Note 16 - Operating Segments

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 16: Operating Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. For segment evaluation by the chief operating decision maker, segment operating income is identified as gross profit less SG&A expenses. Corporate assets are not allocated to the operating segments. Operating results of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance.

As of November 30, 2019, we had five reportable segments: Americas Adhesives, EIMEA, Asia Pacific, Construction Adhesives and Engineering Adhesives. As of the beginning of fiscal 2020, we realigned our operating segment structure and now have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The change in operating segments is based on how we have organized the company to make operating decisions and assess business performance. Prior period segment information has been recast retrospectively to reflect the realignment.

The table below provides certain information regarding net revenue and segment operating income for each of our operating segments.

	Three Months Ended
	February 29, 2020					March 2, 2019
			Segment					Segment
	Trade		Operating			Trade		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	312,512	$	22,664		$	319,854	$	20,890
Engineering Adhesives		248,895		15,365			264,372		21,986
Construction Adhesives		85,157		(1,373	)		82,790		(1,656	)
Total segment		646,564		36,656			667,016		41,220
Corporate Unallocated		-		(7,903	)		5,919		(7,008	)
Total	$	646,564	$	28,753		$	672,935	$	34,212

Consistent with our internal management reporting, Corporate Unallocated amounts in the table above include charges that are not allocated to the Company’s reportable segments.  For the three months ended March 2, 2019, Corporate Unallocated also includes operating results related to our surfactants and thickeners business, which we divested during the third quarter of 2019.

The table below provides a reconciliation of segment operating income to income before income taxes and income from equity method investments:

	Three Months Ended
	February 29,			March 2,
	2020			2019
Operating income	$	28,753		$	34,212
Other income, net		4,969			3,365
Interest expense		(22,757	)		(26,807	)
Interest income		2,918			3,053
Income before income taxes and income from equity method investments	$	13,883		$	13,823

The table below provides total assets of each of our operating segments as of November 30, 2019:

Total assets	November 30, 2019
Hygiene, Health and Consumable Adhesives	$	1,253,864
Engineering Adhesives		1,610,748
Construction Adhesives		799,995
Corporate		321,127
Total	$	3,985,734

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

	Three Months Ended February 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	173,275	$	105,373	$	74,258	$	-	$	352,906
EIMEA		92,382		83,676		6,126		-		182,184
Asia Pacific		46,855		59,846		4,773		-		111,474
	$	312,512	$	248,895	$	85,157	$	-	$	646,564

	Three Months Ended March 2, 2019
	Hygiene, Health
	and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	174,865	$	105,621	$	72,346	$	5,919	$	358,751
EIMEA		95,428		93,800		4,881		-		194,109
Asia Pacific		49,561		64,951		5,563		-		120,075
	$	319,854	$	264,372	$	82,790	$	5,919	$	672,935