Note 15 - Segments

12 Months Ended

Dec. 03, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 15: Segments

We are required to report segment information in the same way that we internally organize our business for assessing performance and making decisions regarding allocation of resources. Revenue and operating income of each of our segments are regularly reviewed by our chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. Segment operating income is identified as gross profit less SG&A expenses. Corporate expenses, other than those included in Corporate Unallocated, are allocated to each operating segment. Consistent with our internal management reporting, Corporate Unallocated amounts include business acquisition and integration costs, organizational restructuring charges and project costs associated with our implementation of Project ONE. Corporate assets are not allocated to the operating segments. Inter-segment revenues are recorded at cost plus a markup for administrative costs.

We have three reportable segments: Hygiene, Health and Consumable Adhesives, Engineering Adhesives and Construction Adhesives.  The business components within each operating segment are managed to maximize the results of the overall operating segment rather than the results of any individual business component of the operating segment. Results of individual components of each operating segment are subject to numerous allocations of segment-wide costs that may or may not have been focused on that particular component for a particular reporting period. The costs for these allocated resources are not tracked on a “where-used” basis as financial performance is assessed at the total operating segment level.

Reportable operating segment financial information for all periods presented is as follows:

	2022			2021			2020
Net revenue
Hygiene, Health and Consumable Adhesives	$	1,695,934		$	1,472,756		$	1,332,786
Engineering Adhesives		1,532,639			1,371,756			1,088,313
Construction Adhesives		520,610			433,519			369,170
Total	$	3,749,183		$	3,278,031		$	2,790,269
Segment operating income
Hygiene, Health and Consumable Adhesives	$	165,786		$	138,366		$	130,789
Engineering Adhesives		168,873			135,913			103,974
Construction Adhesives		22,989			14,148			11,148
Total segment		357,648			288,427			245,911
Corporate Unallocated1		(34,930	)		(35,815	)		(27,594	)
Total	$	322,718		$	252,612		$	218,317
Depreciation and amortization
Hygiene, Health and Consumable Adhesives	$	46,374		$	45,919		$	44,329
Engineering Adhesives		58,307			61,082			58,102
Construction Adhesives		41,713			35,002			35,811
Corporate Unallocated1		582			1,171			575
Total	$	146,976		$	143,174		$	138,817
Total assets2
Hygiene, Health and Consumable Adhesives	$	1,488,277		$	1,370,924
Engineering Adhesives		1,610,015			1,710,000
Construction Adhesives		987,610			810,824
Corporate		377,727			382,782
Total	$	4,463,629		$	4,274,530
Capital expenditures
Hygiene, Health and Consumable Adhesives	$	110,877		$	60,164
Engineering Adhesives		(2,302	)		8,815
Construction Adhesives		(5,772	)		3,591
Corporate		27,161			23,519
Total	$	129,964		$	96,089

¹ Consistent with our internal management reporting, Corporate Unallocated amounts in the tables above include net revenue and charges that are not allocated to the Company’s reportable segments.

² Segment assets include primarily inventory, accounts receivable, property, plant and equipment, goodwill, intangible assets and other miscellaneous assets. Corporate assets include primarily corporate property, plant and equipment, deferred tax assets, certain investments and other assets.

Reconciliation of segment operating income to income before income taxes and income from equity method investments:

	2022			2021			2020
Segment operating income	$	322,718		$	252,612		$	218,317
Other income, net		12,952			32,855			15,398
Interest expense		(91,521	)		(78,092	)		(86,776	)
Interest income		7,779			9,476			11,417
Income before income taxes and income from equity method investments	$	251,928		$	216,851		$	158,356

Financial information about geographic areas

	Net Revenue
	2022		2021		2020
United States	$	1,692,903	$	1,421,623	$	1,248,495
China		462,587		433,998		351,204
Germany		419,141		409,193		330,755
Countries with more than 10 percent of total		2,574,631		2,264,814		1,930,454
All other countries with less than 10 percent of total		1,174,552		1,013,217		859,815
Total	$	3,749,183	$	3,278,031	$	2,790,269

	Property, Plant and Equipment, net
	2022		2021		2020
United States	$	375,353	$	331,864	$	297,046
Germany		107,903		120,548		131,879
China		101,563		96,300		99,513
All other countries with less than 10 percent of total		148,848		146,655		142,306
Total	$	733,667	$	695,367	$	670,744

We view the following disaggregation of net revenue by geographic region as useful to understanding the composition of revenue recognized during the respective reporting periods:

	December 3, 2022
	Hygiene, Health and		Engineering		Construction		Corporate
	Consumable Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	1,003,179	$	630,484	$	411,951	$	-	$	2,045,614
EIMEA		471,299		478,573		78,773		-		1,028,645
Asia Pacific		221,456		423,582		29,886		-		674,924
	$	1,695,934	$	1,532,639	$	520,610	$	-	$	3,749,183

	November 27, 2021
	Hygiene, Health and		Engineering		Construction		Corporate
	Consumable Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	826,172	$	504,626	$	384,576	$	-	$	1,715,374
EIMEA		425,324		470,466		22,156		-		917,946
Asia Pacific		221,260		396,664		26,787		-		644,711
	$	1,472,756	$	1,371,756	$	433,519	$	-	$	3,278,031

	November 28, 2020
	Hygiene, Health and		Engineering		Construction		Corporate
	Consumable Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	736,681	$	430,866	$	325,622	$	-	$	1,493,169
EIMEA		388,271		347,417		20,506		-		756,194
Asia Pacific		207,834		310,030		23,042		-		540,906
	$	1,332,786	$	1,088,313	$	369,170	$	-	$	2,790,269