Note 15 - Segments

6 Months Ended

Jun. 01, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 15: 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
	June 1, 2024					June 3, 2023
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	393,111	$	50,488		$	404,486	$	51,592
Engineering Adhesives		373,518		51,822			364,080		44,400
Construction Adhesives		150,478		10,418			129,673		5,969
Total segment	$	917,107	$	112,728		$	898,239	$	101,961
Corporate Unallocated1		-		(12,132	)		-		(11,811	)
Total	$	917,107	$	100,596		$	898,239	$	90,150

	Six Months Ended
	June 1, 2024					June 3, 2023
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	760,804	$	97,366		$	788,014	$	96,738
Engineering Adhesives		702,283		86,655			697,147		76,875
Construction Adhesives		264,438		7,799			222,260		(3,664	)
Total segment	$	1,727,525	$	191,820		$	1,707,421	$	169,949
Corporate Unallocated		-		(24,349	)		-		(19,533	)
Total	$	1,727,525	$	167,471		$	1,707,421	$	150,416

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
	June 1,			June 3,			June 1,			June 3,
	2024			2023			2024			2023
Operating income	$	100,596		$	90,150		$	167,471		$	150,416
Other income, net		3,634			605			5,135			3,209
Interest expense		(32,314	)		(33,131	)		(64,216	)		(66,200	)
Interest income		1,199			932			2,506			1,599
Income before income taxes and income from equity method investments	$	73,115		$	58,556		$	110,896		$	89,024

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 June 1, 2024
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	227,068	$	159,216	$	112,284	$	498,568
EIMEA		112,631		116,468		29,523		258,622
Asia Pacific		53,412		97,834		8,671		159,917
Total	$	393,111	$	373,518	$	150,478	$	917,107

	Three Months Ended June 3, 2023
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	237,325	$	149,239	$	101,642	$	488,206
EIMEA		114,723		119,199		19,917		253,839
Asia Pacific		52,438		95,642		8,114		156,194
Total	$	404,486	$	364,080	$	129,673	$	898,239

	Six Months Ended June 1, 2024
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	443,374	$	292,267	$	194,816	$	930,457
EIMEA		216,520		221,599		54,508		492,627
Asia Pacific		100,910		188,417		15,114		304,441
Total	$	760,804	$	702,283	$	264,438	$	1,727,525

	Six Months Ended June 3, 2023
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	460,944	$	282,709	$	172,606	$	916,259
EIMEA		221,794		232,559		34,495		488,848
Asia Pacific		105,276		181,879		15,159		302,314
Total	$	788,014	$	697,147	$	222,260	$	1,707,421