Operating Segments

9 Months Ended

Jul. 31, 2020

Segment Reporting [Abstract]

Operating Segments

11. Operating segments  

We conduct business across two primary operating segments:  Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS).  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 Statements 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.  

Effective in the second quarter of 2020, we made changes to realign our management team and our operating segments. This realignment will enable us to better serve global customers and markets, to more efficiently leverage technology synergies, to operate divisions of significant size in a consistent and focused way and to position ourselves for our next chapter of profitable growth. The revised operating segments better reflect how we manage the Company, allocate resources, and assess performance of the businesses.

We realigned our former three operating segments into two: Industrial Precision Solutions and Advanced Technology Solutions. Existing product lines were unchanged as part of this new structure.

Industrial Precision Solutions: This segment combines our former Adhesive Dispensing Systems (ADS) and Industrial Coating Systems (ICS) businesses. IPS enhances the technology synergies between ADS and ICS to deliver proprietary dispensing and processing technology to diverse end markets. Product lines reduce material consumption, increase line efficiency and enhance product brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This segment primarily serves the industrial, consumer durables and non-durables markets.

Advanced Technology Solutions: This segment integrates our proprietary product technologies found in progressive stages of a customer’s production processes, such as surface treatment, precisely controlled dispensing of material and post-dispense test and inspection to ensure quality. Related single-use plastic molded syringes, cartridges, tips, fluid connection components, tubing, balloons and catheters are used to dispense or control fluids in production processes or within customers’ end products. This segment predominantly serves customers in the electronics, medical and related high-tech industrial markets.

The financial information presented herein reflects the impact of the preceding changes and prior periods have been revised to reflect these changes.

The following table presents information about our segments:

	Industrial Precision Solutions		Advanced Technology Solutions		Corporate			Total
Three months ended
July 31, 2020
Net external sales	$	288,965	$	249,216	$	—		$	538,181
Operating profit (loss)		74,744		49,952		(12,641	)		112,055
July 31, 2019
Net external sales	$	306,648	$	253,098	$	—		$	559,746
Operating profit (loss)		88,811		53,562		(12,097	)		130,276
Nine months ended
July 31, 2020
Net external sales	$	835,038	$	727,537	$	—		$	1,562,575
Operating profit (loss)		207,603		140,928		(36,354	)		312,177
July 31, 2019
Net external sales	$	871,925	$	736,850	$	—		$	1,608,775
Operating profit (loss)		229,702		150,882		(37,131	)		343,453

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

	Three Months Ended						Nine Months Ended
	July 31, 2020			July 31, 2019			July 31, 2020			July 31, 2019
Total profit for reportable segments	$	112,055		$	130,276		$	312,177		$	343,453
Interest expense		(7,314	)		(11,500	)		(25,348	)		(36,238	)
Interest and investment income		434			511			1,301			1,153
Other-net		(9,668	)		210			(12,943	)		(4,546	)
Income before income taxes	$	95,507		$	119,497		$	275,187		$	303,822

We have significant sales in the following geographic regions:

	Three Months Ended				Nine Months Ended
	July 31, 2020		July 31, 2019		July 31, 2020		July 31, 2019
United States	$	183,508	$	190,460	$	560,941	$	551,510
Americas		38,265		47,040		106,021		123,159
Europe		132,107		143,449		394,554		425,650
Japan		31,226		30,488		90,353		89,566
Asia Pacific		153,075		148,309		410,706		418,890
Total net external sales	$	538,181	$	559,746	$	1,562,575	$	1,608,775