Segment Information

3 Months Ended

Mar. 31, 2024

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 (“SG&A”) expenses and allocations of global support SG&A as discussed below. AOI excludes: nora purchase accounting amortization; Cyber Event impact; property casualty loss; and restructuring, asset impairment, severance, and other, net. Intersegment revenues for the three months ended March 31, 2024 and April 2, 2023 were $16.8 million and $22.6 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.

During the first quarter of 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions. For the quarter ended March 31, 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment. There were no changes to the composition of the Company’s operating or reportable segments.

Segment information for the three months ended March 31, 2024 and April 2, 2023 is presented in the following table:

	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Net sales
AMS	$	169,915	$	169,241
EAAA	119,828		126,551
Total net sales	$	289,743	$	295,792
Segment AOI
AMS	$	18,080	$	11,269
EAAA	7,445		3,929
Depreciation and amortization
AMS	$	4,353	$	4,393
EAAA	5,263		5,598
Total depreciation and amortization	$	9,616	$	9,991

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

	March 31, 2024		December 31, 2023
	(in thousands)
Assets
AMS	$	546,971	$	627,782
EAAA	603,853		630,939
Total segment assets	1,150,824		1,258,721
Corporate assets	110,168		108,673
Eliminations	(67,500)		(137,299)
Total reported assets	$	1,193,492	$	1,230,095

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

	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
AMS operating income	$	18,195	$	8,715
EAAA operating income	6,251		762
Consolidated operating income	24,446		9,477
Interest expense	6,423		8,505
Other (income) expense, net	(976)		1,500
Income (loss) before income tax expense	$	18,999	$	(528)

	Three Months Ended March 31, 2024				Three Months Ended April 2, 2023
	AMS		EAAA		AMS		EAAA
	(in thousands)
Operating income	$	18,195	$	6,251	$	8,715	$	762
Purchase accounting amortization	—		1,297		—		1,283
Cyber Event impact	(246)		(170)		228		200
Property casualty loss	—		—		1,300		—
Restructuring, asset impairment, severance, and other, net	131		67		1,026		1,684
AOI	$	18,080	$	7,445	$	11,269	$	3,929