Segment Information

3 Months Ended

Aug. 31, 2023

Segment Reporting [Abstract]

Segment Information

NOTE 15 — SEGMENT INFORMATION

We operate a portfolio of businesses and product lines that manufacture and sell a variety of specialty paints, protective coatings, roofing systems, flooring solutions, sealants, cleaners and adhesives. We manage our portfolio by organizing our businesses and product lines into four reportable segments as outlined below, which also represent our operating segments. Within each operating segment, we manage product lines and businesses which generally address common markets, share similar economic characteristics, utilize similar technologies and can share manufacturing or distribution capabilities. Our four operating segments represent components of our business for which separate financial information is available that is utilized on a regular basis by our chief operating decision maker in determining how to allocate the assets of the company and evaluate performance. These four operating segments are each managed by an operating segment manager, who is responsible for the day-to-day operating decisions and performance evaluation of the operating segment’s underlying businesses. We evaluate the profit performance of our segments primarily based on income before income taxes, but also look to earnings (loss) before interest and taxes (“EBIT”), as a performance evaluation measure because interest (income) expense, net is essentially related to corporate functions, as opposed to segment operations.

Effective June 1, 2023, certain Asia Pacific businesses and management structure, formerly of our CPG segment, were transferred to our PCG segment to create operating efficiencies and a more unified go-to-market strategy in Asia Pacific. As a result of this business realignment, $11.4 million of goodwill was transferred from the CPG segment to the PCG segment. Additionally, this realignment is reflected in our reportable segments beginning with our first quarter of fiscal 2024. As such, historical segment results have been recast to reflect the impact of this change.

Our CPG reportable segment products are sold throughout North America and also account for a significant portion of our international sales. Our construction product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. Products and services within this reportable segment include construction sealants and adhesives, coatings and chemicals, roofing systems, concrete admixture and repair products, building envelope solutions, insulated cladding, flooring systems, and weatherproofing solutions.

Our PCG reportable segment products are sold throughout North America, as well as internationally, and are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. Products and services within this reportable segment include high-performance flooring solutions, corrosion control and fireproofing coatings, infrastructure repair systems and fiberglass reinforced plastic gratings.

Our Consumer reportable segment manufactures and markets professional use and do-it-yourself (“DIY”) products for a variety of mainly consumer applications, including home improvement and personal leisure activities. Our Consumer reportable segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe, Australia and South America. Our Consumer reportable segment products are primarily sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops and through distributors. The Consumer reportable segment offers products that include specialty, hobby and professional paints; caulks; adhesives; cleaners; sandpaper and other abrasives; silicone sealants and wood stains.

Our SPG reportable segment products are sold throughout North America and internationally, primarily in Europe. Our specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The SPG reportable segment offers products that include industrial cleaners, restoration services equipment, colorants, nail enamels, exterior finishes, edible coatings and specialty glazes for pharmaceutical and food industries, and other specialty original equipment manufacturer (“OEM”) coatings.

In addition to our four reportable segments, there is a category of certain business activities and expenses, referred to as corporate/other, that does not constitute an operating segment. This category includes our corporate headquarters and related administrative expenses, results of our captive insurance companies, gains or losses on the sales of certain assets and other expenses not directly associated with any reportable segment. Assets related to the corporate/other category consist primarily of investments, prepaid expenses and headquarters’ property and equipment. These corporate and other assets and expenses reconcile reportable segment data to total consolidated income before income taxes and identifiable assets.

We reflect income from our joint ventures on the equity method and receive royalties from our licensees.

The following tables present a disaggregation of revenues by geography, and the results of our reportable segments consistent with our management philosophy, by representing the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses.

Three Months Ended August 31, 2023	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	509,331	$	226,327	$	550,753	$	153,764	$	1,440,175
Foreign
Canada		79,161		24,246		46,340		1,129		150,876
Europe		127,957		63,671		60,866		20,476		272,970
Latin America		66,340		9,141		7,015		614		83,110
Asia Pacific		-		29,333		4,630		4,968		38,931
Other Foreign		-		25,795		-		-		25,795
Total Foreign		273,458		152,186		118,851		27,187		571,682
Total	$	782,789	$	378,513	$	669,604	$	180,951	$	2,011,857
Three Months Ended August 31, 2022	CPG Segment		PCG Segment		Consumer Segment		SPG Segment		Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	463,408	$	223,669	$	550,619	$	172,863	$	1,410,559
Foreign
Canada		70,138		22,663		44,250		986		138,037
Europe		117,195		56,708		53,618		22,125		249,646
Latin America		55,672		9,482		6,186		406		71,746
Asia Pacific		-		29,053		4,819		6,317		40,189
Other Foreign		-		22,143		-		-		22,143
Total Foreign		243,005		140,049		108,873		29,834		521,761
Total	$	706,413	$	363,718	$	659,492	$	202,697	$	1,932,320

	Three Months Ended
(In thousands)	August 31,			August 31,
Income (Loss) Before Income Taxes	2023			2022
CPG Segment	$	140,452		$	106,755
PCG Segment		44,821			49,401
Consumer Segment		131,829			116,689
SPG Segment		16,397			27,885
Corporate/Other		(64,345	)		(75,609	)
Consolidated	$	269,154		$	225,121

(In thousands)	August 31,		May 31,
Identifiable Assets	2023		2023
CPG Segment	$	2,155,506	$	2,206,403
PCG Segment		1,212,640		1,209,819
Consumer Segment		2,332,040		2,384,782
SPG Segment		784,722		804,762
Corporate/Other		230,369		176,238
Consolidated	$	6,715,277	$	6,782,004