Segment Information

12 Months Ended

Aug. 31, 2012

SEGMENT INFORMATION [Abstract]

Segment Reporting Disclosure [Text Block]

SEGMENT INFORMATION

The Company considers its operating structure and the types of information subject to regular review by its President and Chief Executive Officer (“CEO”), who is the Chief Operating Decision Maker (“CODM”), to identify reportable segments. The CODM makes decisions, assesses performance and allocates resources by the following regions, which are also the Company’s reportable segments: EMEA, the Americas, and APAC. Each reportable segment has a General Manager/Chief Operating Officer who reports to the CODM.

The CODM uses net sales to unaffiliated customers, gross profit and operating income before certain items in order to make decisions, assess performance and allocate resources to each segment. Segment operating income does not include items such as interest income or expense, other income or expense, foreign currency transaction gains or losses, restructuring related expenses, asset write-downs, costs related to business acquisitions and inventory step-up charges related to business acquisitions. Corporate expenses include the compensation of certain personnel, certain audit expenses, board of directors related costs, certain insurance costs, costs associated with being a publicly traded entity and other miscellaneous legal and professional fees.

Below the Company presents net sales to unaffiliated customers by segment: 

	Year Ended August 31,
	2012		2011		2010
	(In thousands)
EMEA	$	1,403,151	$	1,533,993	$	1,142,523
Americas	558,910		516,814		363,011
APAC	144,692		142,148		84,909
Total net sales to unaffiliated customers	$	2,106,753	$	2,192,955	$	1,590,443

Below the Company presents gross profit by segment: 

	Year Ended August 31,
	2012			2011			2010
	(In thousands)
EMEA	$	171,768		$	197,171		$	177,010
Americas	84,282			71,698			48,213
APAC	22,044			17,284			11,656
Total segment gross profit	278,094			286,153			236,879
Asset write-downs	—			—			(69		)
Inventory step-up	(677		)	(607		)	(3,942		)
Total gross profit	$	277,417		$	285,546		$	232,868

Below is a reconciliation of segment operating income to operating income and income from continuing operations before taxes:

	Year Ended August 31,
	2012			2011			2010
	(In thousands)
EMEA	$	71,849		$	86,663		$	69,393
Americas	28,872			14,032			12,036
APAC	10,145			5,587			2,981
Total segment operating income	110,866			106,282			84,410
Corporate and other	(23,786		)	(25,106		)	(20,538		)
Costs related to acquisitions	(1,425		)	(1,429		)	(6,814		)
Restructuring related	(9,256		)	(8,117		)	(5,098		)
Asset write-downs	(3,392		)	(8,150		)	(5,737		)
Curtailment gain (loss)	310			—			(270		)
Inventory step-up	(677		)	(607		)	(3,942		)
Operating income	72,640			62,873			42,011
Interest expense, net	(7,678		)	(5,531		)	(3,665		)
Foreign currency transaction gains (losses)	(245		)	(1,595		)	(884		)
Other income (expense), net	1,251			1,720			2,469
Income from continuing operations before taxes	$	65,968		$	57,467		$	39,931

The following table summarizes identifiable assets by segment: 

	As of August 31,
	2012		2011		2010
	(In thousands)
EMEA	$	677,066	$	737,698	$	616,592
Americas	426,963		408,714		369,210
APAC	89,738		93,575		85,513
Total identifiable assets	$	1,193,767	$	1,239,987	$	1,071,315

The following tables summarize depreciation and amortization and capital expenditures by segment: 

	Year Ended August 31,
	2012		2011		2010
	(In thousands)
Depreciation and amortization expense:
EMEA	$	17,534	$	18,522	$	13,896
Americas	17,531		17,810		11,144
APAC	3,719		3,942		2,409
Total depreciation and amortization expense	$	38,784	$	40,274	$	27,449
Capital expenditures:
EMEA	$	11,383	$	12,541	$	10,927
Americas	17,725		12,328		7,125
APAC	4,895		1,490		925
Total capital expenditures	$	34,003	$	26,359	$	18,977

Below is a summary of net sales by point of origin and long-lived assets by location: 

	Year Ended August 31,
	2012		2011		2010
	(In thousands)
Net sales:
United States	$	358,376	$	337,423	$	231,890
Germany	571,876		617,266		496,073
Other international	1,176,501		1,238,266		862,480
Total net sales	$	2,106,753	$	2,192,955	$	1,590,443

	As of August 31,
	2012		2011		2010
	(In thousands)
Long lived assets:
United States	$	76,699	$	74,102	$	89,345
Germany	23,020		27,680		24,876
France	22,832		21,744		19,536
Other international	103,325		110,774		105,206
Total long lived assets	$	225,876	$	234,300	$	238,963

Globally, the Company operates primarily in four product families: (1) masterbatch, (2) engineered plastics, (3) specialty powders and (4) distribution services. The amount and percentage of consolidated net sales for these product families are as follows: 

	2012				2011				2010
	(In thousands, except for %’s)
Masterbatch	$	876,126	42	%	$	880,406	40	%	$	676,977	43	%
Engineered plastics	547,090		26		546,964		25		460,141		29
Specialty powders	340,446		16		372,360		17		129,122		8
Distribution services	343,091		16		393,225		18		324,203		20
Total net sales	$	2,106,753	100	%	$	2,192,955	100	%	$	1,590,443	100	%

Consistent with the Company's global growth strategies, an extensive evaluation of the Company's three regional segments was conducted with particular focus on each segment's Masterbatch product family. As a result of this evaluation and in order to put greater focus on growth opportunities, effective September 1, 2012, the Masterbatch product family was split into two separate product families, Custom Performance Colors and Masterbatch Solutions.