Note 18—Segments

The Company operates its business along three operating segments, which are grouped on the basis of geography: North America, Europe and Asia. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated. The three segments consist of similar operating activities as each segment produces similar products.

The Company, including its Chief Operating Decision Maker, evaluates performance based on several factors, of which the primary financial measure is Adjusted EBITDA. Adjusted EBITDA is defined as segment net income before income taxes, interest, depreciation, amortization, restructuring, transaction, stock-based compensation and certain other costs that do not relate to the segment’s ongoing operations. A reconciliation of Adjusted EBITDA to consolidated net income is provided in the tables below. Inter-segment sales and transfers, which were not material, are accounted for as if the sales or transfers were to third parties, at current market prices.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Net Sales
North America	$	185,456	$	193,866	$	556,165	$	610,843
Europe		175,128		184,492		551,908		606,876
Asia		22,049		20,826		68,511		69,873
Total Net Sales	$	382,633	$	399,184	$	1,176,584	$	1,287,592

Depreciation and Amortization
North America	$	14,173	$	15,258	$	42,812	$	45,462
Europe		13,344		15,261		41,035		49,000
Asia		725		933		2,538		3,028
Total Depreciation and Amortization	$	28,242	$	31,452	$	86,385	$	97,490

Operating Income
North America	$	6,195	$	11,945	$	25,007	$	21,242
Europe		9,319		12,303		36,957		42,846
Asia		3,562		1,765		9,753		9,727
Total Operating Income	$	19,076	$	26,013	$	71,717	$	73,815

Adjusted EBITDA
North America	$	24,263	$	26,581	$	75,691	$	88,382
Europe		24,264		29,063		82,358		103,423
Asia		4,331		2,707		12,406		13,148
Total Adjusted EBITDA	$	52,858	$	58,351	$	170,455	$	204,953


	Nine Months Ended
	March 31,
	2017		2016
Capital Expenditures
North America	$	15,152	$	12,867
Europe		25,087		18,846
Asia		1,157		5,006
Total Capital Expenditures	$	41,396	$	36,719


	As of March 31,		As of June 30,
	2017		2016
Total Assets
North America	$	765,181	$	754,418
Europe		834,808		883,361
Asia		69,729		69,811
Total Assets	$	1,669,718	$	1,707,590

The Company’s product offerings consist of print-based specialty packaging products across the consumer, healthcare and multi-media end markets. The Company produces similar products including labels, cartons, inserts and rigid packaging (the “Specific Products”) in all of the geographies it serves, and in all of the end markets it serves. These Specific Products represent one product line. The nature of a specific carton, label, insert or rigid package is similar from end market to end market and geography to geography. Oftentimes, the Specific Products sold to the customer are bundled, including both label and carton, or label, carton and insert or any combination thereof. The following are summaries of gross sales estimated by product category and of net sales estimated by end markets for the respective periods:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Premium Folding Cartons	$	245,953	$	257,827	$	767,581	$	842,704
Inserts		55,996		56,274		172,237		183,361
Labels		38,087		36,216		106,128		101,865
Rigid Packaging		20,840		23,181		81,083		89,104
Other Consumer Products		48,775		57,576		133,101		167,716
Total		409,651		431,074		1,260,130		1,384,750
Sales Reserves and Eliminations		(27,018)		(31,890)		(83,546)		(97,158)
Total Net Sales	$	382,633	$	399,184	$	1,176,584	$	1,287,592

Consumer	$	194,335	$	199,578	$	602,297	$	659,664
Healthcare		160,709		166,791		459,020		474,604
Multi-Media		27,589		32,815		115,267		153,324
Total Net Sales	$	382,633	$	399,184	$	1,176,584	$	1,287,592

The following is a reconciliation of EBITDA and Adjusted EBITDA to consolidated net income.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2017		2016		2017		2016
Consolidated net income (loss)	$	10,281	$	3,613	$	21,620	$	8,693
Depreciation and amortization		28,242		31,452		86,385		97,490
Interest expense		11,927		14,896		39,472		49,641
Income tax expense (benefit)		(1,234)		6,178		1,861		6,753
EBITDA		49,216		56,139		149,338		162,577

Transaction costs		2,655		371		3,477		2,785
Stock based and deferred compensation		726		104		2,260		27,064
Debt extinguishment charges		—		64		16,569		3,931
Purchase accounting adjustments		372		255		722		878
Restructuring related costs		4,254		693		10,907		4,269
(Gain) loss on sale of fixed assets		(1,471)		236		(2,454)		598
Foreign currency (gains) losses		(1,355)		510		(6,070)		3,850
Other adjustments to EBITDA		(1,539)		(21)		(4,294)		(999)

Adjusted EBITDA	$	52,858	$	58,351	$	170,455	$	204,953