Operating Segments

3 Months Ended

Jan. 31, 2018

11.	Operating segments

We conduct business across three primary business segments: Adhesive Dispensing Systems, Advanced Technology Systems, and Industrial Coating Systems. 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. The accounting policies of the segments are 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, 2017.

The following table presents information about our segments:

	Adhesive Dispensing Systems			Advanced Technology Systems		Industrial Coating Systems		Corporate			Total
Three months ended
January 31, 2018
Net external sales	$	220,864		$	271,701	$	57,859	$	—		$	550,424
Operating profit (loss)		53,315	(a)		67,268		10,160		(13,020	)		117,723
Three months ended
January 31, 2017
Net external sales	$	207,837		$	145,360	$	54,273	$	—		$	407,470
Operating profit (loss)		53,056	(a)		26,363		7,085		(10,586	)		75,918

(a)

Includes $1,067 and $227 of severance and restructuring costs in the three months ended January 31, 2018 and 2017, respectively.

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

	Three Months Ended
	January 31, 2018			January 31, 2017
Total profit for reportable segments	$	117,723		$	75,918
Interest expense		(11,317	)		(5,641	)
Interest and investment income		289			273
Other-net		(3,177	)		(157	)
Income before income taxes	$	103,518		$	70,393

We have significant sales in the following geographic regions:

	Three Months Ended
	January 31, 2018		January 31, 2017
United States	$	165,831	$	125,521
Americas		34,279		30,042
Europe		141,938		119,159
Japan		65,869		24,177
Asia Pacific		142,507		108,571
Total net external sales	$	550,424	$	407,470