Note 14 - Segments

9 Months Ended

Sep. 02, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 14: 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 implementing a global Enterprise Resource Planning (“ERP”) system that we refer to as 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
	September 2, 2023					August 27, 2022
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	402,388	$	52,737		$	424,978	$	47,470
Engineering Adhesives		365,862		52,931			378,264		39,776
Construction Adhesives		132,384		5,853			137,988		6,391
Total segment	$	900,634	$	111,521		$	941,230	$	93,637
Corporate Unallocated1		-		(20,202	)		-		(5,683	)
Total	$	900,634	$	91,319		$	941,230	$	87,954

	Nine Months Ended
	September 2, 2023					August 27, 2022
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	1,190,402	$	149,474		$	1,252,405	$	122,950
Engineering Adhesives		1,063,009		129,806			1,137,587		115,266
Construction Adhesives		354,644		2,189			400,977		22,032
Total segment	$	2,608,055	$	281,469		$	2,790,969	$	260,248
Corporate Unallocated		-		(39,734	)		-		(27,780	)
Total	$	2,608,055	$	241,735		$	2,790,969	$	232,468

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						Nine Months Ended
	September 2,			August 27,			September 2,			August 27,
	2023			2022			2023			2022
Operating income	$	91,319		$	87,954		$	241,735		$	232,468
Other income, net		1,555			6,559			4,764			12,701
Interest expense		(35,105	)		(23,450	)		(101,305	)		(61,475	)
Interest income		1,128			2,139			2,726			6,170
Income before income taxes and income from equity method investments	$	58,897		$	73,202		$	147,920		$	189,864

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 September 2, 2023
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	227,947	$	147,115	$	100,510	$	475,572
EIMEA		127,080		109,151		23,443		259,674
Asia Pacific		47,361		109,596		8,431		165,388
Total	$	402,388	$	365,862	$	132,384	$	900,634

	Three Months Ended August 27, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	261,751	$	165,398	$	106,169	$	533,318
EIMEA		114,186		111,734		23,519		249,439
Asia Pacific		49,041		101,132		8,300		158,473
Total	$	424,978	$	378,264	$	137,988	$	941,230

	Nine Months Ended September 2, 2023
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	688,890	$	429,824	$	273,116	$	1,391,830
EIMEA		348,876		341,710		57,938		748,524
Asia Pacific		152,636		291,475		23,590		467,701
Total	$	1,190,402	$	1,063,009	$	354,644	$	2,608,055

	Nine Months Ended August 27, 2022
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	737,689	$	465,285	$	321,167	$	1,524,141
EIMEA		351,983		361,485		58,450		771,918
Asia Pacific		162,733		310,817		21,360		494,910
Total	$	1,252,405	$	1,137,587	$	400,977	$	2,790,969