Note 13 - Segments

6 Months Ended

May 28, 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
	May 28, 2022					May 29, 2021
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	437,889	$	43,267		$	364,814	$	38,929
Engineering Adhesives		405,346		42,917			345,373		32,075
Construction Adhesives		150,023		11,285			117,686		6,338
Total segment	$	993,258	$	97,469		$	827,873	$	77,342
Corporate Unallocated1		-		(9,955	)		-		(8,201	)
Total	$	993,258	$	87,514		$	827,873	$	69,141

	Six Months Ended
	May 28, 2022					May 29, 2021
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	827,427	$	75,480		$	700,482	$	68,840
Engineering Adhesives		759,323		75,489			658,037		62,493
Construction Adhesives		262,989		15,641			195,258		1,635
Total segment	$	1,849,739	$	166,610		$	1,553,777	$	132,968
Corporate Unallocated		-		(22,095	)		-		(15,477	)
Total	$	1,849,739	$	144,515		$	1,553,777	$	117,491

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						Six Months Ended
	May 28,			May 29,			May 28,			May 29,
	2022			2021			2022			2021
Operating income	$	87,514		$	69,141		$	144,515		$	117,491
Other income, net		-			11,879			6,142			19,748
Interest expense		(19,828	)		(19,942	)		(38,025	)		(40,303	)
Interest income		2,091			2,530			4,030			5,189
Income before income taxes and income from equity method investments	$	69,777		$	63,608		$	116,662		$	102,125

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 28, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	255,243	$	166,559	$	119,420	$	541,222
EIMEA		123,145		133,932		23,713		280,790
Asia Pacific		59,501		104,855		6,890		171,246
Total	$	437,889	$	405,346	$	150,023	$	993,258

	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

	Six Months Ended May 28, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	475,938	$	299,886	$	214,998	$	990,822
EIMEA		237,797		249,752		34,930		522,479
Asia Pacific		113,692		209,685		13,061		336,438
Total	$	827,427	$	759,323	$	262,989	$	1,849,739

	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