Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Feb. 28, 2018 | Apr. 02, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Feb. 28, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | WOR | |
Entity Registrant Name | WORTHINGTON INDUSTRIES INC | |
Entity Central Index Key | 108,516 | |
Current Fiscal Year End Date | --05-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 60,640,449 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Feb. 28, 2018 | May 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 147,424 | $ 278,081 |
Receivables, less allowances of $3,262 and $3,444 at February 28, 2018 and May 31, 2017, respectively | 507,968 | 486,730 |
Inventories: | ||
Raw materials | 217,016 | 185,001 |
Work in process | 123,693 | 95,630 |
Finished products | 90,697 | 73,303 |
Total inventories | 431,406 | 353,934 |
Income taxes receivable | 9,711 | 7,164 |
Assets held for sale | 3,740 | 9,654 |
Prepaid expenses and other current assets | 58,393 | 55,406 |
Total current assets | 1,158,642 | 1,190,969 |
Investments in unconsolidated affiliates | 212,131 | 208,591 |
Goodwill | 352,596 | 247,673 |
Other intangible assets, net of accumulated amortization of $76,602 and $63,134 at February 28, 2018 and May 31, 2017, respectively | 236,197 | 82,781 |
Other assets | 29,971 | 24,841 |
Property, plant and equipment: | ||
Land | 27,551 | 22,077 |
Buildings and improvements | 312,267 | 297,951 |
Machinery and equipment | 1,056,111 | 961,542 |
Construction in progress | 32,731 | 27,616 |
Total property, plant and equipment | 1,428,660 | 1,309,186 |
Less: accumulated depreciation | 803,461 | 738,697 |
Total property, plant and equipment, net | 625,199 | 570,489 |
Total assets | 2,614,736 | 2,325,344 |
Current liabilities: | ||
Accounts payable | 403,990 | 368,071 |
Short-term borrowings | 403 | 123 |
Accrued compensation, contributions to employee benefit plans and related taxes | 70,669 | 86,201 |
Dividends payable | 13,777 | 13,698 |
Other accrued items | 60,864 | 41,551 |
Income taxes payable | 801 | 4,448 |
Current maturities of long-term debt | 13,735 | 6,691 |
Total current liabilities | 564,239 | 520,783 |
Other liabilities | 70,807 | 61,498 |
Distributions in excess of investment in unconsolidated affiliate | 59,563 | 63,038 |
Long-term debt | 768,128 | 571,796 |
Deferred income taxes, net | 78,012 | 34,300 |
Total liabilities | 1,540,749 | 1,251,415 |
Shareholders' equity-controlling interest | 951,171 | 951,635 |
Noncontrolling interests | 122,816 | 122,294 |
Total equity | 1,073,987 | 1,073,929 |
Total liabilities and equity | $ 2,614,736 | $ 2,325,344 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2018 | May 31, 2017 |
Receivables, allowances | $ 3,262 | $ 3,444 |
Other intangible assets, accumulated amortization | $ 76,602 | $ 63,134 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net sales | $ 841,657 | $ 703,436 | $ 2,561,160 | $ 2,168,765 |
Cost of goods sold | 714,603 | 592,446 | 2,161,249 | 1,787,690 |
Gross margin | 127,054 | 110,990 | 399,911 | 381,075 |
Selling, general and administrative expense | 84,294 | 75,276 | 261,968 | 232,819 |
Impairment of goodwill and long-lived assets | 8,289 | |||
Restructuring and other expense (income), net | (3) | 1,394 | (7,393) | 5,994 |
Operating income | 42,763 | 34,320 | 137,047 | 142,262 |
Other income (expense): | ||||
Miscellaneous income, net | 1,500 | 749 | 3,169 | 2,484 |
Interest expense | (9,775) | (7,674) | (28,620) | (23,202) |
Equity in net income of unconsolidated affiliates | 19,770 | 22,697 | 63,521 | 84,365 |
Earnings before income taxes | 54,258 | 50,092 | 175,117 | 205,909 |
Income tax expense (benefit) | (24,039) | 11,141 | 7,124 | 48,555 |
Net earnings | 78,297 | 38,951 | 167,993 | 157,354 |
Net earnings (loss) attributable to noncontrolling interests | (791) | 3,062 | 3,968 | 9,333 |
Net earnings attributable to controlling interest | $ 79,088 | $ 35,889 | $ 164,025 | $ 148,021 |
Basic | ||||
Average common shares outstanding | 60,383 | 62,750 | 61,451 | 62,325 |
Earnings per share attributable to controlling interest | $ 1.31 | $ 0.57 | $ 2.67 | $ 2.37 |
Diluted | ||||
Average common shares outstanding | 62,345 | 64,977 | 63,507 | 64,758 |
Earnings per share attributable to controlling interest | $ 1.27 | $ 0.55 | $ 2.58 | $ 2.29 |
Common shares outstanding at end of period | 59,802 | 62,776 | 59,802 | 62,776 |
Cash dividends declared per share | $ 0.21 | $ 0.20 | $ 0.63 | $ 0.60 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Net earnings | $ 78,297 | $ 38,951 | $ 167,993 | $ 157,354 |
Other comprehensive income (loss): | ||||
Foreign currency translation | 9,542 | 905 | 26,925 | (7,277) |
Pension liability adjustment, net of tax | 251 | (35) | 245 | (35) |
Cash flow hedges, net of tax | (556) | (921) | (879) | 1,356 |
Other comprehensive income (loss) | 9,237 | (51) | 26,291 | (5,956) |
Comprehensive income | 87,534 | 38,900 | 194,284 | 151,398 |
Comprehensive income (loss) attributable to noncontrolling interests | (680) | 3,071 | 4,438 | 9,198 |
Comprehensive income attributable to controlling interest | $ 88,214 | $ 35,829 | $ 189,846 | $ 142,200 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Operating activities: | ||||
Net earnings | $ 78,297 | $ 38,951 | $ 167,993 | $ 157,354 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||
Depreciation and amortization | 25,338 | 21,677 | 76,986 | 65,154 |
Impairment of goodwill and long-lived assets | 8,289 | |||
Provision for (benefit from) deferred income taxes | (27,373) | 7,609 | (20,022) | 9,946 |
Bad debt (income) expense | 17 | (41) | (4) | 110 |
Equity in net income of unconsolidated affiliates, net of distributions | 2,835 | (1,256) | (1,968) | (182) |
Net (gain) loss on assets | (1,437) | 1,875 | (10,692) | 3,358 |
Stock-based compensation | 2,882 | 4,304 | 10,076 | 11,264 |
Changes in assets and liabilities, net of impact of acquisitions : | ||||
Receivables | 4,071 | (44,719) | 20,652 | (34,920) |
Inventories | (15,398) | (2,346) | (40,223) | (20,869) |
Prepaid expenses and other current assets | (4,914) | (13,379) | (149) | (7,954) |
Other assets | (2,069) | (423) | (3,045) | 1,987 |
Accounts payable and accrued expenses | 35,564 | 89,736 | (12,804) | 66,849 |
Other liabilities | 2,107 | 718 | 7,568 | 2,813 |
Net cash provided by operating activities | 99,920 | 102,706 | 202,657 | 254,910 |
Investing activities: | ||||
Investment in property, plant and equipment | (13,628) | (21,128) | (55,319) | (52,174) |
Acquisitions, net of cash acquired | (285,028) | |||
Proceeds from sale of assets | 3 | 2 | 16,742 | 958 |
Net cash used by investing activities | (13,625) | (21,126) | (323,605) | (51,216) |
Financing activities: | ||||
Net repayments of short-term borrowings, net of issuance costs | (1,108) | (330) | (508) | (2,484) |
Proceeds from long-term debt, net of issuance costs | 197,685 | |||
Principal payments on long-term debt | (374) | (218) | (813) | (655) |
Proceeds from issuance of common shares, net of tax withholdings | 581 | (12,197) | (3,415) | (9,225) |
Payments to noncontrolling interests | (3,360) | (3,916) | (10,141) | |
Repurchase of common shares | (47,418) | (159,942) | ||
Dividends paid | (12,766) | (13,374) | (38,800) | (38,096) |
Net cash used by financing activities | (61,085) | (29,479) | (9,709) | (60,601) |
Increase (decrease) in cash and cash equivalents | 25,210 | 52,101 | (130,657) | 143,093 |
Cash and cash equivalents at beginning of period | 122,214 | 175,180 | 278,081 | 84,188 |
Cash and cash equivalents at end of period | $ 147,424 | $ 227,281 | $ 147,424 | $ 227,281 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 28, 2018 | |
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. The Company owns controlling interests in the following five joint ventures: Spartan Steel Coating, LLC (“Spartan”) (52%), TWB Company, L.L.C. (“TWB”) (55%), Worthington Aritaş Basinçli Kaplar Sanayi (“Worthington Aritas”) (75%), Worthington Energy Innovations, LLC (“WEI”) (75%), and Worthington Specialty Processing (“WSP”) (51%). These joint ventures are consolidated with the equity owned by the other joint venture members shown as noncontrolling interests in our consolidated balance sheets, and their portions of net earnings and other comprehensive income (loss) (“OCI”) shown as net earnings (loss) or comprehensive income (loss) attributable to noncontrolling interests 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 S-X 10-Q, 10-K 10-K”). The preparation of consolidated 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 Adopted Accounting Standards In July 2015, amended accounting guidance was issued regarding the measurement of inventory. The amended guidance requires that inventory accounted for under the first-in, first-out last-in, first-out In August 2016, amended accounting guidance was issued to clarify the proper cash flow presentation of certain specific types of cash payments and cash receipts. The Company early adopted this amended guidance on a prospective basis effective June 1, 2017. The adoption of this guidance did not impact our consolidated statements of cash flows or ongoing financial reporting. In January 2017, amended accounting guidance was issued to clarify the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or a business. The Company early adopted this amended guidance on a prospective basis effective September 1, 2017. The adoption of this guidance did not impact our consolidated financial position or results of operations. In January 2017, amended accounting guidance was issued to simplify the goodwill impairment calculation, by removing Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. The Company early adopted this amended guidance on a prospective basis effective September 1, 2017. The adoption of this guidance did not impact our consolidated financial position or results of operations. Recently Issued Accounting Standards In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP. The new 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. Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The guidance permits the use of either the retrospective or cumulative effect transition method. We are in the process of evaluating the effect this guidance will have on the presentation of our consolidated financial statements and related disclosures. The scoping and diagnostic phases of the implementation have been completed and reviews of the Company’s contracts are largely complete. We anticipate the timing or pattern of revenue recognition to change for certain revenue streams; however, we do not expect the impact of these changes to be material due to the short-term nature of the manufacturing cycle for these revenue streams. The Company will adopt this guidance on June 1, 2018 using the cumulative effect transition method. The Company will continue to monitor any modifications, clarifications, and interpretations by the FASB that may impact the Company’s conclusions. In February 2016, new accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP. Among other changes, the new guidance requires that leased assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented. We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the new guidance on our ongoing financial reporting. In June 2016, new accounting guidance was issued related to the measurement of credit losses on financial instruments. The new guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the new guidance to have a material impact on our ongoing financial reporting. In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows. In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period end-of-period In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line as other current employee compensation costs. Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows. In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the effective date for the capitalization of service cost. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations. In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness. The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption. The presentation and disclosure guidance is only required prospectively. Early adoption is permitted. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting. In February 2018, amended guidance was issued that would allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA enacted by the U.S. government in December 2017. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. It is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 9 Months Ended |
Feb. 28, 2018 | |
Unconsolidated Affiliates | |
Investments in Unconsolidated Affiliates | NOTE B – Investments in Unconsolidated Affiliates Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. 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%), and Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd. (10%). We received distributions from unconsolidated affiliates totaling $61,553,000 during the nine months ended February 28, 2018. We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in an amount recorded within other liabilities on our consolidated balance sheets of $59,563,000 at February 28, 2018. In accordance with the applicable accounting guidance, we reclassified the negative investment balance 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 probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any negative investment balance classified as a liability as income immediately. We use the “cumulative earnings” approach for determining cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities, unless the cumulative distributions received, less distributions received in prior periods that were determined to be returns of investment, 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. The following tables summarize combined financial information for our unconsolidated affiliates as of, and for the periods presented: (in thousands) February 28, May 31, Cash $ 17,828 $ 24,470 Other current assets 528,520 541,746 Current assets for discontinued operations 72,236 48,346 Noncurrent assets 360,495 342,938 Noncurrent assets for discontinued operations — 18,168 Total assets $ 979,079 $ 975,668 Current liabilities 131,906 148,056 Current liabilities for discontinued operations 9,454 8,891 Short-term borrowings 12,596 8,172 Current maturities of long-term debt 19,676 5,827 Long-term debt 264,317 268,711 Other noncurrent liabilities 19,554 20,890 Noncurrent liabilities for discontinued operations — 490 Equity 521,576 514,631 Total liabilities and equity $ 979,079 $ 975,668 Three Months Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Net sales $ 403,426 $ 384,261 $ 1,258,667 $ 1,188,568 Gross margin 72,828 84,645 230,185 305,383 Operating income 41,546 55,140 133,313 216,902 Depreciation and amortization 5,406 6,983 18,534 20,776 Interest expense 2,564 2,089 7,517 6,388 Income tax expense (benefit) (1,095 ) 5,065 2,069 16,128 Net earnings from continuing operations 36,058 47,309 118,995 193,228 Net earnings from discontinued operations 1,805 1,789 1,532 5,381 Net earnings 37,863 49,098 120,527 198,609 The amounts presented within the discontinued operations captions in the tables above reflect the international operations of our WAVE joint venture. On November 20, 2017, the Company announced that WAVE had agreed to sell its business and operations in Europe, the Middle East, Africa and Asia, to Knauf Group, a family-owned manufacturer of building materials headquartered in Germany. The Company expects to receive proceeds of approximately $45,000,000 for its 50% share of the WAVE operations being sold. The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close in the second half of calendar 2018. |
Impairment of Goodwill and Long
Impairment of Goodwill and Long-Lived Assets | 9 Months Ended |
Feb. 28, 2018 | |
Impairment of Goodwill and Long-Lived Assets | NOTE C – Impairment of Goodwill and Long-Lived Assets During the second quarter of fiscal 2018, the Company determined that indicators of impairment were present with regard to the goodwill and intangible assets of the WEI reporting unit. As a result, these assets were written down to their estimated fair value resulting in an impairment charge of $7,325,000. During the second quarter of fiscal 2018, the Company also identified the presence of impairment indicators with regard to vacant land at the oil & gas equipment facility in Bremen, Ohio, resulting in an impairment charge of $964,000 to write the vacant land down to its estimated fair market value. |
Restructuring and Other Expense
Restructuring and Other Expense | 9 Months Ended |
Feb. 28, 2018 | |
Restructuring and Other Expense | NOTE D – Restructuring and Other Expense We consider restructuring activities to be programs whereby we fundamentally change our operations such as closing and consolidating manufacturing facilities or moving manufacturing of a product to another location. Restructuring activities may also involve substantial realignment of the management structure of a business unit in response to changing market conditions. A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other expense (income) financial statement caption, in our consolidated statement of earnings is summarized below for the period presented: (in thousands) Balance, as of Expense (income) Payments Adjustments Balance, as of Early retirement and severance $ 253 $ 2,560 $ (1,188 ) $ (16 ) $ 1,609 Facility exit and other costs 536 499 (1,035 ) - - $ 789 3,059 $ (2,223 ) $ (16 ) $ 1,609 Net gain on sale of assets (10,452 ) Restructuring and other income, net $ (7,393 ) During the nine months ended February 28, 2018, the following actions were taken related to the Company’s restructuring activities: • In connection with the acquisition of Amtrol on June 2, 2017, the Company recognized severance expense of $2,365,000 related to corporate management positions at Amtrol that were eliminated. • In connection with the closure of the Company’s stainless steel business, Precision Specialty Metals, Inc. (“PSM”), the Company recognized facility exit costs of $577,000 and a net gain on disposal of assets of $10,595,000 for the sale of the real estate of this business. Net proceeds were $15,874,000. • In connection with other non-significant The total liability associated with our restructuring activities as of February 28, 2018 is expected to be paid in the next twelve months. |
Contingent Liabilities and Comm
Contingent Liabilities and Commitments | 9 Months Ended |
Feb. 28, 2018 | |
Contingent Liabilities and Commitments | NOTE E – Contingent Liabilities and Commitments We are defendants in certain legal actions. In the opinion of management, the outcome of these actions is not clearly determinable at the present time. None of the pending litigation, individually or collectively, is expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Guarantees
Guarantees | 9 Months Ended |
Feb. 28, 2018 | |
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 February 28, 2018, 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 $8,587,000 at February 28, 2018. Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to this guarantee is not probable and, therefore, no amount has been recognized in our consolidated financial statements. We also had in place $14,606,000 of outstanding stand-by |
Debt and Receivables Securitiza
Debt and Receivables Securitization | 9 Months Ended |
Feb. 28, 2018 | |
Debt and Receivables Securitization | NOTE G – Debt and Receivables Securitization On July 28, 2017, we issued $200,000,000 aggregate principal amount of senior unsecured notes due August 1, 2032 (the “2032 Notes”). The 2032 Notes bear interest at a rate of 4.300%. The 2032 Notes were sold to the public at 99.901% of the principal amount thereof, to yield 4.309% to maturity. We used a portion of the net proceeds from the offering to repay amounts then outstanding under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility, both of which are described in more detail below. We entered into an interest rate swap in June 2017, in anticipation of the issuance of the 2032 Notes. The interest rate swap had a notional amount of $150,000,000 to hedge the risk of changes in the semi-annual interest rate payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 2032 Notes. Upon pricing of the 2032 Notes, the derivative instrument was settled resulting in a gain of approximately $3,098,000, which was reflected in accumulated other comprehensive income (“AOCI”). Approximately $2,116,000 and $198,000 were allocated to debt issuance costs and the debt discount. The debt issuance costs and the debt discount were each recorded on the consolidated balance sheet within long-term debt as a contra-liability. The unamortized portion of the debt issuance costs and debt discount was $2,034,000 and $190,000, respectively, at February 28, 2018. We maintain a $500,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders. On February 16, 2018, the Company amended the terms of the Credit Facility, extending the maturity by three years to February 2023. Debt issuance costs of $805,000 were incurred as a result of the renewal. These costs have been deferred and will be amortized over the life of the Credit Facility to interest expense. Borrowings under the Credit Facility typically 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 rate or Overnight Bank Funding Rate. The applicable margin is determined by our credit rating. There were no borrowings outstanding under the Credit Facility at February 28, 2018. As discussed in “NOTE F – Guarantees,” we provided $14,606,000 in stand-by stand-by We also maintain a $50,000,000 revolving trade accounts receivable securitization facility (the “AR Facility”) which matures in January 2019. On January 16, 2018, the Company amended the terms of the AR Facility, extending the maturity by one year to January 2019 and reducing the borrowing capacity from $100,000,000 to $50,000,000. 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 $50,000,000 of undivided ownership interests in this pool of accounts receivable to a third-party bank. 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. As of February 28, 2018, no undivided ownership interests in this pool of accounts receivable had been sold. |
Other Comprehensive Income
Other Comprehensive Income | 9 Months Ended |
Feb. 28, 2018 | |
Other Comprehensive Income | NOTE H – Other Comprehensive Income The following table summarizes the tax effects on each component of OCI for the three months ended February 28: 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax (in thousands) Foreign currency translation $ 9,542 $ - $ 9,542 $ 905 $ - $ 905 Pension liability adjustment 230 21 251 (117 ) 82 (35 ) Cash flow hedges (711 ) 155 (556 ) (1,299 ) 378 (921 ) Other comprehensive income (loss) $ 9,061 $ 176 $ 9,237 $ (511 ) $ 460 $ (51 ) The following table summarizes the tax effects on each component of OCI for the nine months ended February 28: 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax (in thousands) Foreign currency translation $ 26,925 $ - $ 26,925 $ (7,277 ) $ - $ (7,277 ) Pension liability adjustment 230 15 245 (117 ) 82 (35 ) Cash flow hedges (1,213 ) 334 (879 ) 1,836 (480 ) 1,356 Other comprehensive income (loss) $ 25,942 $ 349 $ 26,291 $ (5,558 ) $ (398 ) $ (5,956 ) |
Changes in Equity
Changes in Equity | 9 Months Ended |
Feb. 28, 2018 | |
Changes in Equity | NOTE I – Changes in Equity The following table summarizes the changes in equity by component and in total for the period presented: Controlling Interest (in thousands) Additional Paid-in Accumulated Retained Total Non- Total Balance at May 31, 2017 $ 303,391 $ (27,775 ) $ 676,019 $ 951,635 $ 122,294 $ 1,073,929 Net earnings - - 164,025 164,025 3,968 167,993 Other comprehensive income - 25,821 - 25,821 470 26,291 Common shares issued, net of withholding tax (3,415 ) - - (3,415 ) - (3,415 ) Common shares in NQ plans 1,003 - - 1,003 - 1,003 Stock-based compensation 11,203 - - 11,203 - 11,203 Purchases and retirement of common shares (16,311 ) - (143,631 ) (159,942 ) - (159,942 ) Cash dividends declared - - (39,159 ) (39,159 ) - (39,159 ) Dividends to noncontrolling interest - - - - (3,916 ) (3,916 ) Balance at February 28, 2018 $ 295,871 $ (1,954 ) $ 657,254 $ 951,171 $ 122,816 $ 1,073,987 The following table summarizes the changes in accumulated other comprehensive loss for the period presented: (in thousands) Foreign Pension Cash Accumulated Balance as of May 31, 2017 $ (17,358 ) $ (14,819 ) $ 4,402 $ (27,775 ) Other comprehensive income before reclassifications 26,455 230 11,362 38,047 Reclassification adjustments to income (a) - - (12,575 ) (12,575 ) Income taxes - 15 334 349 Balance as of February 28, 2018 $ 9,097 $ (14,574 ) $ 3,523 $ (1,954 ) (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.” |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Feb. 28, 2018 | |
Stock-Based Compensation | NOTE J – Stock-Based Compensation Non-Qualified During the nine months ended February 28, 2018, we granted non-qualified pre-tax Dividend yield 1.81 % Expected volatility 36.65 % Risk-free interest rate 1.98 % Expected term (years) 6.0 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 nine months ended February 28, 2018, we granted an aggregate of 170,750 service-based restricted common shares under our stock-based compensation plans. The fair value of these restricted common shares was equal to the weighted average closing market price of the underlying common shares on the respective dates of grant, or $47.89 per share. The calculated pre-tax Performance Share Awards We have awarded performance shares to certain key employees under our stock-based compensation plans. These performance shares are earned based on the level of achievement with respect to corporate targets for cumulative corporate economic value added, 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, 2018, 2019 and 2020. 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 values of our performance shares are determined by the closing market prices of the underlying common shares at the respective grant dates of the performance shares and the pre-tax pre-tax |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 28, 2018 | |
Income Taxes | NOTE K – Income Taxes Income tax expense for the nine months ended February 28, 2018 and 2017 reflected estimated annual effective income tax rates of 10.3% and 27.2%, 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 interests are primarily a result of our WSP, Spartan, Worthington Aritas, and TWB consolidated joint ventures. The earnings attributable to the noncontrolling interests in WSP, Spartan and TWB’s U.S. operations do not generate tax expense to Worthington since the investors in WSP, Spartan and TWB’s U.S. operations are taxed directly based on the earnings attributable to them. The tax expense of Worthington Aritas (a foreign corporation) and TWB’s wholly-owned foreign corporations is 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 On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted into federal law. The TCJA significantly revised the U.S. corporate income tax system by lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. In addition, the TCJA adds several new provisions including changes to bonus depreciation, the deduction for executive compensation, a tax on global intangible low-taxed one-time U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. For the three and nine months ended February 28, 2018, the Company has not finalized the accounting for the tax effects of the enactment of the TCJA. However, consistent with applicable Securities and Exchange Commission guidance in Staff Accounting Bulletin 118 (“SAB118”), the Company has made a reasonable estimate of the effects on the Company’s existing deferred tax balances and the one-time re-measurement year-end |
Earnings per Share
Earnings per Share | 9 Months Ended |
Feb. 28, 2018 | |
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 periods presented: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2018 2017 2018 2017 Numerator (basic & diluted): Net earnings attributable to controlling interest -income available to common shareholders $ 79,088 $ 35,889 $ 164,025 $ 148,021 Denominator: Denominator for basic earnings per share attributable to controlling interest—weighted average common shares 60,383 62,750 61,451 62,325 Effect of dilutive securities 1,962 2,227 2,056 2,433 Denominator for diluted earnings per share attributable to controlling interest—adjusted weighted average common shares 62,345 64,977 63,507 64,758 Basic earnings per share attributable to controlling interest $ 1.31 $ 0.57 $ 2.67 $ 2.37 Diluted earnings per share attributable to controlling interest $ 1.27 $ 0.55 $ 2.58 $ 2.29 Stock options covering 91,933 and 107,224 common shares for the three months ended February 28, 2018 and 2017, respectively, and 81,087 and 97,638 common shares for the nine months ended February 28, 2018 and 2017, respectively, have been excluded from the computation of diluted earnings per share because the effect of their inclusion would have been “anti-dilutive” for those periods. |
Segment Operations
Segment Operations | 9 Months Ended |
Feb. 28, 2018 | |
Segment Operations | NOTE M – Segment Operations The following table presents summarized financial information for our reportable segments as of, and for the periods presented: Three Months Nine Months Ended (in thousands) 2018 2017 2018 2017 Net sales Steel Processing $ 518,113 $ 478,174 $ 1,599,994 $ 1,492,654 Pressure Cylinders 295,506 198,433 866,179 598,303 Engineered Cabs 27,055 23,547 89,405 71,591 Other 983 3,282 5,582 6,217 Total net sales $ 841,657 $ 703,436 $ 2,561,160 $ 2,168,765 Operating income (loss) Steel Processing $ 31,125 $ 26,026 $ 105,127 $ 116,256 Pressure Cylinders 17,530 10,071 52,663 35,480 Engineered Cabs (4,083 ) (2,001 ) (6,031 ) (7,225 ) Other (1,809 ) 224 (14,712 ) (2,249 ) Total operating income $ 42,763 $ 34,320 $ 137,047 $ 142,262 Impairment of goodwill and long-lived assets Steel Processing $ - $ - $ - $ - Pressure Cylinders - - 964 - Engineered Cabs - - - - Other - - 7,325 - Total impairment of goodwill and long-lived assets $ - $ - $ 8,289 $ - Restructuring and other expense (income), net Steel Processing $ (3 ) $ 212 $ (10,059 ) $ 1,496 Pressure Cylinders - 1,056 2,365 3,165 Engineered Cabs - 169 (78 ) 1,379 Other - (43 ) 379 (46 ) Total restructuring and other expense (income), net $ (3 ) $ 1,394 $ (7,393 ) $ 5,994 (in thousands) February 28, May 31, Total assets Steel Processing $ 907,578 $ 882,863 Pressure Cylinders 1,191,736 766,611 Engineered Cabs 65,101 62,141 Other 450,321 613,729 Total assets $ 2,614,736 $ 2,325,344 Effective June 1, 2017, we made certain organizational changes impacting the internal reporting and management structure of Packaging Solutions. As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing operating segment to the Engineered Cabs operating segment. Previously reported results have not been restated and are immaterial for all periods presented. |
Acquisitions
Acquisitions | 9 Months Ended |
Feb. 28, 2018 | |
Acquisitions | NOTE N – Acquisitions On June 2, 2017, the Company acquired Amtrol, a leading manufacturer of pressure cylinders and water system tanks with operations in the U.S. and Europe. The total purchase price was $291,921,000 after adjusting for excess working capital and was funded primarily with cash on hand.The net assets became part of the Pressure Cylinders operating segment at closing, with the well water and expansion tank operations aligning under the consumer products business and the refrigerant, liquid propane and industrial and specialty gas operations aligning under the industrial products business. Total acquisition-related expenses were $3,568,000, of which $1,568,000 were incurred during fiscal 2018. The information included herein has been prepared based on the preliminary allocation of the purchase price using estimates of the fair value and useful lives of the assets acquired and liabilities assumed. The purchase price allocation is subject to further adjustment until all pertinent information regarding the assets acquired and liabilities assumed are fully evaluated by the Company, including but not limited to, the fair value accounting, legal and tax matters, obligations, and deferred taxes. The assets acquired and liabilities assumed were recognized at their preliminary 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, we identified and valued the following identifiable intangible assets: (in thousands) Amount Useful Life (Years) Category Customer relationships $ 90,800 14-17 Trade names 62,200 Indefinite Technology 13,000 15-16 Total acquired identifiable intangible assets $ 166,000 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 not expected to be deductible for income tax purposes. The following table summarizes the consideration transferred for the assets of Amtrol and the preliminary fair value assigned to the assets acquired and liabilities assumed at the acquisition date: (in thousands) Preliminary Measurement Revised Cash $ 6,893 $ - $ 6,893 Accounts receivable 40,212 - 40,212 Inventories 37,249 - 37,249 Prepaid expenses 981 - 981 Other assets 2,550 - 2,550 Intangible assets 166,000 - 166,000 Property, plant and equipment 52,870 - 52,870 Total assets 306,755 - 306,755 Accounts payable 25,945 - 25,945 Accrued liabilities 21,016 - 21,016 Long-term debt including current maturities 2,287 - 2,287 Other accrued items 3,993 - 3,993 Deferred income taxes, net 64,495 (413 ) 64,082 Net identifiable assets 189,019 413 189,432 Goodwill 102,902 (413 ) 102,489 Purchase price $ 291,921 $ - $ 291,921 Operating results of Amtrol have been included in the Company’s consolidated statements of earnings since the date of the acquisition. During the three and nine months ended February 28, 2018, Amtrol contributed net sales of $65,766,000 and $191,047,000, and operating income of $7,323,000 and $11,151,000, respectively. The following unaudited pro forma information presents consolidated financial information as if Amtrol had been acquired at the beginning of fiscal 2017. Depreciation and amortization expense included in the pro forma results reflect the preliminary acquisition-date fair values assigned to the definite-lived intangible assets and fixed assets of Amtrol assuming a June 1, 2016 acquisition date. Adjustment has also been made for acquisition-related costs incurred in each period presented. Pro forma results for the three and nine months ended February 28, 2018 have also been adjusted to remove the impact of the acquisition-date fair value adjustments to inventories and accrued severance costs related to headcount reductions at Amtrol initiated during fiscal 2018, as discussed in “NOTE D – Restructuring and Other Expense.” The pro forma adjustments noted above have been adjusted for the applicable income tax impact. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of June 1, 2016. Three months ended Nine months ended (in thousands, except per share amounts) 2018 2017 2018 2017 Net sales $ 841,657 $ 762,956 $ 2,561,160 $ 2,350,152 Net earnings attributable to controlling interest $ 79,087 $ 39,090 $ 168,269 $ 156,916 Diluted earnings per share attributable to controlling interest $ 1.27 $ 0.60 $ 2.65 $ 2.42 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Feb. 28, 2018 | |
Cash Flow Hedges | |
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, foreign currency exchange rate 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 Foreign Currency Exchange Risk Management Commodity Price Risk Management We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure. These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold. Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold. We do not have significant exposure to any one counterparty, and management believes the 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 line in which they were recorded in the consolidated balance sheet at February 28, 2018: Asset Derivatives Liability Derivatives (in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Commodity contracts Receivables $ 4,880 Accounts payable $ - Other assets 28 Other liabilities - 4,908 - Interest rate contracts Receivables - Accounts payable 240 Other assets - Other liabilities 4 - 244 Totals $ 4,908 $ 244 Derivatives not designated as hedging instruments: Commodity contracts Receivables $ 3,410 Accounts payable $ 837 Other assets 173 Other liabilities 103 3,583 940 Foreign exchange contracts Receivables - Accounts payable 31 Totals $ 3,583 $ 971 Total derivative instruments $ 8,491 $ 1,215 The amounts in the table above reflect the fair value of the Company’s derivative instruments on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $858,000 decrease 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, 2017: Asset Derivatives Liability Derivatives (in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Derivatives designated as hedging instruments: Commodity contracts Receivables $ 7,148 Accounts payable $ 111 Other assets 6 Other liabilities 159 7,154 270 Interest rate contracts Receivables - Accounts payable 141 Other assets - Other liabilities 160 - 301 Totals $ 7,154 $ 571 Derivatives not designated as hedging instruments: Commodity contracts Receivables $ 1,110 Accounts payable $ 570 Other assets - Other liabilities 1 1,110 571 Foreign exchange contracts Receivables 62 Accounts payable - Totals $ 1,172 $ 571 Total derivative instruments $ 8,326 $ 1,142 The amounts in the table above reflect the fair value of the Company’s derivative instruments on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $100,000 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 accumulated OCI and reclassified into earnings in the same line 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 February 28, 2018: (in thousands) Notional Maturity Date Commodity contracts $ 22,473 March 2018 - June 2019 Interest rate contracts 18,656 September 2019 The following table summarizes the gain recognized in OCI and the gain (loss) reclassified from AOCI into earnings for derivative instruments designated as cash flow hedges for the periods presented: Location of Location of Gain (Loss) Gain (Loss) Gain Gain Reclassified Reclassified (Ineffective (Ineffective Gain from from Portion) Portion) Recognized Accumulated Accumulated and Excluded and Excluded in OCI OCI OCI from from (Effective (Effective (Effective Effectiveness Effectiveness (in thousands) Portion) Portion) Portion) Testing Testing For the three months ended February 28, 2018: Commodity contracts $ 2,429 Cost of goods sold $ 3,195 Cost of goods sold $ - Interest rate contracts 21 Interest expense (34 ) Interest expense - Totals $ 2,450 $ 3,161 $ - For the three months ended February 28, 2017: Commodity contracts $ 2,037 Cost of goods sold $ 3,397 Cost of goods sold $ - Interest rate contracts 25 Interest expense (36 ) Interest expense - Totals $ 2,062 $ 3,361 $ - For the nine months ended February 28, 2018: Commodity contracts $ 8,243 Cost of goods sold $ 13,000 Cost of goods sold $ - Interest rate contracts 3,119 Interest expense (425 ) Interest expense - Totals $ 11,362 $ 12,575 $ - For the nine months ended February 28, 2017: Commodity contracts $ 9,963 Cost of goods sold $ 8,882 Cost of goods sold $ - Interest rate contracts 149 Interest expense (606 ) Interest expense - Totals $ 10,112 $ 8,276 $ - The estimated net amount of the losses recognized in AOCI at February 28, 2018 expected to be reclassified into net earnings within the succeeding twelve months is $3,530,000 (net of tax of $1,513,000). This amount was computed using the fair value of the cash flow hedges at February 28, 2018, and will change before actual reclassification from other comprehensive income to net earnings during the fiscal years ending May 31, 2018 and May 31, 2019. Economic (Non-designated) We enter into foreign exchange contracts to manage our foreign currency exchange rate exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment. We also enter into certain commodity contracts that do not qualify for hedge accounting treatment. Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings. The following table summarizes our economic (non-designated) (in thousands) Notional Maturity Date(s) Commodity contracts $ 23,920 March 2018 - December 2019 Foreign exchange contracts 4,687 March 2018 - June The following tables summarize the gain (loss) recognized in earnings for economic (non-designated) Gain (Loss) Recognized In Earnings for the Three Months Ended Location of Gain (Loss) February 28, (in thousands) Recognized in Earnings 2018 2017 Commodity contracts Cost of goods sold $ 1,787 $ 258 Foreign exchange contracts Miscellaneous expense (income), net 32 (172 ) Total $ 1,819 $ 86 Gain (Loss) Recognized in Earnings for the Nine Months Ended Location of Gain (Loss) February 28, (in thousands) Recognized in Earnings 2018 2017 Commodity contracts Cost of goods sold $ 4,035 $ 5,169 Foreign exchange contracts Miscellaneous income, net (157 ) (837 ) Total $ 3,878 $ 4,332 The gain (loss) on the foreign exchange contract derivatives significantly offsets the gain (loss) on the hedged item. |
Fair Value
Fair Value | 9 Months Ended |
Feb. 28, 2018 | |
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 – Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. Recurring Fair Value Measurements At February 28, 2018, our assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Quoted Prices Significant Significant (Level 3) Totals Assets Derivative instruments (1) $ - $ 849 $ - $ 849 Total assets $ - $ 849 $ - $ 849 Liabilities Derivative instruments (1) $ - $ 1,215 $ - $ 1,215 Contingent consideration obligation (2) - - 610 610 Total liabilities $ - $ 1,215 $ 610 $ 1,825 At May 31, 2017, our assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Quoted Prices Significant Significant (Level 3) Totals Assets Derivative instruments (1) $ - $ 8,326 $ - $ 8,326 Total assets $ - $ 8,326 $ - $ 8,326 Liabilities Derivative instruments (1) $ - $ 1,142 $ - $ 1,142 Contingent consideration obligation (2) - - 585 585 Total liabilities $ - $ 1,142 $ 585 $ 1,727 (1) The fair value of our derivative instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance (2) The fair value of the contingent consideration obligation is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business. The fair value measurement was based on Level 3 inputs not observable in the market. Non-Recurring During the second quarter of fiscal 2018, the Company determined that indicators of impairment were present with regard to the goodwill and intangible assets of the WEI reporting unit. As a result, these assets were written down to their estimated fair value of $0 resulting in an impairment charge of $7,325,000. The key assumptions that drove the fair value calculation were projected cash flows and the discount rate. During the second quarter of fiscal 2018, the Company also identified impairment indicators to be present with regard to vacant land at the oil & gas equipment facility in Bremen, Ohio, resulting in an impairment charge of $964,000 to write the land down to its estimated fair market value of $100,000. Fair value was determined based on market prices for similar assets. At May 31, 2017 and February 28, 2018, there were no assets or liabilities measured at fair value on a non-recurring The fair value of non-derivative |
Subsequent Events
Subsequent Events | 9 Months Ended |
Feb. 28, 2018 | |
Subsequent Events | NOTE Q – Subsequent Events On March 31, 2018, the Company closed on the sale of a majority of its ownership in WEI and Worthington retained a 10% interest in WEI. The impact of the transaction was immaterial. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Feb. 28, 2018 | |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In July 2015, amended accounting guidance was issued regarding the measurement of inventory. The amended guidance requires that inventory accounted for under the first-in, first-out last-in, first-out In August 2016, amended accounting guidance was issued to clarify the proper cash flow presentation of certain specific types of cash payments and cash receipts. The Company early adopted this amended guidance on a prospective basis effective June 1, 2017. The adoption of this guidance did not impact our consolidated statements of cash flows or ongoing financial reporting. In January 2017, amended accounting guidance was issued to clarify the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or a business. The Company early adopted this amended guidance on a prospective basis effective September 1, 2017. The adoption of this guidance did not impact our consolidated financial position or results of operations. In January 2017, amended accounting guidance was issued to simplify the goodwill impairment calculation, by removing Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill. The Company early adopted this amended guidance on a prospective basis effective September 1, 2017. The adoption of this guidance did not impact our consolidated financial position or results of operations. Recently Issued Accounting Standards In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP. The new 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. Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The guidance permits the use of either the retrospective or cumulative effect transition method. We are in the process of evaluating the effect this guidance will have on the presentation of our consolidated financial statements and related disclosures. The scoping and diagnostic phases of the implementation have been completed and reviews of the Company’s contracts are largely complete. We anticipate the timing or pattern of revenue recognition to change for certain revenue streams; however, we do not expect the impact of these changes to be material due to the short-term nature of the manufacturing cycle for these revenue streams. The Company will adopt this guidance on June 1, 2018 using the cumulative effect transition method. The Company will continue to monitor any modifications, clarifications, and interpretations by the FASB that may impact the Company’s conclusions. In February 2016, new accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP. Among other changes, the new guidance requires that leased assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented. We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the new guidance on our ongoing financial reporting. In June 2016, new accounting guidance was issued related to the measurement of credit losses on financial instruments. The new guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the new guidance to have a material impact on our ongoing financial reporting. In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows. In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period end-of-period In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line as other current employee compensation costs. Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the effective date for the capitalization of service cost. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows. In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting. The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted. We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations. In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness. The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption. The presentation and disclosure guidance is only required prospectively. Early adoption is permitted. We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting. In February 2018, amended guidance was issued that would allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA enacted by the U.S. government in December 2017. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. It is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. |
Economic (Non-designated) Hedges | Economic (Non-designated) We enter into foreign exchange contracts to manage our foreign currency exchange rate exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment. We also enter into certain commodity contracts that do not qualify for hedge accounting treatment. Accordingly, these derivative 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 accumulated OCI and reclassified into earnings in the same line 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 Unconsolidated25
Investments in Unconsolidated Affiliates (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Unconsolidated Affiliates | |
Financial Information | The following tables summarize combined financial information for our unconsolidated affiliates as of, and for the periods presented: (in thousands) February 28, May 31, Cash $ 17,828 $ 24,470 Other current assets 528,520 541,746 Current assets for discontinued operations 72,236 48,346 Noncurrent assets 360,495 342,938 Noncurrent assets for discontinued operations — 18,168 Total assets $ 979,079 $ 975,668 Current liabilities 131,906 148,056 Current liabilities for discontinued operations 9,454 8,891 Short-term borrowings 12,596 8,172 Current maturities of long-term debt 19,676 5,827 Long-term debt 264,317 268,711 Other noncurrent liabilities 19,554 20,890 Noncurrent liabilities for discontinued operations — 490 Equity 521,576 514,631 Total liabilities and equity $ 979,079 $ 975,668 Three Months Ended Nine Months Ended (in thousands) 2018 2017 2018 2017 Net sales $ 403,426 $ 384,261 $ 1,258,667 $ 1,188,568 Gross margin 72,828 84,645 230,185 305,383 Operating income 41,546 55,140 133,313 216,902 Depreciation and amortization 5,406 6,983 18,534 20,776 Interest expense 2,564 2,089 7,517 6,388 Income tax expense (benefit) (1,095 ) 5,065 2,069 16,128 Net earnings from continuing operations 36,058 47,309 118,995 193,228 Net earnings from discontinued operations 1,805 1,789 1,532 5,381 Net earnings 37,863 49,098 120,527 198,609 |
Restructuring and Other Expen26
Restructuring and Other Expense (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
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 (income) financial statement caption, in our consolidated statement of earnings is summarized below for the period presented: (in thousands) Balance, as of Expense (income) Payments Adjustments Balance, as of Early retirement and severance $ 253 $ 2,560 $ (1,188 ) $ (16 ) $ 1,609 Facility exit and other costs 536 499 (1,035 ) - - $ 789 3,059 $ (2,223 ) $ (16 ) $ 1,609 Net gain on sale of assets (10,452 ) Restructuring and other income, net $ (7,393 ) |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Summary of Tax Effects on Each Component of OCI | The following table summarizes the tax effects on each component of OCI for the three months ended February 28: 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax (in thousands) Foreign currency translation $ 9,542 $ - $ 9,542 $ 905 $ - $ 905 Pension liability adjustment 230 21 251 (117 ) 82 (35 ) Cash flow hedges (711 ) 155 (556 ) (1,299 ) 378 (921 ) Other comprehensive income (loss) $ 9,061 $ 176 $ 9,237 $ (511 ) $ 460 $ (51 ) The following table summarizes the tax effects on each component of OCI for the nine months ended February 28: 2018 2017 Before-Tax Tax Net-of-Tax Before-Tax Tax Net-of-Tax (in thousands) Foreign currency translation $ 26,925 $ - $ 26,925 $ (7,277 ) $ - $ (7,277 ) Pension liability adjustment 230 15 245 (117 ) 82 (35 ) Cash flow hedges (1,213 ) 334 (879 ) 1,836 (480 ) 1,356 Other comprehensive income (loss) $ 25,942 $ 349 $ 26,291 $ (5,558 ) $ (398 ) $ (5,956 ) |
Changes in Equity (Tables)
Changes in Equity (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Summary of Changes in Equity by Component and in Total | Controlling Interest (in thousands) Additional Paid-in Accumulated Retained Total Non- Total Balance at May 31, 2017 $ 303,391 $ (27,775 ) $ 676,019 $ 951,635 $ 122,294 $ 1,073,929 Net earnings - - 164,025 164,025 3,968 167,993 Other comprehensive income - 25,821 - 25,821 470 26,291 Common shares issued, net of withholding tax (3,415 ) - - (3,415 ) - (3,415 ) Common shares in NQ plans 1,003 - - 1,003 - 1,003 Stock-based compensation 11,203 - - 11,203 - 11,203 Purchases and retirement of common shares (16,311 ) - (143,631 ) (159,942 ) - (159,942 ) Cash dividends declared - - (39,159 ) (39,159 ) - (39,159 ) Dividends to noncontrolling interest - - - - (3,916 ) (3,916 ) Balance at February 28, 2018 $ 295,871 $ (1,954 ) $ 657,254 $ 951,171 $ 122,816 $ 1,073,987 |
Summary of Changes in Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated other comprehensive loss for the period presented: (in thousands) Foreign Pension Cash Accumulated Balance as of May 31, 2017 $ (17,358 ) $ (14,819 ) $ 4,402 $ (27,775 ) Other comprehensive income before reclassifications 26,455 230 11,362 38,047 Reclassification adjustments to income (a) - - (12,575 ) (12,575 ) Income taxes - 15 334 349 Balance as of February 28, 2018 $ 9,097 $ (14,574 ) $ 3,523 $ (1,954 ) (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.” |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Non-Qualified Stock Options | |
Assumptions to Value Stock Options | three-year vesting period. The following assumptions were used to value these stock options: Dividend yield 1.81 % Expected volatility 36.65 % Risk-free interest rate 1.98 % Expected term (years) 6.0 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
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 periods presented: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2018 2017 2018 2017 Numerator (basic & diluted): Net earnings attributable to controlling interest -income available to common shareholders $ 79,088 $ 35,889 $ 164,025 $ 148,021 Denominator: Denominator for basic earnings per share attributable to controlling interest—weighted average common shares 60,383 62,750 61,451 62,325 Effect of dilutive securities 1,962 2,227 2,056 2,433 Denominator for diluted earnings per share attributable to controlling interest—adjusted weighted average common shares 62,345 64,977 63,507 64,758 Basic earnings per share attributable to controlling interest $ 1.31 $ 0.57 $ 2.67 $ 2.37 Diluted earnings per share attributable to controlling interest $ 1.27 $ 0.55 $ 2.58 $ 2.29 |
Segment Operations (Tables)
Segment Operations (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Financial Information for Reportable Segments | The following table presents summarized financial information for our reportable segments as of, and for the periods presented: Three Months Nine Months Ended (in thousands) 2018 2017 2018 2017 Net sales Steel Processing $ 518,113 $ 478,174 $ 1,599,994 $ 1,492,654 Pressure Cylinders 295,506 198,433 866,179 598,303 Engineered Cabs 27,055 23,547 89,405 71,591 Other 983 3,282 5,582 6,217 Total net sales $ 841,657 $ 703,436 $ 2,561,160 $ 2,168,765 Operating income (loss) Steel Processing $ 31,125 $ 26,026 $ 105,127 $ 116,256 Pressure Cylinders 17,530 10,071 52,663 35,480 Engineered Cabs (4,083 ) (2,001 ) (6,031 ) (7,225 ) Other (1,809 ) 224 (14,712 ) (2,249 ) Total operating income $ 42,763 $ 34,320 $ 137,047 $ 142,262 Impairment of goodwill and long-lived assets Steel Processing $ - $ - $ - $ - Pressure Cylinders - - 964 - Engineered Cabs - - - - Other - - 7,325 - Total impairment of goodwill and long-lived assets $ - $ - $ 8,289 $ - Restructuring and other expense (income), net Steel Processing $ (3 ) $ 212 $ (10,059 ) $ 1,496 Pressure Cylinders - 1,056 2,365 3,165 Engineered Cabs - 169 (78 ) 1,379 Other - (43 ) 379 (46 ) Total restructuring and other expense (income), net $ (3 ) $ 1,394 $ (7,393 ) $ 5,994 (in thousands) February 28, May 31, Total assets Steel Processing $ 907,578 $ 882,863 Pressure Cylinders 1,191,736 766,611 Engineered Cabs 65,101 62,141 Other 450,321 613,729 Total assets $ 2,614,736 $ 2,325,344 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Schedule of Acquisition of Intangible Assets | (in thousands) Amount Useful Life (Years) Category Customer relationships $ 90,800 14-17 Trade names 62,200 Indefinite Technology 13,000 15-16 Total acquired identifiable intangible assets $ 166,000 |
Schedule of Consideration Transferred for the Assets of Amtrol and the Preliminary Fair Value Assigned to Assets Acquired And Liabilities Assumed | The following table summarizes the consideration transferred for the assets of Amtrol and the preliminary fair value assigned to the assets acquired and liabilities assumed at the acquisition date: (in thousands) Preliminary Measurement Revised Cash $ 6,893 $ - $ 6,893 Accounts receivable 40,212 - 40,212 Inventories 37,249 - 37,249 Prepaid expenses 981 - 981 Other assets 2,550 - 2,550 Intangible assets 166,000 - 166,000 Property, plant and equipment 52,870 - 52,870 Total assets 306,755 - 306,755 Accounts payable 25,945 - 25,945 Accrued liabilities 21,016 - 21,016 Long-term debt including current maturities 2,287 - 2,287 Other accrued items 3,993 - 3,993 Deferred income taxes, net 64,495 (413 ) 64,082 Net identifiable assets 189,019 413 189,432 Goodwill 102,902 (413 ) 102,489 Purchase price $ 291,921 $ - $ 291,921 |
Summary of Unaudited Pro forma Results | Three months ended Nine months ended (in thousands, except per share amounts) 2018 2017 2018 2017 Net sales $ 841,657 $ 762,956 $ 2,561,160 $ 2,350,152 Net earnings attributable to controlling interest $ 79,087 $ 39,090 $ 168,269 $ 156,916 Diluted earnings per share attributable to controlling interest $ 1.27 $ 0.60 $ 2.65 $ 2.42 |
Derivative Instruments and He33
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Schedule of Fair Value of Derivative Instruments | 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 February 28, 2018: Asset Derivatives Liability Derivatives (in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Commodity contracts Receivables $ 4,880 Accounts payable $ - Other assets 28 Other liabilities - 4,908 - Interest rate contracts Receivables - Accounts payable 240 Other assets - Other liabilities 4 - 244 Totals $ 4,908 $ 244 Derivatives not designated as hedging instruments: Commodity contracts Receivables $ 3,410 Accounts payable $ 837 Other assets 173 Other liabilities 103 3,583 940 Foreign exchange contracts Receivables - Accounts payable 31 Totals $ 3,583 $ 971 Total derivative instruments $ 8,491 $ 1,215 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, 2017: Asset Derivatives Liability Derivatives (in thousands) Balance Sheet Location Fair Value Balance Sheet Location Fair Derivatives designated as hedging instruments: Commodity contracts Receivables $ 7,148 Accounts payable $ 111 Other assets 6 Other liabilities 159 7,154 270 Interest rate contracts Receivables - Accounts payable 141 Other assets - Other liabilities 160 - 301 Totals $ 7,154 $ 571 Derivatives not designated as hedging instruments: Commodity contracts Receivables $ 1,110 Accounts payable $ 570 Other assets - Other liabilities 1 1,110 571 Foreign exchange contracts Receivables 62 Accounts payable - Totals $ 1,172 $ 571 Total derivative instruments $ 8,326 $ 1,142 |
Schedule of Derivatives Designated as Cash Flow Hedging Instruments | The following table summarizes the gain recognized in OCI and the gain (loss) reclassified from AOCI into earnings for derivative instruments designated as cash flow hedges for the periods presented: Location of Location of Gain (Loss) Gain (Loss) Gain Gain Reclassified Reclassified (Ineffective (Ineffective Gain from from Portion) Portion) Recognized Accumulated Accumulated and Excluded and Excluded in OCI OCI OCI from from (Effective (Effective (Effective Effectiveness Effectiveness (in thousands) Portion) Portion) Portion) Testing Testing For the three months ended February 28, 2018: Commodity contracts $ 2,429 Cost of goods sold $ 3,195 Cost of goods sold $ - Interest rate contracts 21 Interest expense (34 ) Interest expense - Totals $ 2,450 $ 3,161 $ - For the three months ended February 28, 2017: Commodity contracts $ 2,037 Cost of goods sold $ 3,397 Cost of goods sold $ - Interest rate contracts 25 Interest expense (36 ) Interest expense - Totals $ 2,062 $ 3,361 $ - For the nine months ended February 28, 2018: Commodity contracts $ 8,243 Cost of goods sold $ 13,000 Cost of goods sold $ - Interest rate contracts 3,119 Interest expense (425 ) Interest expense - Totals $ 11,362 $ 12,575 $ - For the nine months ended February 28, 2017: Commodity contracts $ 9,963 Cost of goods sold $ 8,882 Cost of goods sold $ - Interest rate contracts 149 Interest expense (606 ) Interest expense - Totals $ 10,112 $ 8,276 $ - |
Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments | The following tables summarize the gain (loss) recognized in earnings for economic (non-designated) Gain (Loss) Recognized In Earnings for the Three Months Ended Location of Gain (Loss) February 28, (in thousands) Recognized in Earnings 2018 2017 Commodity contracts Cost of goods sold $ 1,787 $ 258 Foreign exchange contracts Miscellaneous expense (income), net 32 (172 ) Total $ 1,819 $ 86 Gain (Loss) Recognized in Earnings for the Nine Months Ended Location of Gain (Loss) February 28, (in thousands) Recognized in Earnings 2018 2017 Commodity contracts Cost of goods sold $ 4,035 $ 5,169 Foreign exchange contracts Miscellaneous income, net (157 ) (837 ) Total $ 3,878 $ 4,332 |
Cash Flow Hedges | |
Schedule of Summary of Derivative Hedges | The following table summarizes our cash flow hedges outstanding at February 28, 2018: (in thousands) Notional Maturity Date Commodity contracts $ 22,473 March 2018 - June 2019 Interest rate contracts 18,656 September 2019 |
Derivatives Not Designated As Hedging Instruments | |
Schedule of Summary of Derivative Hedges | The following table summarizes our economic (non-designated) (in thousands) Notional Maturity Date(s) Commodity contracts $ 23,920 March 2018 - December 2019 Foreign exchange contracts 4,687 March 2018 - June |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Feb. 28, 2018 | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | At February 28, 2018, our assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Quoted Prices Significant Significant (Level 3) Totals Assets Derivative instruments (1) $ - $ 849 $ - $ 849 Total assets $ - $ 849 $ - $ 849 Liabilities Derivative instruments (1) $ - $ 1,215 $ - $ 1,215 Contingent consideration obligation (2) - - 610 610 Total liabilities $ - $ 1,215 $ 610 $ 1,825 At May 31, 2017, our assets and liabilities measured at fair value on a recurring basis were as follows: (in thousands) Quoted Prices Significant Significant (Level 3) Totals Assets Derivative instruments (1) $ - $ 8,326 $ - $ 8,326 Total assets $ - $ 8,326 $ - $ 8,326 Liabilities Derivative instruments (1) $ - $ 1,142 $ - $ 1,142 Contingent consideration obligation (2) - - 585 585 Total liabilities $ - $ 1,142 $ 585 $ 1,727 (1) The fair value of our derivative instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance (2) The fair value of the contingent consideration obligation is determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business. The fair value measurement was based on Level 3 inputs not observable in the market. |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - Joint Venture Transactions | Feb. 28, 2018Entity |
Significant Accounting Policies [Line Items] | |
Number of joint ventures | 5 |
Spartan | |
Significant Accounting Policies [Line Items] | |
Percent of controlling interest by the Company | 52.00% |
TWB | |
Significant Accounting Policies [Line Items] | |
Percent of controlling interest by the Company | 55.00% |
Worthington Aritas | |
Significant Accounting Policies [Line Items] | |
Percent of controlling interest by the Company | 75.00% |
WEI | |
Significant Accounting Policies [Line Items] | |
Percent of controlling interest by the Company | 75.00% |
Worthington Specialty Processing | |
Significant Accounting Policies [Line Items] | |
Percent of controlling interest by the Company | 51.00% |
Investments in Unconsolidated36
Investments in Unconsolidated Affiliates - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Feb. 28, 2018USD ($) | |
WAVE | |
Investments in and Advances to Affiliates [Line Items] | |
Percent of interest by unconsolidated affiliates | 50.00% |
Cumulative distributions in excess of investment | $ 59,563 |
Proceeds from sale of equity method investments | 45,000 |
Unconsolidated Affiliates | |
Investments in and Advances to Affiliates [Line Items] | |
Distributions from unconsolidated affiliates | $ 61,553 |
Joint Venture Transactions | ArtiFlex | |
Investments in and Advances to Affiliates [Line Items] | |
Percent of interest by unconsolidated affiliates | 50.00% |
Joint Venture Transactions | ClarkDietrich | |
Investments in and Advances to Affiliates [Line Items] | |
Percent of interest by unconsolidated affiliates | 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% |
Joint Venture Transactions | Serviacero | |
Investments in and Advances to Affiliates [Line Items] | |
Percent of interest by unconsolidated affiliates | 50.00% |
Joint Venture Transactions | WAVE | |
Investments in and Advances to Affiliates [Line Items] | |
Percent of interest by unconsolidated affiliates | 50.00% |
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% |
Investments in Unconsolidated37
Investments in Unconsolidated Affiliates - Schedule of Combined Financial Information for Unconsolidated Affiliates (Detail) - Unconsolidated Affiliates - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | May 31, 2017 | |
Investments in and Advances to Affiliates [Line Items] | |||||
Cash | $ 17,828 | $ 17,828 | $ 24,470 | ||
Other current assets | 528,520 | 528,520 | 541,746 | ||
Current assets for discontinued operations | 72,236 | 72,236 | 48,346 | ||
Noncurrent assets | 360,495 | 360,495 | 342,938 | ||
Noncurrent assets for discontinued operations | 18,168 | ||||
Total assets | 979,079 | 979,079 | 975,668 | ||
Current liabilities | 131,906 | 131,906 | 148,056 | ||
Current liabilities for discontinued operations | 9,454 | 9,454 | 8,891 | ||
Short-term borrowings | 12,596 | 12,596 | 8,172 | ||
Current maturities of long-term debt | 19,676 | 19,676 | 5,827 | ||
Long-term debt | 264,317 | 264,317 | 268,711 | ||
Other noncurrent liabilities | 19,554 | 19,554 | 20,890 | ||
Noncurrent liabilities for discontinued operations | 490 | ||||
Equity | 521,576 | 521,576 | 514,631 | ||
Total liabilities and equity | 979,079 | 979,079 | $ 975,668 | ||
Net sales | 403,426 | $ 384,261 | 1,258,667 | $ 1,188,568 | |
Gross margin | 72,828 | 84,645 | 230,185 | 305,383 | |
Operating income | 41,546 | 55,140 | 133,313 | 216,902 | |
Depreciation and amortization | 5,406 | 6,983 | 18,534 | 20,776 | |
Interest expense | 2,564 | 2,089 | 7,517 | 6,388 | |
Income tax expense (benefit) | (1,095) | 5,065 | 2,069 | 16,128 | |
Net earnings from continuing operations | 36,058 | 47,309 | 118,995 | 193,228 | |
Net earnings from discontinued operations | 1,805 | 1,789 | 1,532 | 5,381 | |
Net earnings | $ 37,863 | $ 49,098 | $ 120,527 | $ 198,609 |
Impairment of Goodwill and Lo38
Impairment of Goodwill and Long-Lived Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Nov. 30, 2017 | Feb. 28, 2018 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment of long-lived assets | $ 8,289 | |
WEI Reporting Unit | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment of long-lived assets | $ 7,325 | |
Bremen, Ohio | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment of long-lived assets | $ 964 |
Restructuring and Other Expen39
Restructuring and Other Expense - Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | $ 789 | |||
Expense | 3,059 | |||
Payments | (2,223) | |||
Adjustments | (16) | |||
Ending Balance | $ 1,609 | 1,609 | ||
Net gain on sale of assets | (10,452) | |||
Restructuring and other income, net | (3) | $ 1,394 | (7,393) | $ 5,994 |
Early Retirement And Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 253 | |||
Expense | 2,560 | |||
Payments | (1,188) | |||
Adjustments | (16) | |||
Ending Balance | $ 1,609 | 1,609 | ||
Facility Exit And Other Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning Balance | 536 | |||
Expense | 499 | |||
Payments | $ (1,035) |
Restructuring and Other Expen40
Restructuring and Other Expense - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Net gain (loss) on sale of assets | $ 1,437 | $ (1,875) | $ 10,692 | $ (3,358) |
AMTROL | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance expense | 2,365 | |||
Other Non-significant Restructuring Activities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance expense | 195 | |||
Net gain (loss) on sale of assets | (143) | |||
Facility exit costs credit | (78) | |||
Closure of Precision Specialty Metals, Inc | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Facility exit costs | 577 | |||
Net gain (loss) on sale of assets | 10,595 | |||
Cash proceeds from sale of business | $ 15,874 |
Guarantees - Additional Informa
Guarantees - Additional Information (Detail) | 9 Months Ended |
Feb. 28, 2018USD ($) | |
Stand-by Letters of Credit | |
Guarantor Obligations [Line Items] | |
Letter of credit amount outstanding | $ 14,606,000 |
Drawn amount of letter of credit outstanding | 0 |
Operating Lease of Aircraft | |
Guarantor Obligations [Line Items] | |
Maximum potential obligation | $ 8,587,000 |
Debt and Receivables Securiti42
Debt and Receivables Securitization - Additional Information (Detail) - USD ($) | Feb. 16, 2018 | Jan. 16, 2018 | Jul. 28, 2017 | Jun. 30, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | Jan. 15, 2018 |
Debt And Receivables Securitization [Line Items] | |||||||||
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion) | $ 2,450,000 | $ 2,062,000 | $ 11,362,000 | $ 10,112,000 | |||||
Remaining borrowing capacity | 486,755,000 | $ 486,755,000 | |||||||
Senior Unsecured Notes 4.300% due August 1, 2032 | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Principal amount | $ 200,000,000 | ||||||||
Debt, maturity date | Aug. 1, 2032 | ||||||||
Debt, interest rate | 4.30% | ||||||||
Percentage of principal amount debt instrument was sold to the public | 99.901% | ||||||||
Yield to maturity | 4.309% | ||||||||
Debt discount | $ 198,000 | 190,000 | $ 190,000 | ||||||
Debt issuance cost | $ 2,116,000 | ||||||||
Unamortized portion of debt issuance costs | 2,034,000 | $ 2,034,000 | |||||||
Senior Unsecured Notes 4.300% due August 1, 2032 | Interest Rate Swap | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Notional Amount | $ 150,000,000 | ||||||||
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion) | $ 3,098,000 | ||||||||
Securities Sold under Agreements to Repurchase | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 100,000,000 | |||||||
Debt maturity period | 1 year | ||||||||
Maturity date | 2019-01 | 2019-01 | |||||||
Number of days past due trade accounts receivables are ineligible for securitization | 90 days | ||||||||
Borrowings outstanding | 0 | $ 0 | |||||||
Unsecured Revolving Credit Facility | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Debt issuance cost | 805,000 | ||||||||
Maximum borrowing capacity | 500,000,000 | $ 500,000,000 | |||||||
Debt maturity period | 3 years | ||||||||
Maturity date | 2023-02 | ||||||||
Unsecured Revolving Credit Facility | Maximum | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Debt maturity period | 1 year | ||||||||
Stand-by Letters of Credit | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Letter of credit amount outstanding | 14,606,000 | $ 14,606,000 | |||||||
Letter of Credit | |||||||||
Debt And Receivables Securitization [Line Items] | |||||||||
Letter of credit amount outstanding | $ 13,245,000 | $ 13,245,000 |
Other Comprehensive Income - Su
Other Comprehensive Income - Summary of Tax Effects on Each Component of OCI (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Components Of Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive income (loss), before tax | $ 9,061 | $ (511) | $ 25,942 | $ (5,558) |
Other comprehensive income (loss), tax | 176 | 460 | 349 | (398) |
Other comprehensive income (loss) | 9,237 | (51) | 26,291 | (5,956) |
Foreign Currency Translation | ||||
Components Of Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive income (loss), before tax | 9,542 | 905 | 26,925 | (7,277) |
Other comprehensive income (loss) | 9,542 | 905 | 26,925 | (7,277) |
Pension Liability Adjustment | ||||
Components Of Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive income (loss), before tax | 230 | (117) | 230 | (117) |
Other comprehensive income (loss), tax | 21 | 82 | 15 | 82 |
Other comprehensive income (loss) | 251 | (35) | 245 | (35) |
Cash Flow Hedges | ||||
Components Of Other Comprehensive Income Loss [Line Items] | ||||
Other comprehensive income (loss), before tax | (711) | (1,299) | (1,213) | 1,836 |
Other comprehensive income (loss), tax | 155 | 378 | 334 | (480) |
Other comprehensive income (loss) | $ (556) | $ (921) | $ (879) | $ 1,356 |
Changes in Equity - Summary of
Changes in Equity - Summary of Changes in Equity by Component and in Total (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Balance as of May 31, 2017 | $ 1,073,929 | |||
Net earnings | $ 78,297 | $ 38,951 | 167,993 | $ 157,354 |
Other comprehensive income | 9,237 | $ (51) | 26,291 | $ (5,956) |
Common shares issued, net of withholding tax | (3,415) | |||
Common shares in NQ plans | 1,003 | |||
Stock-based compensation | 11,203 | |||
Purchases and retirement of common shares | (159,942) | |||
Cash dividends declared | (39,159) | |||
Dividends to noncontrolling interest | (3,916) | |||
Balance as of February 28, 2018 | 1,073,987 | 1,073,987 | ||
Additional Paid-in Capital | ||||
Balance as of May 31, 2017 | 303,391 | |||
Common shares issued, net of withholding tax | (3,415) | |||
Common shares in NQ plans | 1,003 | |||
Stock-based compensation | 11,203 | |||
Purchases and retirement of common shares | (16,311) | |||
Balance as of February 28, 2018 | 295,871 | 295,871 | ||
Accumulated Other Comprehensive Loss, Net of Tax | ||||
Balance as of May 31, 2017 | (27,775) | |||
Other comprehensive income | 25,821 | |||
Balance as of February 28, 2018 | (1,954) | (1,954) | ||
Retained Earnings | ||||
Balance as of May 31, 2017 | 676,019 | |||
Net earnings | 164,025 | |||
Purchases and retirement of common shares | (143,631) | |||
Cash dividends declared | (39,159) | |||
Balance as of February 28, 2018 | 657,254 | 657,254 | ||
Parent | ||||
Balance as of May 31, 2017 | 951,635 | |||
Net earnings | 164,025 | |||
Other comprehensive income | 25,821 | |||
Common shares issued, net of withholding tax | (3,415) | |||
Common shares in NQ plans | 1,003 | |||
Stock-based compensation | 11,203 | |||
Purchases and retirement of common shares | (159,942) | |||
Cash dividends declared | (39,159) | |||
Balance as of February 28, 2018 | 951,171 | 951,171 | ||
Noncontrolling Interest | ||||
Balance as of May 31, 2017 | 122,294 | |||
Net earnings | 3,968 | |||
Other comprehensive income | 470 | |||
Dividends to noncontrolling interest | (3,916) | |||
Balance as of February 28, 2018 | $ 122,816 | $ 122,816 |
Changes in Equity - Summary o45
Changes in Equity - Summary of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance as of May 31, 2017 | $ 1,073,929 | ||||
Income taxes | $ 176 | $ 460 | 349 | $ (398) | |
Balance as of February 28, 2018 | 1,073,987 | 1,073,987 | |||
Foreign Currency Translation | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance as of May 31, 2017 | (17,358) | ||||
Other comprehensive income before reclassifications | 26,455 | ||||
Balance as of February 28, 2018 | 9,097 | 9,097 | |||
Pension Liability Adjustment | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance as of May 31, 2017 | (14,819) | ||||
Other comprehensive income before reclassifications | 230 | ||||
Income taxes | 15 | ||||
Balance as of February 28, 2018 | (14,574) | (14,574) | |||
Cash Flow Hedges | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance as of May 31, 2017 | 4,402 | ||||
Other comprehensive income before reclassifications | 11,362 | ||||
Reclassification adjustments to income | [1] | (12,575) | |||
Income taxes | 334 | ||||
Balance as of February 28, 2018 | 3,523 | 3,523 | |||
Accumulated Other Comprehensive Loss, Net of Tax | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance as of May 31, 2017 | (27,775) | ||||
Other comprehensive income before reclassifications | 38,047 | ||||
Reclassification adjustments to income | [1] | (12,575) | |||
Income taxes | 349 | ||||
Balance as of February 28, 2018 | $ (1,954) | $ (1,954) | |||
[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." |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Thousands | 9 Months Ended |
Feb. 28, 2018USD ($)$ / sharesshares | |
Non-Qualified Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-qualified stock options, granted | shares | 90,200 |
Non-qualified stock option, per share price | $ / shares | $ 47.76 |
Non-qualified stock option, fair value, per share price | $ / shares | $ 14.99 |
Pre-tax stock-based compensation | $ | $ 1,203 |
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 | shares | 170,750 |
Restricted common shares, fair value per share | $ / shares | $ 47.89 |
Pre-tax stock-based compensation | $ | $ 7,399 |
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 | shares | 54,300 |
Pre-tax stock-based compensation | $ | $ 2,748 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions To Value Stock Options (Detail) - Non-Qualified Stock Options | 9 Months Ended |
Feb. 28, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 1.81% |
Expected volatility | 36.65% |
Risk-free interest rate | 1.98% |
Expected term (years) | 6 years |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
May 31, 2018 | Feb. 28, 2018 | Feb. 28, 2017 | May 31, 2018 | |
Income Taxes [Line Items] | ||||
Estimated annual effective income tax rate | 10.30% | 27.20% | ||
U.S. corporate tax rate | 35.00% | |||
Provisional income tax benefit related to re-measurement of deferred tax assets and liabilities | $ 41.1 | |||
Provisional income tax benefit | $ 6.8 | |||
Scenario, Plan [Member] | ||||
Income Taxes [Line Items] | ||||
Estimated annual effective income tax rate | 24.00% | |||
U.S. corporate tax rate | 29.20% | 21.00% |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share Attributable to Controlling Interest (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Numerator (basic & diluted): | ||||
Net earnings attributable to controlling interest -income available to common shareholders | $ 79,088 | $ 35,889 | $ 164,025 | $ 148,021 |
Denominator: | ||||
Denominator for basic earnings per share attributable to controlling interest-weighted average common shares | 60,383 | 62,750 | 61,451 | 62,325 |
Effect of dilutive securities | 1,962 | 2,227 | 2,056 | 2,433 |
Denominator for diluted earnings per share attributable to controlling interest-adjusted weighted average common shares | 62,345 | 64,977 | 63,507 | 64,758 |
Basic earnings per share attributable to controlling interest | $ 1.31 | $ 0.57 | $ 2.67 | $ 2.37 |
Diluted earnings per share attributable to controlling interest | $ 1.27 | $ 0.55 | $ 2.58 | $ 2.29 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares excluded from computation of diluted earnings per share | 91,933 | 107,224 | 81,087 | 97,638 |
Segment Operations - Financial
Segment Operations - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | May 31, 2017 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 841,657 | $ 703,436 | $ 2,561,160 | $ 2,168,765 | |
Operating income (loss) | 42,763 | 34,320 | 137,047 | 142,262 | |
Impairment of goodwill and long-lived assets | 8,289 | ||||
Restructuring and other expense (income), net | (3) | 1,394 | (7,393) | 5,994 | |
Total assets | 2,614,736 | 2,614,736 | $ 2,325,344 | ||
Steel Processing | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 518,113 | 478,174 | 1,599,994 | 1,492,654 | |
Operating income (loss) | 31,125 | 26,026 | 105,127 | 116,256 | |
Restructuring and other expense (income), net | (3) | 212 | (10,059) | 1,496 | |
Total assets | 907,578 | 907,578 | 882,863 | ||
Pressure Cylinders | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 295,506 | 198,433 | 866,179 | 598,303 | |
Operating income (loss) | 17,530 | 10,071 | 52,663 | 35,480 | |
Impairment of goodwill and long-lived assets | 964 | ||||
Restructuring and other expense (income), net | 1,056 | 2,365 | 3,165 | ||
Total assets | 1,191,736 | 1,191,736 | 766,611 | ||
Engineered Cabs | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 27,055 | 23,547 | 89,405 | 71,591 | |
Operating income (loss) | (4,083) | (2,001) | (6,031) | (7,225) | |
Restructuring and other expense (income), net | 169 | (78) | 1,379 | ||
Total assets | 65,101 | 65,101 | 62,141 | ||
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 983 | 3,282 | 5,582 | 6,217 | |
Operating income (loss) | (1,809) | 224 | (14,712) | (2,249) | |
Impairment of goodwill and long-lived assets | 7,325 | ||||
Restructuring and other expense (income), net | $ (43) | 379 | $ (46) | ||
Total assets | $ 450,321 | $ 450,321 | $ 613,729 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - AMTROL - USD ($) $ in Thousands | Jun. 02, 2017 | Feb. 28, 2018 | Feb. 28, 2018 |
Business Acquisition [Line Items] | |||
Total consideration for acquired entity | $ 291,921 | $ 291,921 | |
Acquisition related costs | $ 3,568 | 1,568 | |
Net sales | 65,766 | 191,047 | |
Operating income | $ 7,323 | $ 11,151 |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition of Identifiable Intangible Assets (Detail) - AMTROL $ in Thousands | 9 Months Ended |
Feb. 28, 2018USD ($) | |
Business Acquisition [Line Items] | |
Total acquired identifiable intangible assets | $ 166,000 |
Trade Names | |
Business Acquisition [Line Items] | |
Acquired indefinite lived intangible assets | 62,200 |
Customer relationships | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | 90,800 |
Technology | |
Business Acquisition [Line Items] | |
Acquired finite lived intangible assets | $ 13,000 |
Minimum | Customer relationships | |
Business Acquisition [Line Items] | |
Useful Life (Years) | 14 years |
Minimum | Technology | |
Business Acquisition [Line Items] | |
Useful Life (Years) | 15 years |
Maximum | Customer relationships | |
Business Acquisition [Line Items] | |
Useful Life (Years) | 17 years |
Maximum | Technology | |
Business Acquisition [Line Items] | |
Useful Life (Years) | 16 years |
Acquisitions - Schedule of Cons
Acquisitions - Schedule of Consideration Transferred and the Priliminary Fair Value Assigned to Assets Acquired And Liabilities Assumed (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2018 | Feb. 28, 2018 | May 31, 2017 | |
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||
Goodwill | $ 352,596 | $ 352,596 | $ 247,673 |
AMTROL | |||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||
Cash | 6,893 | 6,893 | |
Accounts receivable | 40,212 | 40,212 | |
Inventories | 37,249 | 37,249 | |
Prepaid expenses | 981 | 981 | |
Other assets | 2,550 | 2,550 | |
Intangible assets | 166,000 | 166,000 | |
Property, plant and equipment | 52,870 | 52,870 | |
Total assets | 306,755 | 306,755 | |
Accounts payable | 25,945 | 25,945 | |
Accrued liabilities | 21,016 | 21,016 | |
Long-term debt including current maturities | 2,287 | 2,287 | |
Other accrued items | 3,993 | 3,993 | |
Deferred income taxes, net | 64,082 | 64,082 | |
Net identifiable assets | 189,432 | 189,432 | |
Goodwill | 102,489 | 102,489 | |
Purchase price | 291,921 | 291,921 | |
AMTROL | Preliminary | |||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||
Cash | 6,893 | 6,893 | |
Accounts receivable | 40,212 | 40,212 | |
Inventories | 37,249 | 37,249 | |
Prepaid expenses | 981 | 981 | |
Other assets | 2,550 | 2,550 | |
Intangible assets | 166,000 | 166,000 | |
Property, plant and equipment | 52,870 | 52,870 | |
Total assets | 306,755 | 306,755 | |
Accounts payable | 25,945 | 25,945 | |
Accrued liabilities | 21,016 | 21,016 | |
Long-term debt including current maturities | 2,287 | 2,287 | |
Other accrued items | 3,993 | 3,993 | |
Deferred income taxes, net | 64,495 | 64,495 | |
Net identifiable assets | 189,019 | 189,019 | |
Goodwill | 102,902 | 102,902 | |
Purchase price | 291,921 | ||
AMTROL | Measurement Period Adjustments | |||
Estimated Fair Value of Assets Acquired and Liabilities Assumed: | |||
Deferred income taxes, net | (413) | (413) | |
Net identifiable assets | 413 | 413 | |
Goodwill | $ (413) | $ (413) |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro forma Results (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 841,657 | $ 762,956 | $ 2,561,160 | $ 2,350,152 |
Net earnings attributable to controlling interest | $ 79,087 | $ 39,090 | $ 168,269 | $ 156,916 |
Diluted earnings per share attributable to controlling interest | $ 1.27 | $ 0.60 | $ 2.65 | $ 2.42 |
Derivative Instruments and He56
Derivative Instruments and Hedging Activities - Schedule of Fair Value of Derivative Instruments (Detail) - USD ($) $ in Thousands | Feb. 28, 2018 | May 31, 2017 |
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | $ 8,491 | $ 8,326 |
Liability Derivatives at Fair Value | 1,215 | 1,142 |
Derivatives Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 4,908 | 7,154 |
Liability Derivatives at Fair Value | 244 | 571 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 4,908 | 7,154 |
Liability Derivatives at Fair Value | 270 | |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Other Liabilities | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 159 | |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 4,880 | 7,148 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Other Assets | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 28 | 6 |
Derivatives Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 111 | |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 244 | 301 |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | Other Liabilities | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 4 | 160 |
Derivatives Designated As Hedging Instruments | Interest Rate Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 240 | 141 |
Derivatives Not Designated As Hedging Instruments | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 3,583 | 1,172 |
Liability Derivatives at Fair Value | 971 | 571 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 3,583 | 1,110 |
Liability Derivatives at Fair Value | 940 | 571 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Other Liabilities | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 103 | 1 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 3,410 | 1,110 |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Other Assets | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | 173 | |
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | 837 | 570 |
Derivatives Not Designated As Hedging Instruments | Foreign Currency Contracts | Receivables | ||
Derivative [Line Items] | ||
Asset Derivatives at Fair Value | $ 62 | |
Derivatives Not Designated As Hedging Instruments | Foreign Currency Contracts | Accounts Payable | ||
Derivative [Line Items] | ||
Liability Derivatives at Fair Value | $ 31 |
Derivative Instruments and He57
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Feb. 28, 2018 | May 31, 2017 | |
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 | $ 858 | $ 100 |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings | 3,530 | |
Losses in accumulated other comprehensive income expected to be reclassified into net earnings, tax | $ 1,513 |
Derivative Instruments and He58
Derivative Instruments and Hedging Activities - Schedule of Summary of Derivative Hedges (Detail) $ in Thousands | 9 Months Ended |
Feb. 28, 2018USD ($) | |
Commodity Contracts | Derivatives Not Designated As Hedging Instruments | |
Derivative [Line Items] | |
Notional Amount | $ 23,920 |
Commodity Contracts | Derivatives Not Designated As Hedging Instruments | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2018-03 |
Commodity Contracts | Derivatives Not Designated As Hedging Instruments | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2019-12 |
Foreign Currency Contracts | Derivatives Not Designated As Hedging Instruments | |
Derivative [Line Items] | |
Notional Amount | $ 4,687 |
Foreign Currency Contracts | Derivatives Not Designated As Hedging Instruments | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2018-03 |
Foreign Currency Contracts | Derivatives Not Designated As Hedging Instruments | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2018-06 |
Cash Flow Hedges | Commodity Contracts | |
Derivative [Line Items] | |
Notional Amount | $ 22,473 |
Cash Flow Hedges | Commodity Contracts | Minimum | |
Derivative [Line Items] | |
Maturity Date | 2018-03 |
Cash Flow Hedges | Commodity Contracts | Maximum | |
Derivative [Line Items] | |
Maturity Date | 2019-06 |
Cash Flow Hedges | Interest Rate Contracts | |
Derivative [Line Items] | |
Notional Amount | $ 18,656 |
Maturity Date | 2019-09 |
Derivative Instruments and He59
Derivative Instruments and Hedging Activities - Schedule of Derivatives Designated as Cash Flow Hedging Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Derivative [Line Items] | ||||
Gain Recognized in OCI (Effective Portion) | $ 2,450 | $ 2,062 | $ 11,362 | $ 10,112 |
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion) | 3,161 | 3,361 | 12,575 | 8,276 |
Commodity Contracts | ||||
Derivative [Line Items] | ||||
Gain Recognized in OCI (Effective Portion) | 2,429 | 2,037 | 8,243 | 9,963 |
Commodity Contracts | Cost of Goods Sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion) | 3,195 | 3,397 | 13,000 | 8,882 |
Interest Rate Contracts | ||||
Derivative [Line Items] | ||||
Gain Recognized in OCI (Effective Portion) | 21 | 25 | 3,119 | 149 |
Interest Rate Contracts | Interest Expense | ||||
Derivative [Line Items] | ||||
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion) | $ (34) | $ (36) | $ (425) | $ (606) |
Derivative Instruments and He60
Derivative Instruments and Hedging Activities - Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2018 | Feb. 28, 2017 | Feb. 28, 2018 | Feb. 28, 2017 | |
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | $ 1,819 | $ 86 | $ 3,878 | $ 4,332 |
Commodity Contracts | Cost of Goods Sold | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | 1,787 | 258 | 4,035 | 5,169 |
Foreign Currency Contracts | Miscellaneous Income, Net | ||||
Derivative [Line Items] | ||||
Gain (Loss) Recognized in Earnings | $ 32 | $ (172) | $ (157) | $ (837) |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Feb. 28, 2018 | May 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | $ 849 | $ 8,326 | |
Liabilities | 1,825 | 1,727 | |
Derivative Instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 849 | 8,326 |
Liabilities | [1] | 1,215 | 1,142 |
Contingent consideration obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | [2] | 610 | 585 |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 849 | 8,326 | |
Liabilities | 1,215 | 1,142 | |
Significant Other Observable Inputs (Level 2) | Derivative Instruments | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | [1] | 849 | 8,326 |
Liabilities | [1] | 1,215 | 1,142 |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 610 | 585 | |
Significant Unobservable Inputs (Level 3) | Contingent consideration obligations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | [2] | $ 610 | $ 585 |
[1] | The fair value of our derivative instruments is based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to "NOTE O - Derivative Instruments and Hedging Activities" for additional information regarding our use of derivative instruments. | ||
[2] | The fair value of the contingent consideration obligation is determined using a probability weighted cash flow approach based on management's projections of future cash flows of the acquired business. The fair value measurement was based on Level 3 inputs not observable in the market. |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of long-lived assets | $ 8,289,000 | ||
Asset measured at fair value on non-recurring basis | 0 | $ 0 | |
Liabilities measured at fair value on non-recurring basis | 0 | 0 | |
WEI Reporting Unit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of long-lived assets | $ 7,325,000 | ||
Asset measured at fair value on non-recurring basis | 0 | ||
Bremen, Ohio | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment of long-lived assets | 964,000 | ||
Asset measured at fair value on non-recurring basis | $ 100,000 | ||
Long-term Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-term debt at fair value including current maturities | 799,636,000 | 618,059,000 | |
Long-term debt at carrying amount including current maturities | $ 781,863,000 | $ 578,487,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Mar. 31, 2018 |
WEI | Joint Venture Transactions | |
Subsequent Event [Line Items] | |
Ownership percentage | 10.00% |