Note 15 - Segments

9 Months Ended

Aug. 31, 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
	August 31, 2024					September 2, 2023
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	389,854	$	49,782		$	402,388	$	52,737
Engineering Adhesives		374,923		52,865			365,862		52,931
Construction Adhesives		153,150		12,543			132,384		5,853
Total segment	$	917,927	$	115,190		$	900,634	$	111,521
Corporate Unallocated		-		(10,849	)		-		(20,202	)
Total	$	917,927	$	104,341		$	900,634	$	91,319

	Nine Months Ended
	August 31, 2024					September 2, 2023
	Net		Operating			Net		Operating
	Revenue		Income (Loss)			Revenue		Income (Loss)
Hygiene, Health and Consumable Adhesives	$	1,150,658	$	147,147		$	1,190,402	$	149,474
Engineering Adhesives		1,077,206		139,522			1,063,009		129,806
Construction Adhesives		417,588		20,342			354,644		2,189
Total segment	$	2,645,452	$	307,011		$	2,608,055	$	281,469
Corporate Unallocated		-		(35,198	)		-		(39,734	)
Total	$	2,645,452	$	271,813		$	2,608,055	$	241,735

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
	August 31,			September 2,			August 31,			September 2,
	2024			2023			2024			2023
Operating income	$	104,341		$	91,319		$	271,813		$	241,735
Other income, net		2,148			1,555			7,282			4,764
Interest expense		(35,288	)		(35,105	)		(99,504	)		(101,305	)
Interest income		1,092			1,128			3,597			2,726
Income before income taxes and income from equity method investments	$	72,293		$	58,897		$	183,188		$	147,920

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 August 31, 2024
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	222,605	$	164,343	$	115,464	$	502,412
EIMEA		115,960		109,742		29,387		255,089
Asia Pacific		51,289		100,838		8,299		160,426
Total	$	389,854	$	374,923	$	153,150	$	917,927

	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

	Nine Months Ended August 31, 2024
	Hygiene, Health
	and Consumable		Engineering		Construction
	Adhesives		Adhesives		Adhesives		Total
Americas	$	665,979	$	456,610	$	310,280	$	1,432,869
EIMEA		332,480		331,341		83,895		747,716
Asia Pacific		152,199		289,255		23,413		464,867
Total	$	1,150,658	$	1,077,206	$	417,588	$	2,645,452

	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