Note 13 - Segments

9 Months Ended

Aug. 28, 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
	August 28, 2021					August 29, 2020
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	369,439	$	29,652		$	320,187	$	31,883
Engineering Adhesives		342,300		34,087			276,083		29,873
Construction Adhesives		115,091		3,339			95,193		4,284
Total segment	$	826,830	$	67,078		$	691,463	$	66,040
Corporate Unallocated		-		(7,625	)		-		(7,309	)
Total	$	826,830	$	59,453		$	691,463	$	58,731

	Nine Months Ended
	August 28, 2021					August 29, 2020
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	1,069,922	$	98,493		$	977,373	$	89,556
Engineering Adhesives		1,000,337		96,580			761,040		65,386
Construction Adhesives		310,348		4,974			274,216		9,436
Total segment	$	2,380,607	$	200,047		$	2,012,629	$	164,378
Corporate Unallocated		-		(23,105	)		-		(19,991	)
Total	$	2,380,607	$	176,942		$	2,012,629	$	144,387

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						Nine Months Ended
	August 28,			August 29,			August 28,			August 29,
	2021			2020			2021			2020
Operating income	$	59,453		$	58,731		$	176,942		$	144,387
Other income, net		6,150			3,722			25,899			11,740
Interest expense		(19,396	)		(20,196	)		(59,699	)		(64,597	)
Interest income		2,520			2,945			7,709			8,761
Income before income taxes and income from equity method investments	$	48,727		$	45,202		$	150,851		$	100,291

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 August 28, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	210,589	$	127,683	$	103,475	$	441,747
EIMEA		108,626		121,905		4,958		235,489
Asia Pacific		50,224		92,712		6,658		149,594
Total	$	369,439	$	342,300	$	115,091	$	826,830

	Three Months Ended August 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	179,209	$	114,358	$	84,379	$	377,946
EIMEA		91,813		81,783		4,418		178,014
Asia Pacific		49,165		79,942		6,396		135,503
Total	$	320,187	$	276,083	$	95,193	$	691,463

	Nine Months Ended August 28, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	594,071	$	367,260	$	274,502	$	1,235,833
EIMEA		312,908		345,249		16,191		674,348
Asia Pacific		162,943		287,828		19,655		470,426
Total	$	1,069,922	$	1,000,337	$	310,348	$	2,380,607

	Nine Months Ended August 29, 2020
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	543,066	$	309,742	$	242,685	$	1,095,493
EIMEA		282,418		237,102		15,049		534,569
Asia Pacific		151,889		214,196		16,482		382,567
Total	$	977,373	$	761,040	$	274,216	$	2,012,629