Note 13 - Segments

3 Months Ended

Mar. 02, 2024

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 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
	March 2, 2024					March 4, 2023
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	367,693	$	46,877		$	383,528	$	45,146
Engineering Adhesives		328,766		34,834			333,067		32,475
Construction Adhesives		113,960		(2,619	)		92,588		(9,634	)
Total segment	$	810,419	$	79,092		$	809,183	$	67,987
Corporate Unallocated1		-		(12,217	)		-		(7,720	)
Total	$	810,419	$	66,875		$	809,183	$	60,267

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
	March 2,			March 4,
	2024			2023
Operating income	$	66,875		$	60,267
Other income, net		1,501			2,604
Interest expense		(31,901	)		(33,069	)
Interest income		1,307			667
Income before income taxes and income from equity method investments	$	37,782		$	30,469

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 March 2, 2024
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	216,306	$	133,051	$	82,532	$	431,889
EIMEA		103,889		105,132		24,985		234,006
Asia Pacific		47,498		90,583		6,443		144,524
Total	$	367,693	$	328,766	$	113,960	$	810,419

	Three Months Ended March 4, 2023
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	223,618	$	133,470	$	70,964	$	428,052
EIMEA		107,072		113,360		14,578		235,010
Asia Pacific		52,838		86,237		7,046		146,121
Total	$	383,528	$	333,067	$	92,588	$	809,183