Note 13 - Segments

3 Months Ended

Feb. 26, 2022

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 Project 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
	February 26, 2022					February 27, 2021
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	389,538	$	32,213		$	335,669	$	29,912
Engineering Adhesives		353,977		32,572			312,663		30,417
Construction Adhesives		112,967		4,356			77,572		(4,703	)
Total segment	$	856,482	$	69,141		$	725,904	$	55,626
Corporate Unallocated1		-		(12,142	)		-		(7,276	)
Total	$	856,482	$	56,999		$	725,904	$	48,350

¹ 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
	February 26,			February 27,
	2022			2021
Operating income	$	56,999		$	48,350
Other income, net		6,142			7,869
Interest expense		(18,196	)		(20,361	)
Interest income		1,940			2,659
Income before income taxes and income from equity method investments	$	46,885		$	38,517

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 February 26, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	220,694	$	133,328	$	95,578	$	449,600
EIMEA		114,653		115,820		11,217		241,690
Asia Pacific		54,191		104,829		6,172		165,192
Total	$	389,538	$	353,977	$	112,967	$	856,482

	Three Months Ended February 27, 2021
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	182,022	$	113,126	$	67,032	$	362,180
EIMEA		95,973		101,759		4,727		202,459
Asia Pacific		57,674		97,778		5,813		161,265
Total	$	335,669	$	312,663	$	77,572	$	725,904