Note 15 - Segments

12 Months Ended

Dec. 02, 2023

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:

	2023			2022			2021
Net revenue
Hygiene, Health and Consumable Adhesives	$	1,601,487		$	1,695,934		$	1,472,756
Engineering Adhesives		1,428,744			1,532,639			1,371,756
Construction Adhesives		480,703			520,610			433,519
Total	$	3,510,934		$	3,749,183		$	3,278,031
Segment operating income (loss)
Hygiene, Health and Consumable Adhesives	$	215,088		$	165,786		$	138,366
Engineering Adhesives		187,346			168,873			135,913
Construction Adhesives		5,961			22,989			14,148
Total segment		408,395			357,648			288,427
Corporate Unallocated1		(53,258	)		(34,930	)		(35,815	)
Total	$	355,137		$	322,718		$	252,612
Depreciation and amortization
Hygiene, Health and Consumable Adhesives	$	53,398		$	46,374		$	45,919
Engineering Adhesives		63,143			58,307			61,082
Construction Adhesives		41,915			41,713			35,002
Corporate Unallocated1		1,384			582			1,171
Total	$	159,840		$	146,976		$	143,174
Total assets2
Hygiene, Health and Consumable Adhesives	$	1,661,122		$	1,488,277
Engineering Adhesives		1,627,715			1,610,015
Construction Adhesives		990,296			987,610
Corporate		444,442			377,727
Total	$	4,723,575		$	4,463,629
Capital expenditures
Hygiene, Health and Consumable Adhesives	$	67,933		$	110,877
Engineering Adhesives		14,888			(2,302	)
Construction Adhesives		4,540			(5,772	)
Corporate		31,776			27,161
Total	$	119,137		$	129,964

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:

	2023			2022			2021
Segment operating income	$	355,137		$	322,718		$	252,612
Other income, net		9,682			12,952			32,855
Interest expense		(134,602	)		(91,521	)		(78,092	)
Interest income		3,943			7,779			9,476
Income before income taxes and income from equity method investments	$	234,160		$	251,928		$	216,851

Financial information about geographic areas

	Net Revenue
	2023		2022		2021
United States	$	1,551,846	$	1,692,903	$	1,421,623
China		430,948		462,587		433,998
Germany		393,029		419,141		409,193
Countries with more than 10 percent of total		2,375,823		2,574,631		2,264,814
All other countries with less than 10 percent of total		1,135,111		1,174,552		1,013,217
Total	$	3,510,934	$	3,749,183	$	3,278,031

	Property, Plant and Equipment, net
	2023		2022		2021
United States	$	425,765	$	375,353	$	331,864
Germany		114,266		107,903		120,548
China		110,061		101,563		96,300
All other countries with less than 10 percent of total		174,563		148,848		146,655
Total	$	824,655	$	733,667	$	695,367

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 2, 2023
	Hygiene, Health and Consumable		Engineering		Construction		Corporate
	Adhesives		Adhesives		Adhesives		Unallocated		Total
Americas	$	919,024	$	577,751	$	363,517	$	-	$	1,860,292
EIMEA		476,397		460,327		85,738		-		1,022,462
Asia Pacific		206,066		390,666		31,448		-		628,180
	$	1,601,487	$	1,428,744	$	480,703	$	-	$	3,510,934

	December 3, 2022
	Hygiene, Health and Consumable		Engineering		Construction		Corporate
	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 Consumable		Engineering		Construction		Corporate
	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