Segment Information

12 Months Ended

Dec. 28, 2019

SEGMENT INFORMATION

The company operates in three reportable operating segments defined by management reporting structure and operating activities.

The Commercial Foodservice Equipment Group manufactures, sells, and distributes foodservice equipment for the restaurant and institutional kitchen industry. This business segment has manufacturing facilities in Arkansas, California, Illinois, Michigan, New Hampshire, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Vermont, Washington, Australia, China, Denmark, Estonia, Italy, the Philippines, Spain, Poland, Sweden and the United Kingdom. Principal product lines of this group include conveyor ovens, combi-ovens, convection ovens, baking ovens, proofing ovens, deck ovens, speed cooking ovens, hydrovection ovens, ranges, fryers, rethermalizers, steam cooking equipment, food warming equipment, catering equipment, heated cabinets, charbroilers, ventless cooking systems, kitchen ventilation, induction cooking equipment, countertop cooking equipment, toasters, griddles, charcoal grills, professional mixers, stainless steel fabrication, custom millwork, professional refrigerators, blast chillers, coldrooms, ice machines, freezers, soft serve ice cream equipment, coffee and beverage dispensing equipment, home and professional craft brewing equipment and IoT solutions. These products are sold and marketed under the brand names: Anets, APW Wyott, Bakers Pride, Beech, BKI, Blodgett, Blodgett Combi, Blodgett Range, Bloomfield, Britannia, Carter-Hoffmann, Celfrost, Concordia, CookTek, Crown, CTX, Desmon, Doyon, Eswood, EVO, Firex, Follett, Frifri, Giga, Globe, Goldstein, Holman, Houno, IMC, Induc, Jade, JoeTap, Josper, L2F, Lang, Lincat, MagiKitch’n, Market Forge, Marsal, Middleby Marshall, MPC, Nieco, Nu-Vu, PerfectFry, Pitco, Powerhouse Dynamics, QualServ, Southbend, Ss Brewtech, Star, Starline, Sveba Dahlen, Synesso, Taylor, Toastmaster, TurboChef, Ultrafryer, Varimixer, Wells and Wunder-Bar.

The Food Processing Equipment Group manufactures preparation, cooking, packaging food handling and food safety equipment for the food processing industry. This business segment has manufacturing operations in Georgia, Illinois, Iowa, North Carolina, Oklahoma, Texas, Virginia, Washington, Wisconsin, Denmark, France, Germany, India, Italy, and the United Kingdom. Principal product lines of this group include batch ovens, baking ovens, proofing ovens, conveyor belt ovens, continuous processing ovens, frying systems and automated thermal processing systems, grinders, slicers, reduction and emulsion systems, mixers, blenders, battering equipment, breading equipment, seeding equipment, water cutting systems, food presses, food suspension equipment, filling and depositing solutions, forming equipment, automated loading and unloading systems, food safety, food handling, freezing, defrosting and packaging equipment. These products are sold and marketed under the brand names: Alkar, Armor Inox, Auto-Bake, Baker Thermal Solutions, Burford, Cozzini, CVP Systems, Danfotech, Drake, Emico, Glimek, Hinds-Bock, Maurer-Atmos, MP Equipment, M-TEK, Pacproinc, RapidPak, Scanico, Spooner Vicars, Stewart Systems, Thurne and Ve.Ma.C.

The Residential Kitchen Equipment Group manufactures, sells and distributes kitchen equipment for the residential market. This business segment has manufacturing facilities in California, Michigan, Mississippi, Wisconsin, France, Ireland and the United Kingdom. Principal product lines of this group are ranges, cookers, stoves, ovens, refrigerators, dishwashers, microwaves, cooktops, wine coolers, ice machines, ventilation equipment and outdoor equipment. These products are sold and marketed under the brand names: AGA, AGA Cookshop, Brava, EVO, Fired Earth, Heartland, La Cornue, Leisure Sinks, Lynx, Marvel, Mercury, Rangemaster, Rayburn, Redfyre, Sedona, Stanley, TurboChef, U-Line and Viking.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The chief operating decision maker evaluates individual segment performance based on operating income. Management believes that intersegment sales are made at established arm's length transfer prices.

The following table summarizes the results of operations for the company’s business segments(1) (dollars in thousands):



	Commercial Foodservice		Food Processing		Residential Kitchen			Corporate and Other(2)			Total
2019
Net sales	$	1,984,345	$	400,951	$	574,150		$	—		$	2,959,446
Operating income ^(3,4)	429,946		68,935		89,312			(74,150		)	514,043
Depreciation expense	21,054		4,944		11,742			112			37,852
Amortization expense ⁽⁵⁾	45,906		8,162		9,896			1,612			65,576
Net capital expenditures	29,353		6,683		9,168			1,405			46,609
Total assets	3,188,304		621,619		1,157,211			35,009			5,002,143
Long-lived assets⁽⁶⁾	261,466		57,403		176,834			4,116			499,819

2018
Net sales	$	1,729,814	$	389,594	$	603,523		$	—		$	2,722,931
Operating income ⁽³⁾	393,380		62,435		53,959			(63,808		)	445,966
Depreciation expense	17,374		5,207		12,838			363			35,782
Amortization expense ⁽⁵⁾	35,224		7,527		17,226			1,479			61,456
Net capital expenditures	17,444		7,373		11,721			(498		)	36,040
Total assets	2,906,373		513,189		1,089,103			41,116			4,549,781
Long-lived assets ⁽⁶⁾	181,636		33,127		146,897			22,328			383,988

2017
Net sales	$	1,382,108	$	352,717	$	600,717		$	—		$	2,335,542
Operating income ^(3,7,8)	357,085		88,121		(377		)	(66,216		)	378,613
Depreciation expense	12,643		3,677		12,984			406			29,710
Amortization expense ⁽⁵⁾	17,338		3,680		17,567			1,479			40,064
Net capital expenditures	41,457		5,519		7,637			(120		)	54,493
Total assets	1,693,820		450,932		1,140,668			54,293			3,339,713
Long-lived assets ⁽⁶⁾	148,565		25,346		167,486			21,191			362,588


(1)	Non-operating expenses are not allocated to the reportable segments. Non-operating expenses consist of interest expense and deferred financing amortization, foreign exchange gains and losses and other income and expense items outside of income from operations.


(2)	Includes corporate and other general company assets and operations.


(3)	Restructuring expenses are included in operating income of the segment to which they pertain. See note 13 for further details.


(4)	Gain on litigation settlement is included in Residential Kitchen.


(5)	Includes amortization of deferred financing costs.


(6)	Long-lived assets consist of property, plant and equipment, long-term deferred tax assets and other assets.


(7)	Gain on sale of plant is included in Commercial Foodservice.


(8)	Impairment of intangible assets is included in Residential Kitchen.

Geographic Information

Long-lived assets, not including goodwill and other intangibles (in thousands):



	2019		2018		2017
United States and Canada	$	305,207	$	262,482	$	221,479

Asia	22,312		12,136		14,033
Europe and Middle East	165,781		108,001		126,264
Latin America	6,519		1,369		812
Total International	194,612		121,506		141,109

	$	499,819	$	383,988	$	362,588