Segment Information

3 Months Ended

Apr. 03, 2022

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company determines that an operating segment exists if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has operating results that are regularly reviewed by the chief operating decision maker (“CODM”) and (iii) has discrete financial information. Additionally, accounting standards require the utilization of a “management approach” to report the financial results of operating segments, which is based on information used by the CODM to assess performance and make operating and resource allocation decisions. The Company determined that it has two operating segments organized by geographical area – namely (a) Americas (“AMS”) and (b) Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment includes the United States, Canada and Latin America geographic areas.

Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”), which includes allocations of corporate selling, general and administrative expenses. AOI excludes nora purchase accounting amortization, Thailand plant closure inventory write-down, and restructuring charges, asset impairment, severance and other charges. Intersegment revenues for the three months ended April 3, 2022 and April 4, 2021 were $17.3 million and $15.7 million, respectively. Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.

The Company has determined that it has two reportable segments – AMS and EAAA, as each operating segment meets the quantitative thresholds defined in the accounting guidance.

Segment information for the three months ended April 3, 2022 and April 4, 2021 is presented in the following table:

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
Net sales
AMS	$	156,509	$	126,967
EAAA	131,493		126,293
Total net sales	$	288,002	$	253,260
Segment AOI
AMS	$	21,138	$	11,913
EAAA	9,504		8,011
Depreciation and amortization
AMS	$	4,058	$	4,723
EAAA	6,612		7,211
Total depreciation and amortization	$	10,670	$	11,934

A reconciliation of the Company’s total operating segment assets to the corresponding consolidated amounts follows:

	April 3, 2022		January 2, 2022
	(in thousands)
Assets
AMS	$	546,993	$	652,423
EAAA	687,535		691,844
Total segment assets	1,234,528		1,344,267
Corporate assets	132,386		146,204
Eliminations	(57,129)		(160,414)
Total reported assets	$	1,309,785	$	1,330,057

Reconciliations of operating income to income before income tax expense and segment AOI are presented as follows:

	Three Months Ended
	April 3, 2022		April 4, 2021
	(in thousands)
AMS operating income	$	21,250	$	11,647
EAAA operating income	6,170		5,219
Consolidated operating income	27,420		16,866
Interest expense	6,850		7,256
Other expense, net	170		715
Income before income tax expense	$	20,400	$	8,895

	Three Months Ended April 3, 2022				Three Months Ended April 4, 2021
	AMS		EAAA		AMS		EAAA
	(in thousands)
Operating income	$	21,250	$	6,170	$	11,647	$	5,219
Purchase accounting amortization	—		1,342		—		1,421
Thailand plant closure inventory write-down	—		1,115		—		—
Restructuring, asset impairment, severance and other charges	(112)		877		266		1,371
AOI	$	21,138	$	9,504	$	11,913	$	8,011