,395,000 |
Guarantee Repayment | |
Loss Contingencies [Line Items] | |
Maximum potential obligation | $2,500,000 |
Debt_and_Receivables_Securitiz1
Debt and Receivables Securitization - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended | 0 Months Ended |
Oct. 15, 2014 | Nov. 30, 2014 | Sep. 26, 2014 | |
Debt And Receivables Securitization [Line Items] | |||
Remaining borrowing capacity | $413,268,000 | ||
Interest Rate Swap | |||
Debt And Receivables Securitization [Line Items] | |||
Borrowings outstanding | 19,406,000 | ||
Interest rate swap, interest rate | 2.02% | ||
Interest rate swap, start date | 26-Dec-14 | ||
Interest rate swap, maturity date | 26-Sep-19 | ||
Worthington Aritas | |||
Debt And Receivables Securitization [Line Items] | |||
Borrowings outstanding | 4,095,000 | ||
Maturity date | 2015-03 | ||
Debt, Interest rate | 5.60% | ||
Worthington Nitin Cylinders | |||
Debt And Receivables Securitization [Line Items] | |||
Maximum borrowing capacity | 9,500,000 | ||
Borrowings outstanding | 6,674,000 | ||
Applicable variable rate | 8.54% | ||
Maturity date | 2014-11 | ||
Securities Sold under Agreements to Repurchase | |||
Debt And Receivables Securitization [Line Items] | |||
Maximum borrowing capacity | 100,000,000 | ||
Borrowings outstanding | 0 | ||
Maturity date | 2015-01 | ||
Number of days past due trade accounts receivables are ineligible for securitization | 90 days | ||
Financial Stand-By Letters Of Credit | |||
Debt And Receivables Securitization [Line Items] | |||
Outstanding stand-by letters of credit amount for third-party beneficiaries | 13,998,000 | ||
Draws On Credit Facility | |||
Debt And Receivables Securitization [Line Items] | |||
Outstanding stand-by letters of credit amount for third-party beneficiaries | 11,732,000 | ||
Worthington Aritas | |||
Debt And Receivables Securitization [Line Items] | |||
Maximum borrowing capacity | 32,344,000 | ||
Term loan credit facility, term | 5 years | ||
Borrowings outstanding | 19,745,000 | ||
Remaining borrowing capacity | 12,599,000 | ||
Applicable variable rate | 1.58% | ||
Unsecured Revolving Credit Facility | |||
Debt And Receivables Securitization [Line Items] | |||
Maximum borrowing capacity | 425,000,000 | ||
Borrowings outstanding | $0 | ||
Maturity date | 2017-05 | ||
Maximum | Line of Credit | |||
Debt And Receivables Securitization [Line Items] | |||
Debt maturity period | 1 year |
Summary_of_Tax_Effects_of_Each
Summary of Tax Effects of Each Component of Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Before-Tax | ||||
Foreign currency translation, before tax | ($7,270) | $3,037 | ($16,862) | $2,551 |
Cash flow hedges, before tax | -2,973 | 661 | -1,430 | 5,481 |
Other comprehensive income (loss), before tax | -10,243 | 3,698 | -18,292 | 8,032 |
Tax | ||||
Foreign currency translation, tax | 0 | 0 | 0 | 0 |
Cash flow hedges, tax | 1,092 | -308 | 510 | -1,777 |
Other comprehensive income (loss), tax | 1,092 | -308 | 510 | -1,777 |
Net-of-tax | ||||
Foreign currency translation, net-of-tax | -7,270 | 3,037 | -16,862 | 2,551 |
Cash flow hedges, net-of-tax | -1,881 | 353 | -920 | 3,704 |
Other comprehensive income (loss), net-of-tax | ($9,151) | $3,390 | ($17,782) | $6,255 |
Summary_of_Changes_in_Total_Eq
Summary of Changes in Total Equity, Shareholders' Equity Attributable to Controlling Interest, and Equity Attributable to Noncontrolling Interest (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Beginning Balance | $944,882 | |||
Net earnings | 31,455 | 28,340 | 80,275 | 84,693 |
Other comprehensive loss | -9,151 | 3,390 | -17,782 | 6,255 |
Common shares issued, net of withholding tax | -454 | |||
Common shares in NQ plans | 14,227 | |||
Stock-based compensation | 16,628 | |||
Purchases and retirement of common shares | -41,620 | |||
Cash dividends declared | -24,553 | |||
Acquisition of dHybrid Systems, LLC | 4,082 | |||
Dividend to noncontrolling interest | -4,677 | |||
Ending Balance | 971,008 | 971,008 | ||
Additional Paid-in Capital | ||||
Beginning Balance | 262,610 | |||
Common shares issued, net of withholding tax | -454 | |||
Common shares in NQ plans | 14,227 | |||
Stock-based compensation | 16,628 | |||
Purchases and retirement of common shares | -4,350 | |||
Ending Balance | 288,661 | 288,661 | ||
Cumulative Other Comprehensive Income (Loss), Net of Tax | ||||
Beginning Balance | -3,581 | |||
Other comprehensive loss | -16,168 | |||
Ending Balance | -19,749 | -19,749 | ||
Retained Earnings | ||||
Beginning Balance | 591,783 | |||
Net earnings | 73,630 | |||
Purchases and retirement of common shares | -37,270 | |||
Cash dividends declared | -24,553 | |||
Ending Balance | 603,590 | 603,590 | ||
Parent | ||||
Beginning Balance | 850,812 | |||
Net earnings | 73,630 | |||
Other comprehensive loss | -16,168 | |||
Common shares issued, net of withholding tax | -454 | |||
Common shares in NQ plans | 14,227 | |||
Stock-based compensation | 16,628 | |||
Purchases and retirement of common shares | -41,620 | |||
Cash dividends declared | -24,553 | |||
Ending Balance | 872,502 | 872,502 | ||
Noncontrolling Interest | ||||
Beginning Balance | 94,070 | |||
Net earnings | 6,645 | |||
Other comprehensive loss | -1,614 | |||
Acquisition of dHybrid Systems, LLC | 4,082 | |||
Dividend to noncontrolling interest | -4,677 | |||
Ending Balance | $98,506 | $98,506 |
Components_of_Changes_in_Other
Components of Changes in Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, beginning balance | ($3,581) | |||||
Other comprehensive loss before reclassifications | -20,115 | |||||
Reclassification adjustments to income | 3,437 | [1] | ||||
Income taxes | 1,092 | -308 | 510 | -1,777 | ||
Accumulated other comprehensive loss, ending balance | -19,749 | -19,749 | ||||
Foreign Currency Translation | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, beginning balance | 11,015 | |||||
Other comprehensive loss before reclassifications | -15,237 | |||||
Accumulated other comprehensive loss, ending balance | -4,222 | -4,222 | ||||
Pension Liability Adjustment | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, beginning balance | -11,265 | |||||
Accumulated other comprehensive loss, ending balance | -11,265 | -11,265 | -11,265 | |||
Cash Flow Hedges | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated other comprehensive loss, beginning balance | -3,331 | |||||
Other comprehensive loss before reclassifications | -4,878 | |||||
Reclassification adjustments to income | 3,437 | [1] | ||||
Income taxes | 510 | |||||
Accumulated other comprehensive loss, ending balance | ($4,262) | ($4,262) | ||||
[1] | The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in "NOTE O - Derivative Instruments and Hedging Activities." |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 6 Months Ended |
Nov. 30, 2014 | |
Non-Qualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-qualified stock options, granted | 96,200 |
Non-qualified stock option, per share price | $43.04 |
Non-qualified stock option, fair value, per share price | $17.96 |
Pre-tax stock-based compensation | $1,538,000 |
Pre-tax stock-based compensation, period of recognition | 3 years |
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 |
Performance share awards granted | 231,515 |
Restricted common shares, fair value per share | $40.40 |
Pre-tax stock-based compensation | 8,415,000 |
Market-Based Restricted Common Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance share awards granted | 50,000 |
Restricted common shares, fair value per share | $32.06 |
Pre-tax stock-based compensation | 1,603,000 |
Number of employees who received restricted common shares | 2 |
Common share awards vesting, minimum price per share | $60 |
Common share awards vesting, minimum consecutive days at stated price | 30 days |
Service-based vesting condition period, years | 5 years |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Pre-tax stock-based compensation, period of recognition | 3 years |
Performance share awards granted | 62,000 |
Pre-tax stock-based compensation | $2,648,000 |
Assumptions_To_Value_Stock_Opt
Assumptions To Value Stock Options (Detail) | 6 Months Ended |
Nov. 30, 2014 | |
Non-Qualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 1.88% |
Expected volatility | 50.92% |
Risk-free interest rate | 1.88% |
Expected term (years) | 6 years |
Market-Based Restricted Common Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 1.60% |
Expected volatility | 44.00% |
Risk-free interest rate | 1.70% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) | 6 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Income Taxes [Line Items] | ||
Estimated annual effective income tax rate | 33.50% | 27.80% |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Earnings per Share Attributable to Controlling Interest (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Numerator (basic & diluted): | ||||
Net earnings attributable to controlling interest - income available to common shareholders | $29,462 | $22,977 | $73,630 | $77,534 |
Denominator: | ||||
Denominator for basic earnings per share attributable to controlling interest - weighted average common shares | 67,105 | 69,304 | 67,337 | 69,454 |
Effect of dilutive securities | 2,076 | 2,522 | 2,443 | 2,635 |
Denominator for diluted earnings per share attributable to controlling interest - adjusted weighted average common shares | 69,181 | 71,826 | 69,780 | 72,089 |
Basic earnings per share attributable to controlling interest | $0.44 | $0.33 | $1.09 | $1.12 |
Diluted earnings per share attributable to controlling interest | $0.43 | $0.32 | $1.06 | $1.08 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options excluded from computation of diluted earnings per share | 147,859 | 396 | 113,744 | 197 |
Financial_Information_for_Repo
Financial Information for Reportable Segments (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 |
Segment Reporting Information [Line Items] | |||||
Net sales | $871,012 | $769,900 | $1,733,426 | $1,462,191 | |
Operating income (loss) | 33,192 | 19,499 | 85,394 | 58,137 | |
Restructuring and other expense (income) | 405 | -1,182 | 398 | -5,179 | |
Impairment of long-lived assets | 14,235 | 30,734 | 16,185 | 35,375 | |
Joint venture transactions | 83 | 786 | 190 | 928 | |
Total assets | 2,307,391 | 2,307,391 | 2,296,381 | ||
Steel Processing | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 552,756 | 492,134 | 1,105,087 | 894,575 | |
Operating income (loss) | 33,877 | 34,786 | 69,746 | 57,449 | |
Restructuring and other expense (income) | -30 | -4,762 | |||
Impairment of long-lived assets | 1,100 | 3,050 | 4,641 | ||
Total assets | 875,269 | 875,269 | 850,748 | ||
Pressure Cylinders | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 252,744 | 214,022 | 501,703 | 430,922 | |
Operating income (loss) | 9,580 | 8,275 | 29,186 | 27,729 | |
Restructuring and other expense (income) | 405 | -1,849 | 428 | -1,447 | |
Impairment of long-lived assets | 9,567 | 11,634 | 9,567 | 11,634 | |
Total assets | 870,789 | 870,789 | 818,720 | ||
Engineered Cabs | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 51,540 | 47,868 | 101,094 | 96,329 | |
Operating income (loss) | -5,609 | -20,892 | -7,754 | -21,196 | |
Impairment of long-lived assets | 2,389 | 19,100 | 2,389 | 19,100 | |
Total assets | 178,761 | 178,761 | 181,251 | ||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 13,972 | 15,876 | 25,542 | 40,365 | |
Operating income (loss) | -4,656 | -2,670 | -5,784 | -5,845 | |
Restructuring and other expense (income) | 667 | 1,030 | |||
Impairment of long-lived assets | 1,179 | 1,179 | |||
Joint venture transactions | 83 | 786 | 190 | 928 | |
Total assets | $382,572 | $382,572 | $445,662 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2014 | Nov. 30, 2014 | |
MEF | ||
Business Acquisition [Line Items] | ||
Business acquisition, date of acquisition agreement | 1-Aug-14 | |
Total consideration for acquired entity | $38,392,000 | |
Cash consideration for acquired entity | 35,232,000 | |
Working capital paid | 3,399,000 | |
Acquisition related costs | 273,000 | 273,000 |
JRE | ||
Business Acquisition [Line Items] | ||
Business acquisition, date of acquisition agreement | 31-Jul-14 | |
Cash consideration for acquired entity | 1,571,000 | |
DHybrid Systems Llc | ||
Business Acquisition [Line Items] | ||
Business acquisition, date of acquisition agreement | 20-Oct-14 | |
Percentage of additional interest acquired by the company | 79.59% | 79.59% |
Percentage of interest attributable to non-controlling interest | 20.41% | 20.41% |
Total consideration for acquired entity | 15,918,000 | |
Contingent consideration estimated fair value | 3,979,000 | 3,979,000 |
Contingent consideration to be paid upon achievement of net sales and gross margin thresholds | 3,979,000 | 3,979,000 |
Cumulative net sales threshold beginning January 1, 2013 | 20,000,000 | 20,000,000 |
Gross margin threshold | 50.00% | |
Cash consideration for acquired entity | $11,939,000 |
Schedule_of_Acquisition_of_Int
Schedule of Acquisition of Intangible Assets (Detail) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Nov. 30, 2014 |
MEF | |
Business Acquisition [Line Items] | |
Total acquired identifiable intangible assets | $13,600 |
MEF | Technological know-how | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 5,100 |
Useful Life (Years | 10 years |
MEF | Customer relationships | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 4,300 |
Useful Life (Years | 7 years |
MEF | Non-compete agreements | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 2,400 |
Useful Life (Years | 4 years |
MEF | Backlog | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 1,800 |
MEF | Backlog | Maximum | |
Business Acquisition [Line Items] | |
Useful Life (Years | 1 year |
DHybrid Systems Llc | |
Business Acquisition [Line Items] | |
Total acquired identifiable intangible assets | 3,788 |
DHybrid Systems Llc | Technological know-how | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 3,100 |
Useful Life (Years | 10 years |
DHybrid Systems Llc | Customer relationships | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 600 |
Useful Life (Years | 7 years |
DHybrid Systems Llc | Backlog | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | $88 |
DHybrid Systems Llc | Backlog | Maximum | |
Business Acquisition [Line Items] | |
Useful Life (Years | 1 year |
Schedule_of_Consideration_Tran
Schedule of Consideration Transferred and Fair Value Assigned to Assets Acquired And Liabilities Assumed (Detail) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | 31-May-14 |
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | ||
Goodwill | $283,418 | $251,093 |
MEF | ||
Consideration Transferred: | ||
Cash consideration | 35,232 | |
Total consideration | 38,392 | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | ||
Accounts receivable | 3,329 | |
Inventories | 3,550 | |
Intangible assets | 13,600 | |
Property, plant and equipment | 166 | |
Total identifiable assets | 20,645 | |
Accounts payable | -555 | |
Accrued liabilities | -92 | |
Deferred revenue | -4,808 | |
Net assets | 15,190 | |
Goodwill | 23,202 | |
Purchase price | 38,392 | |
Less: estimated excess working capital | 3,160 | |
Cash paid at closing | 35,232 | |
JRE | ||
Consideration Transferred: | ||
Cash consideration | 1,571 | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | ||
Cash and cash equivalents | 253 | |
Accounts receivable | 509 | |
Inventories | 2,793 | |
Prepaid expenses and other current assets | 40 | |
Property, plant and equipment | 250 | |
Total identifiable assets | 3,845 | |
Accounts payable | -514 | |
Accrued liabilities | -2,160 | |
Net assets | 1,171 | |
Goodwill | 400 | |
Net assets | 1,571 | |
Cash paid at closing | 1,571 | |
DHybrid Systems Llc | ||
Consideration Transferred: | ||
Cash consideration | 11,939 | |
Fair value of contingent consideration | 3,979 | |
Total consideration | 15,918 | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | ||
Cash and cash equivalents | 795 | |
Accounts receivable | 1,459 | |
Inventories | 3,300 | |
Prepaid expenses and other current assets | 38 | |
Intangible assets | 3,788 | |
Property, plant and equipment | 396 | |
Total identifiable assets | 9,776 | |
Accounts payable | -1,163 | |
Accrued liabilities | -160 | |
Long-term debt | -5,000 | |
Net assets | 3,453 | |
Goodwill | 16,547 | |
Net assets | 20,000 | |
Purchase price | 15,918 | |
Noncontrolling interest | -4,082 | |
Total consideration | 15,918 | |
Cash paid at closing | $11,939 |
Schedule_of_Fair_Value_of_Deri
Schedule of Fair Value of Derivative Instruments (Detail) (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | $337 | $1,284 |
Liability Derivatives at Fair Value | 6,324 | 4,475 |
Derivatives Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 106 | 456 |
Liability Derivatives at Fair Value | 5,729 | 4,180 |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 2,285 | |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 2,102 | 4,180 |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | Other Liabilities | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 183 | |
Derivatives Designated As Hedging Instruments | Foreign Exchange Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 106 | |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 3,444 | |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 456 | |
Derivatives Not Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 231 | 828 |
Liability Derivatives at Fair Value | 595 | 295 |
Derivatives Not Designated As Hedging Instruments | Foreign Exchange Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 32 | |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 595 | 295 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | $231 | $796 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2014 | 31-May-14 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Impact to fair value of derivative assets and liabilities as a result of recognition on a net basis | $324,000 | $730,000 |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings | -2,118,000 | |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings, tax | $1,251,000 |
Schedule_of_Summary_of_Derivat
Schedule of Summary of Derivative Hedges (Detail) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Nov. 30, 2014 |
Cash Flow Hedges | Commodity Contracts | |
Derivative [Line Items] | |
Notional Amount | 57,368 |
Cash Flow Hedges | Commodity Contracts | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2014-12 |
Cash Flow Hedges | Commodity Contracts | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2016-07 |
Cash Flow Hedges | Interest Rate Contracts | |
Derivative [Line Items] | |
Notional Amount | 120,000 |
Cash Flow Hedges | Interest Rate Contracts | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2014-12 |
Cash Flow Hedges | Interest Rate Contracts | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2019-09 |
Cash Flow Hedges | Foreign Currency Contracts | |
Derivative [Line Items] | |
Notional Amount | 11,168 |
Cash Flow Hedges | Foreign Currency Contracts | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2014-12 |
Cash Flow Hedges | Foreign Currency Contracts | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2015-06 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | |
Derivative [Line Items] | |
Notional Amount | 57,607 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2014-12 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2016-06 |
Schedule_of_Derivatives_Design
Schedule of Derivatives Designated as Cash Flow Hedging Instruments (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative [Line Items] | ||||
Income (Loss) Recognized in OCI (Effective Portion) | ($4,465) | ($1,228) | ($4,878) | $2,233 |
Income (Loss) Reclassified from Accumulated OCI (Effective Portion) | -1,493 | -1,869 | -3,437 | -3,248 |
Interest Rate Contracts | ||||
Derivative [Line Items] | ||||
Income (Loss) Recognized in OCI (Effective Portion) | -181 | -384 | ||
Interest Rate Contracts | Interest Expense | ||||
Derivative [Line Items] | ||||
Income (Loss) Reclassified from Accumulated OCI (Effective Portion) | -1,137 | -1,057 | -2,285 | -2,120 |
Commodity Contracts | ||||
Derivative [Line Items] | ||||
Income (Loss) Recognized in OCI (Effective Portion) | -4,362 | -1,047 | -4,775 | 2,617 |
Commodity Contracts | Cost Of Goods Sold | ||||
Derivative [Line Items] | ||||
Income (Loss) Reclassified from Accumulated OCI (Effective Portion) | -356 | -812 | -1,152 | -1,128 |
Foreign Currency Contracts | ||||
Derivative [Line Items] | ||||
Income (Loss) Recognized in OCI (Effective Portion) | ($103) | ($103) |
Schedule_of_Gain_Loss_Recogniz
Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | ($2,578) | ($394) | ($2,374) | $277 |
Commodity Contracts | Cost Of Goods Sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | -2,360 | -394 | -2,417 | 282 |
Foreign Currency Contracts | Miscellaneous Income (Expense) | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | ($218) | $43 | ($5) |
Schedule_of_Financial_Assets_A
Schedule of Financial Assets And Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Nov. 30, 2014 | 31-May-14 | ||
In Thousands, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | $337 | $1,284 | ||
Liabilities | 10,303 | 4,879 | ||
Derivative Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 337 | [1] | 1,284 | [1] |
Liabilities | 6,324 | [1] | 4,475 | [1] |
Contingent consideration obligation | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | 3,979 | [2] | 404 | [2] |
Significant Other Observable Inputs (Level 2) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 337 | 1,284 | ||
Liabilities | 6,324 | 4,475 | ||
Significant Other Observable Inputs (Level 2) | Derivative Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets | 337 | [1] | 1,284 | [1] |
Liabilities | 6,324 | [1] | 4,475 | [1] |
Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | 3,979 | 404 | ||
Significant Unobservable Inputs (Level 3) | Contingent consideration obligation | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Liabilities | $3,979 | [2] | $404 | [2] |
[1] | The fair value of our derivative contracts 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 O - Derivative Instruments and Hedging Activities" for additional information regarding our use of derivative instruments. | |||
[2] | The fair value of the Company's contingent consideration obligations is determined using a probability weighted cash flow approach based on management's projections of future cash flows of the acquired businesses. The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements. |
Assets_Measured_at_Fair_Value_
Assets Measured at Fair Value on Non-recurring Basis (Detail) (USD $) | Nov. 30, 2014 | 31-May-14 | ||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | $25,571,000 | $32,074,000 | ||
Long-lived assets held and used | ||||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | 3,750,000 | [1] | 7,034,000 | [2] |
Long Lived Assets Held For Sale | ||||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | 21,821,000 | [3] | 25,040,000 | [4] |
Significant Other Observable Inputs (Level 2) | ||||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | 25,571,000 | 32,074,000 | ||
Significant Other Observable Inputs (Level 2) | Long-lived assets held and used | ||||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | 3,750,000 | [1] | 7,034,000 | [2] |
Significant Other Observable Inputs (Level 2) | Long Lived Assets Held For Sale | ||||
Fair Value [Line Items] | ||||
Asset measured at fair value on nonrecurring basis | $21,821,000 | [3] | $25,040,000 | [4] |
[1] | During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company's aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $3,750,000, resulting in an impairment charge of $3,221,000 during the three months ended November 30, 2014. During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company's military construction business. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $1,179,000 during the three months ended November 30, 2014, which represents the remaining book value of the asset group. During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company's 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. As all of the criteria for classification as assets held for sale were met, the net assets of the business were presented separately as assets held for sale in our consolidated balance sheet as of May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale of Worthington Nitin Cylinders during the second quarter of fiscal 2015, the Company reassessed the fair value of the business and determined that the remaining book value should be written off resulting in an impairment charge of $6,346,000. | |||
[2] | During the fourth quarter of fiscal 2014, we determined that indicators of impairment were present at the Company's aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $7,034,000, resulting in an impairment charge of $1,412,000 within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. | |||
[3] | During the fourth quarter of fiscal 2014, management committed to a plan to sell certain non-core Steel Processing assets. As all of the criteria for classification as assets held for sale were met, the net assets of this business, which consist of net working capital and property, plant and equipment, have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014 and May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale during fiscal 2015, the Company reassessed the fair value of this business and determined that additional impairment charges of $3,050,000 were required for the six months ended November 30, 2014. Fair value of $19,402,000 was determined based on market prices for similar assets. During the second quarter of fiscal 2015, management committed to a plan to sell certain non-core Engineered Cabs assets. As all of the criteria for classification as assets held for sale were met, the net assets of the business have been presented separately as assets held for sale in our consolidated balance sheets as of November 30, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell, resulting in an impairment charge of $2,389,000 during the three months ended November 30, 2014. Fair value of $2,419,000 was determined based on market prices for similar assets. | |||
[4] | During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company's 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $5,925,000, was lower than its net book value, an impairment charge of $18,959,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. The portion of this impairment loss attributable to the noncontrolling interest, or $7,583,000, was recorded within net earnings attributable to noncontrolling interest in our fiscal 2014 consolidated statement of earnings. During the fourth quarter of fiscal 2014, management committed to plans to sell certain non-core Steel Processing assets. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. As the fair value of the asset group, or $19,115,000, was lower than its net book value, an impairment charge of $7,141,000 was recognized within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. |
Assets_Measured_at_Fair_Value_1
Assets Measured at Fair Value on Non-recurring Basis (Parenthetical) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | |||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | ||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | $14,235,000 | $30,734,000 | $16,185,000 | $35,375,000 | ||||
Asset measured at fair value on nonrecurring basis | 25,571,000 | 25,571,000 | 32,074,000 | |||||
Worthington Nitin Cylinders | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 18,959,000 | |||||||
Worthington Nitin Cylinders | Joint Venture Transactions | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 6,346,000 | |||||||
Ownership interest in joint venture | 60.00% | 60.00% | 60.00% | |||||
Military Construction Business | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 1,179,000 | |||||||
Noncontrolling Interest | Worthington Nitin Cylinders | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 7,583,000 | |||||||
Global Group | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 3,221,000 | 1,412,000 | ||||||
Zhejiang Nisshin Worthington Precision Specialty Steel Co | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 7,141,000 | |||||||
Non Core Steel Processing Assets | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 3,050,000 | |||||||
Custom Plastics And Interior Components Business | ||||||||
Fair Value [Line Items] | ||||||||
Impairment of long-lived assets | 2,389,000 | |||||||
Long-lived assets held and used | ||||||||
Fair Value [Line Items] | ||||||||
Asset measured at fair value on nonrecurring basis | 3,750,000 | [1] | 3,750,000 | [1] | 7,034,000 | [2] | ||
Long-lived assets held and used | Worthington Nitin Cylinders | ||||||||
Fair Value [Line Items] | ||||||||
Asset measured at fair value on nonrecurring basis | 5,925,000 | |||||||
Long-lived assets held and used | Global Group | ||||||||
Fair Value [Line Items] | ||||||||
Asset measured at fair value on nonrecurring basis | 3,221,000 | 3,221,000 | 7,034,000 | |||||
Long-lived assets held and used | Zhejiang Nisshin Worthington Precision Specialty Steel Co | ||||||||
Fair Value [Line Items] | ||||||||
Net asset | 19,115,000 | |||||||
Long-lived assets held and used | Non Core Steel Processing Assets | ||||||||
Fair Value [Line Items] | ||||||||
Asset measured at fair value on nonrecurring basis | 19,402,000 | 19,402,000 | ||||||
Long-lived assets held and used | Custom Plastics And Interior Components Business | ||||||||
Fair Value [Line Items] | ||||||||
Asset measured at fair value on nonrecurring basis | $2,419,000 | $2,419,000 | ||||||
[1] | During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company's aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $3,750,000, resulting in an impairment charge of $3,221,000 during the three months ended November 30, 2014. During the second quarter of fiscal 2015, we determined that indicators of impairment were present at the Company's military construction business. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value, resulting in an impairment charge of $1,179,000 during the three months ended November 30, 2014, which represents the remaining book value of the asset group. During the fourth quarter of fiscal 2014, management committed to a plan to sell the Company's 60%-owned consolidated joint venture in India, Worthington Nitin Cylinders. As all of the criteria for classification as assets held for sale were met, the net assets of the business were presented separately as assets held for sale in our consolidated balance sheet as of May 31, 2014. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell as of May 31, 2014. As a result of changes in facts and circumstances related to the planned sale of Worthington Nitin Cylinders during the second quarter of fiscal 2015, the Company reassessed the fair value of the business and determined that the remaining book value should be written off resulting in an impairment charge of $6,346,000. | |||||||
[2] | During the fourth quarter of fiscal 2014, we determined that indicators of impairment were present at the Company's aluminum high-pressure cylinder business in New Albany, Mississippi, due to current and projected operating losses. Recoverability of the identified asset group was tested using future cash flow projections based on management's long-range estimates of market conditions. The sum of these undiscounted future cash flows was less than the net book value of the asset group. In accordance with the applicable accounting guidance, the net assets were written down to their fair value of $7,034,000, resulting in an impairment charge of $1,412,000 within impairment of long-lived assets in our fiscal 2014 consolidated statement of earnings. |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Nov. 30, 2014 | 31-May-14 |
Fair Value Measurement [Line Items] | ||
Long-term debt at fair value including current maturities | $711,589,000 | $674,488,000 |
Long-term debt at carrying amount including current maturities | $674,874,000 | $655,963,000 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 6 Months Ended |
Nov. 30, 2014 | |
Subsequent Event [Line Items] | |
Senior notes outstanding | $100,000,000 |
Senior notes outstanding due date | 17-Dec-14 |