Segment Information

9 Months Ended

Oct. 01, 2023

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, Cyber Event impact, and restructuring, asset impairment, severance, and other, net. Intersegment revenues for the three and nine months ended October 1, 2023, were $25.0 million and $72.3 million, respectively, and intersegment revenues for the three and nine months ended October 2, 2022, were $19.7 million and $56.4 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 and nine months ended October 1, 2023 and October 2, 2022, is presented in the following table:

	Three Months Ended				Nine Months Ended
	October 1, 2023		October 2, 2022		October 1, 2023		October 2, 2022
	(in thousands)
Net sales
AMS	$	178,194	$	194,449	$	548,716	$	557,768
EAAA	132,812		133,308		387,664		404,596
Total net sales	$	311,006	$	327,757	$	936,380	$	962,364
Segment AOI
AMS	$	23,318	$	24,975	$	58,621	$	74,502
EAAA	9,049		6,273		16,805		25,908
Depreciation and amortization
AMS	$	4,640	$	4,344	$	13,457	$	12,585
EAAA	5,805		5,481		17,134		18,076
Total depreciation and amortization	$	10,445	$	9,825	$	30,591	$	30,661

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

	October 1, 2023		January 1, 2023
	(in thousands)
Assets
AMS	$	587,424	$	588,110
EAAA	637,825		652,921
Total segment assets	1,225,249		1,241,031
Corporate assets	101,224		110,495
Eliminations	(124,832)		(85,023)
Total reported assets	$	1,201,641	$	1,266,503

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

	Three Months Ended				Nine Months Ended
	October 1, 2023		October 2, 2022		October 1, 2023		October 2, 2022
	(in thousands)
AMS operating income	$	23,530	$	24,955	$	56,997	$	74,618
EAAA operating income	7,455		3,087		12,373		15,369
Consolidated operating income	30,985		28,042		69,370		89,987
Interest expense	8,163		7,747		24,986		21,787
Other expense, net	6,702		124		7,674		1,688
Income before income tax expense	$	16,120	$	20,171	$	36,710	$	66,512

	Three Months Ended October 1, 2023				Three Months Ended October 2, 2022
	AMS		EAAA		AMS		EAAA
	(in thousands)
Operating income	$	23,530	$	7,455	$	24,955	$	3,087
Purchase accounting amortization	—		1,302		—		1,204
Thailand plant closure inventory write-down	—		—		—		477
Cyber Event impact	62		42		—		—
Restructuring, asset impairment, severance, and other, net	(274)		250		20		1,505
AOI	$	23,318	$	9,049	$	24,975	$	6,273

	Nine Months Ended October 1, 2023				Nine Months Ended October 2, 2022
	AMS		EAAA		AMS		EAAA
	(in thousands)
Operating income	$	56,997	$	12,373	$	74,618	$	15,369
Purchase accounting amortization	—		3,886		—		3,817
Thailand plant closure inventory write-down	—		—		—		2,530
Cyber Event impact	554		415		—		—
Restructuring, asset impairment, severance, and other, net	1,070		131		(116)		4,192
AOI	$	58,621	$	16,805	$	74,502	$	25,908