Operating segments

9 Months Ended

Jul. 31, 2011

	13.		Operating segments. We conduct business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems, and Industrial Coating Systems. Effective November 1, 2010, the Industrial Coating Systems segment includes our industrial UV Curing product line that had previously been reported in the Advanced Technology Systems segment, where it was combined with our former UV Curing graphic arts and lamps product lines that were sold in 2010. This change more closely reflects the change in management of this product line and its related growth opportunities. Prior year results have been reclassified to reflect the segment change.

			The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Consolidated Statement of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. In addition, the measure of segment operating profit that is reported to and reviewed by the chief operating decision maker excludes severance costs associated with the 2008-2010 cost reduction program and expense related to the withdrawal from a multiemployer employee pension fund in Japan. The accounting policies of the segments are generally the same as those described in Note 1, Significant Accounting Policies, of our annual report on Form 10-K for the year ended October 31, 2010.

The following table presents sales and operating profits of our reportable segments:


	Adhesive			Advanced		Industrial
	Dispensing			Technology		Coating
	Systems			Systems		Systems		Corporate			Total

Three months ended July 31, 2011
Net external sales	$	153,071		$	111,652	$	47,532	$	—		$	312,255
Operating profit (loss)		51,385			30,884		8,417		(12,030)	^a		78,656

Three months ended July 31, 2010
Net external sales	$	135,517		$	102,980	$	40,624	$	—		$	279,121
Operating profit (loss)		43,763			26,572		5,004		(7,644)	^b		67,695

Nine months ended July 31, 2011
Net external sales	$	449,479		$	321,339	$	131,323	$	—		$	902,141
Operating profit (loss)		157,230	^c		87,726		19,125		(27,473)	^a		236,608

Nine months ended July 31, 2010
Net external sales	$	382,681		$	267,888	$	100,800	$	—		$	751,369
Operating profit (loss)		119,661			58,940		6,834		(23,880)	^b		161,555


a	-	Includes $3,136 of expense related to the withdrawal from a multiemployer employee pension fund in Japan.

b	-	Includes $347 of severance costs in the three months ended July 31, 2010 and $1,449 in the nine months ended July 31, 2010.

c	-	Includes $1,322 of impairment charges related to write down of assets to fair value.

A reconciliation of total segment operating income to total consolidated income before income taxes is as follows:


Three months ended	July 31, 2011			July 31, 2010

Total profit for reportable segments	$	78,656		$	67,695
Interest expense		(827	)		(1,580	)
Interest and investment income		190			170
Other-net		169			177

Income before income taxes	$	78,188		$	66,462


Nine months ended	July 31, 2011			July 31, 2010

Total profit for reportable segments	$	236,608		$	161,555
Interest expense		(3,560	)		(4,661	)
Interest and investment income		430			649
Other-net		2,896			700

Income before income taxes	$	236,374		$	158,243

We had significant sales in the following geographic regions:


Three months ended	July 31, 2011		July 31, 2010

United States	$	77,883	$	71,953
Americas		26,510		21,146
Europe		97,620		81,925
Japan		26,663		26,864
Asia Pacific		83,579		77,233

Total net sales	$	312,255	$	279,121


Nine months ended	July 31, 2011		July 31, 2010

United States	$	227,456	$	197,337
Americas		72,528		56,556
Europe		285,927		243,374
Japan		81,895		67,041
Asia Pacific		234,335		187,061

Total net sales	$	902,141	$	751,369

Prior year sales include reclassification adjustments primarily into Asia Pacific from the United States based on more accurate end-user destination information for products sold by our Advanced Technology Systems segment to certain global customers.