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CHANGES IN BUSINESS | 12 Months Ended
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Aug. 31, 2018
Business Combinations [Abstract] |
Changes in Business | NOTE 3. CHANGES IN BUSINESS Pending Acquisition On December 29, 2017, the Company entered into a definitive stock and asset purchase agreement to acquire certain U.S. rebar steel mill and fabrication assets from Gerdau S.A. (the "Business"), a producer of long and specialty steel products in the Americas, for a cash purchase price of $600.0 million, subject to customary purchase price adjustments. The acquisition includes 33 rebar fabrication facilities in the U.S. as well as steel mills located in Knoxville, Tennessee; Jacksonville, Florida; Sayreville, New Jersey and Rancho Cucamonga, California, with annual melt capacity of 2.7 million tons, bringing the Company’s global melt capacity to approximately 7.2 million tons at the close of the transaction. The closing of the transaction is expected before the end of calendar year 2018 and is subject to the satisfaction or waiver of customary closing conditions, including regulatory review. The Company expects to fund the purchase price for the acquisition of the Business, including related fees and expenses, with proceeds from the offering of the 2026 Notes (as defined in Note 10, Credit Arrangements), together with the proceeds from the incurrence of a new term loan under the Company's existing Credit Agreement (as defined in Note 10, Credit Arrangements) and cash on hand. Acquisitions On October 26, 2017, the Company completed the purchase of substantially all of the assets of MMFX Technologies Corporation ("MMFX"). MMFX markets, sells, and licenses the production of proprietary specialty steel products. The operating results of MMFX are included in the Americas Mills reporting segment. This acquisition was not material to the Company's financial position or results of operations. On March 6, 2017, the Company completed the purchase of certain assets from OmniSource Corporation, a wholly-owned subsidiary of Steel Dynamics, Inc., consisting of seven recycling facilities located in the southeast United States (the "Recycling Assets"), which are in close proximity to the Company’s mini mill in Cayce, South Carolina. These facilities provide synergies with the Company's other operations in the region. The operating results of these facilities are included in the Americas Recycling reporting segment. On January 9, 2017, the Company completed the purchase of substantially all of the assets of Associated Steel Workers, Limited ("ASW"), a steel fabrication facility in Kapolei, Hawaii. This acquisition continues the vertical integration model of the Company by extending its geographic reach, establishing a fabrication operation in Hawaii and expanding its presence in the Hawaiian market. The operating results of this facility are included in the Americas Fabrication reporting segment. On December 12, 2016, the Company completed the purchase of substantially all of the assets of Continental Concrete Structures, Inc. ("CCS"), a fabricator of post-tensioning cable and related products for commercial and public construction projects with a facility in Alpharetta, Georgia. In addition, CCS provides professional design and value engineering services to the construction industry throughout North America. This acquisition complements the Company’s current rebar fabrication business and continues its strategy of creating value for customers. The operating results of this facility are included in the Americas Fabrication reporting segment. For the year ended August 31, 2017, the acquisitions of CCS, ASW and the Recycling Assets were not material, individually or in the aggregate, to the Company's financial position or results of operations; therefore, pro forma operating results for the acquisitions are not presented since the results would not be significantly different than reported results. The Company did not have any business acquisitions for the year ended August 31, 2016. Dispositions During the third quarter of fiscal 2018, the Company sold substantially all of the assets of its structural steel fabrication operations, which were part of the Americas Fabrication segment. The disposition did not meet the criteria for discontinued operations. Proceeds associated with the sale were $20.3 million, subject to customary post-closing adjustments. As a result of the disposition, the Company recognized impairment charges of $13.7 million during fiscal 2018. Discontinued Operations On June 13, 2017, the Company announced a plan to exit its International Marketing and Distribution segment, including its trading operations in the U.S., Asia, and Australia. As an initial step in this plan, on August 31, 2017, the Company completed the sale of its raw materials business, CMC Cometals. Additionally, during the second quarter of fiscal 2018, the remaining operations related to the Company's steel trading businesses in the U.S. and Asia were substantially wound down. Finally, during the third quarter of fiscal 2018, the Company sold certain assets and liabilities of its Australian steel trading business, resulting in an overall transaction loss, including selling costs, of $5.3 million. This loss was primarily due to impairment charges related to accumulated foreign currency translation, $4.2 million of which the Company recorded during fiscal 2017. The results of these activities are included in discontinued operations in the consolidated statements of earnings for all periods presented. With the conclusion of operations in this segment, any activities carried out within the segment are no longer of ongoing significance; accordingly, segment data with respect to International Marketing and Distribution activities is no longer reported. See Note 21, Business Segments, for further discussion of the exit of the International Marketing and Distribution segment. The major classes of line items constituting earnings (loss) from discontinued operations in the consolidated statements of earnings are presented in the table below.
|  | Year Ended August 31,
(in thousands) |  | 2018 |  | 2017 |  | 2016
Net sales |  | $ | 304,650 |  |  | $ | 1,155,046 |  |  | $ | 1,055,872 |
Costs and expenses: |  |  |  |  |  |
Cost of goods sold |  | 276,184 |  |  | 1,089,837 |  |  | 991,076 |
Selling, general and administrative expenses |  | 25,317 |  |  | 75,153 |  |  | 74,274 |
Interest expense |  | (86 | ) |  | (104 | ) |  | (742 | )
Earnings (loss) before income taxes |  | 3,235 |  |  | (9,840 | ) |  | (8,736 | )
Income taxes (benefit) |  | (34 | ) |  | (5,997 | ) |  | (1,497 | )
Earnings (loss) from discontinued operations |  | $ | 3,269 |  |  | $ | (3,843 | ) |  | $ | (7,239 | )
Material non-cash operating and investing activities related to discontinued operations include the following: inventory write-downs were $1.2 million, $20.7 million and $8.0 million for fiscal 2018, 2017, and 2016, respectively; provision for losses on receivables of $5.1 million in fiscal 2017; and stock-based compensation of $4.4 million in fiscal 2016. There were no other material non-cash operating or investing items related to discontinued operations for the periods ended August 31, 2018, 2017 and 2016. Businesses Held for Sale The assets and liabilities of businesses classified as held for sale and discontinued operations were immaterial at August 31, 2018. As a result of the exit of the International Marketing and Distribution segment and the sale of the Company's structural steel fabrication operations, the assets and liabilities related to such operations have been classified as assets and liabilities of businesses held for sale and discontinued operations at August 31, 2017 on the Company’s consolidated balance sheet, and consisted of the following:
|  | Year Ended August 31, 2017
(in thousands) |  | Businesses Held for Sale* |  | Discontinued Operations |  | Total
Assets: |  |  |  |  |  |
Accounts receivable |  | $ | 38,279 |  |  | $ | 106,905 |  |  | $ | 145,184 |
Inventories |  | 10,676 |  |  | 141,135 |  |  | 151,811 |
Other current assets |  | 77 |  |  | 38 |  |  | 115 |
Assets of businesses held for sale and discontinued operations |  | 49,032 |  |  | 248,078 |  |  | 297,110 |
Liabilities: |  |  |  |  |  |
Accounts payable-trade |  | $ | 13,108 |  |  | $ | 42,563 |  |  | $ | 55,671 |
Accrued expenses and other payables |  | 16,785 |  |  | 15,372 |  |  | 32,157 |
Liabilities of businesses held for sale and discontinued operations |  | $ | 29,893 |  |  | $ | 57,935 |  |  | $ | 87,828 |
* At August 31, 2017, $8.8 million of property, plant, and equipment, net of accumulated depreciation and amortization, was included in other noncurrent assets on the consolidated balance sheets.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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