Note 13 - Segments

6 Months Ended

May 29, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 13: 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. Revenue and operating income 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. Segment operating income is identified as gross profit less SG&A expenses. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of SAP ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs.

We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives. The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a "where-used" basis as financial performance is assessed at the total operating segment level.

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

	Three Months Ended
	May 29, 2021					May 30, 2020
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	364,814	$	38,929		$	344,673	$	35,009
Engineering Adhesives		345,373		32,075			236,063		20,149
Construction Adhesives		117,686		6,338			93,866		6,527
Total segment	$	827,873	$	77,342		$	674,602	$	61,685
Corporate Unallocated		-		(8,201	)		-		(4,782	)
Total	$	827,873	$	69,141		$	674,602	$	56,903

	Six Months Ended
	May 29, 2021					May 30, 2020
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	700,482	$	68,840		$	657,185	$	57,673
Engineering Adhesives		658,037		62,493			484,958		35,514
Construction Adhesives		195,258		1,635			179,023		5,152
Total segment	$	1,553,777	$	132,968		$	1,321,166	$	98,339
Corporate Unallocated		-		(15,477	)		-		(12,683	)
Total	$	1,553,777	$	117,491		$	1,321,166	$	85,656

Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include charges that are not allocated to the Company’s reportable segments. 

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

	Three Months Ended						Six Months Ended
	May 29,			May 30,			May 29,			May 30,
	2021			2020			2021			2020
Operating income	$	69,141		$	56,903		$	117,491		$	85,656
Other income, net		11,879			3,049			19,748			8,018
Interest expense		(19,942	)		(21,644	)		(40,303	)		(44,401	)
Interest income		2,530			2,898			5,189			5,816
Income before income taxes and income from equity method investments	$	63,608		$	41,206		$	102,125		$	55,089

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

	Three Months Ended May 29, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	201,458	$	126,450	$	103,996	$	431,904
EIMEA		108,310		121,585		6,506		236,401
Asia Pacific		55,046		97,338		7,184		159,568
Total	$	364,814	$	345,373	$	117,686	$	827,873

	Three Months Ended May 30, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	190,581	$	90,012	$	84,047	$	364,640
EIMEA		98,222		71,643		4,506		174,371
Asia Pacific		55,870		74,408		5,313		135,591
Total	$	344,673	$	236,063	$	93,866	$	674,602

	Six Months Ended May 29, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	383,479	$	239,577	$	171,028	$	794,084
EIMEA		204,283		223,344		11,233		438,860
Asia Pacific		112,720		195,116		12,997		320,833
Total	$	700,482	$	658,037	$	195,258	$	1,553,777

	Six Months Ended May 30, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	363,855	$	195,385	$	158,306	$	717,546
EIMEA		190,606		155,318		10,631		356,555
Asia Pacific		102,724		134,255		10,086		247,065
Total	$	657,185	$	484,958	$	179,023	$	1,321,166