Note

Revenue

Revenue Recognition

We sell a variety of adhesives, sealants and other specialty chemical products to a diverse customer base. The vast majority of our arrangements contain a single performance obligation to transfer manufactured goods to the customer as governed by an individual purchase order.

We recognize revenue at the amount of consideration to which we expect to be entitled in exchange for transferring the promised goods to the customer. The transaction price includes an estimation of any variable amounts of consideration to which we will be entitled. The most common forms of variable consideration within our arrangements are customer rebates, which are recorded as a reduction to revenue at the time of the initial sale using the expected value method. The expected value method is the sum of probability-weighted amounts in a range of possible consideration amounts and is based on a consideration of historical, current and forecast information. Changes in estimates are updated each reporting period. There are

material instances where variable consideration is constrained and

not

recorded at the initial time of sale. Product returns are recorded as a reduction to revenue based on historical experience and anticipated sales returns that occur in the normal course of business. We primarily have assurance-type warranties that do

not

result in separate performance obligations. We have elected to present revenue net of sales taxes and other similar taxes.

We recognize revenue when control of goods is transferred to the customer. For the vast majority of our arrangements, control transfers at a point in time either upon shipment or upon delivery of the goods to the customer. The timing of transfer of control is determined considering the timing of the transfer of legal title, physical possession, and risks and rewards of goods to the customer.

We record shipping and handling revenue in net revenues and outbound shipping and handling costs in cost of goods sold. The majority of our shipping and handling activities are performed prior to transfer of control of the goods to the customer. For those arrangements where we provide shipping and handling services after control of the goods has transferred to the customer, we have elected the practical expedient allowed under ASC

606

to account for these activities as a fulfillment cost rather than as a separate performance obligation. Election of this practical expedient resulted in an increase in the balance of retained earnings of

$1,776

at the beginning of fiscal

2019.

Based on an analysis of the financial statement line items affected in the application of ASU

No.

2014

as compared with previous reporting, the Company has determined that the quantitative changes to each financial statement line item are

not

material. As a result, for the

three

and

six

months ended

June 1, 2019,

the Company is

not

disclosing the quantitative amount by which each financial statement line item is affected in the current reporting by the application of this ASU as compared with the guidance that was in effect before the change.

Practical Expedients Elected

We have elected the following practical expedients allowable under ASC

606:

Election to present revenue net of sales taxes and other similar taxes

Election to account for shipping and handling services performed after control has transferred to the customer as fulfillment activities

Disaggregated Revenue Information

We view the following disaggregation of revenue by product type as useful to understanding the composition of revenue recognized during the respective reporting periods:

	Three Months Ended June 1, 2019

	Americas				Asia		Construction		Engineering
	Adhesives		EIMEA		Pacific		Adhesives		Adhesives		Total

Durable assembly	$	68,516	$	65,607	$	18,667	$	-	$	-	$	152,790
Hygiene		31,196		42,436		28,641		-		-		102,273
Packaging		72,903		34,389		14,334		-		-		121,626
Paper and other		87,167		23,021		9,557		-		-		119,745
Construction		-		-		-		111,244		-		111,244
Engineering		-		-		-		-		151,905		151,905
	$	259,782	$	165,453	$	71,199	$	111,244	$	151,905	$	759,583

	Three Months Ended June 2, 2018

	Americas				Asia		Construction		Engineering
	Adhesives		EIMEA		Pacific		Adhesives		Adhesives		Total

Durable assembly	$	76,183	$	72,388	$	18,151	$	-	$	-	$	166,722
Hygiene		30,065		47,646		30,427		-		-		108,138
Packaging		72,014		36,746		14,177		-		-		122,937
Paper and other		87,970		25,395		11,666		-		-		125,031
Construction		-		-		-		122,891		-		122,891
Engineering		-		-		-		-		143,668		143,668
	$	266,232	$	182,175	$	74,421	$	122,891	$	143,668	$	789,387

	Six Months Ended June 1, 2019

	Americas				Asia		Construction		Engineering
	Adhesives		EIMEA		Pacific		Adhesives		Adhesives		Total

Durable assembly	$	129,844	$	126,789	$	32,700	$	-	$	-	$	289,333
Hygiene		61,225		87,994		55,949		-		-		205,168
Packaging		142,305		63,509		27,128		-		-		232,942
Paper and other		168,358		43,674		18,810		-		-		230,842
Construction		-		-		-		193,700		-		193,700
Engineering		-		-		-		-		280,533		280,533
	$	501,732	$	321,966	$	134,587	$	193,700	$	280,533	$	1,432,518

	Six Months Ended June 2, 2018

	Americas				Asia		Construction		Engineering
	Adhesives		EIMEA		Pacific		Adhesives		Adhesives		Total

Durable assembly	$	142,717	$	137,287	$	33,348	$	-	$	-	$	313,352
Hygiene		61,194		96,818		58,583		-		-		216,595
Packaging		139,542		67,970		27,301		-		-		234,813
Paper and other		173,742		49,078		21,798		-		-		244,618
Construction		-		-		-		221,148		-		221,148
Engineering		-		-		-		-		271,940		271,940
	$	517,195	$	351,153	$	141,030	$	221,148	$	271,940	$	1,502,466