XML 42 R27.htm IDEA: XBRL DOCUMENT v3.20.2
SEGMENT INFORMATION
 12 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION:
The Company manages its businesses under three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment consists of brand management, pre-media services, printing plates and cylinders, engineered products, imaging services, digital asset management, merchandising display systems, and marketing and design services primarily for the consumer goods and retail industries. The Memorialization segment consists primarily of bronze and granite memorials and other memorialization products, caskets, and cremation and incineration equipment primarily for the cemetery and funeral home industries.  The Industrial Technologies segment includes marking and coding equipment and consumables, industrial automation products and order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

The Company's primary measure of segment profitability is adjusted earnings before interest, income taxes, depreciation and amortization ("adjusted EBITDA"). Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition costs, ERP integration costs, and strategic initiatives and other charges. This presentation is consistent with how the Company's chief operating decision maker (the “CODM”) evaluates the results of operations and makes strategic decisions about the business. For these reasons, the Company believes that adjusted EBITDA represents the most relevant measure of segment profit and loss.

In addition, the CODM manages and evaluates the operating performance of the segments, as described above, on a pre-corporate cost allocation basis. Accordingly, for segment reporting purposes, the Company does not allocate corporate costs to its reportable segments. Corporate costs include management and administrative support to the Company, which consists of certain aspects of the Company’s executive management, legal, compliance, human resources, information technology (including operational support) and finance departments. These costs are included within "Corporate and Non-Operating" in the following table to reconcile to consolidated adjusted EBITDA and are not considered a separate reportable segment. Management does not allocate non-operating items such as investment income, other income (deductions), net and noncontrolling interest to the segments. The accounting policies of the segments are the same as those described in Summary of Significant Accounting Policies (Note 2).  Intersegment sales are accounted for at negotiated prices.  Segment assets include those assets that are used in the Company's operations within each segment.  Assets classified under "Corporate and Non-Operating" principally consist of cash and cash equivalents, investments, deferred income taxes and corporate headquarters' assets.  Long-lived assets include property, plant and equipment (net of accumulated depreciation), goodwill, and other intangible assets (net of accumulated amortization).
Information about the Company's segments follows:
 SGK Brand SolutionsMemorializationIndustrial TechnologiesCorporate and Non-OperatingConsolidated
Sales to external customers:
2020$693,093 $656,035 $149,178 $— $1,498,306 
2019743,869 636,892 156,515 — 1,537,276 
2018805,274 631,392 165,914 — 1,602,580 
Intersegment sales:
202029 4 281 — 314 
2019703 25 48 — 776 
2018310 2 9 — 321 
Depreciation and amortization:
202087,597 20,527 5,771 5,163 119,058 
201959,684 19,731 6,195 5,183 90,793 
201846,300 20,005 5,796 4,873 76,974 
Adjusted EBITDA:
202090,644 146,285 22,753 (56,602)203,080 
2019119,493 134,286 24,082 (56,989)220,872 
2018150,233 145,487 25,864 (66,470)255,114 
Total assets:
20201,014,097 779,886 192,948 85,702 2,072,633 
20191,106,276 830,377 191,533 62,417 2,190,603 
20181,285,053 814,800 196,855 61,036 2,357,744 
Capital expenditures:
202020,250 11,282 1,598 1,719 34,849 
201922,310 9,352 2,382 3,644 37,688 
201822,133 15,513 2,577 2,977 43,200 
A reconciliation of adjusted EBITDA to net income follows:
202020192018
Total Adjusted EBITDA$203,080 $220,872 $255,114 
Acquisition costs (1)**
$(3,844)$(10,872)$(10,918)
ERP integration costs (2)**
(2,296)(7,508)(10,864)
Strategic initiatives and other charges (3)**
(33,799)(13,449)(5,266)
Legal matter reserve (4)
(10,566)— — 
Non-recurring / incremental COVID-19 costs (5)
(4,655)— — 
Goodwill write-downs (6)
(90,408)(77,572)— 
Net realized gains (losses) on divestitures and asset dispositions:
Gain (loss) on sale of ownership interests in subsidiaries (7)
11,208 (6,469)— 
Realized (loss) gain on cost-method investments (8)
— (4,731)3,771 
Net gains from the sale of buildings and vacant properties (9)
— 7,347 — 
Joint Venture depreciation, amortization, interest expense and other charges (10)
(4,732)(1,514)— 
Stock-based compensation (8,096)(7,729)(13,460)
Non-service pension and postretirement expense (11)
(7,789)(3,802)(5,723)
Depreciation and amortization *
(119,058)(90,793)(76,974)
Interest expense(34,885)(40,962)(37,427)
Net loss attributable to noncontrolling interests(497)(901)(260)
(Loss) income before income taxes(106,337)(38,083)97,993 
Income tax benefit (provision)18,685 (806)9,118 
Net (loss) income$(87,652)$(38,889)$107,111 

(1) Includes certain non-recurring costs associated with recent acquisition activities.
(2) Represents costs associated with global ERP system integration efforts.
(3) Includes certain non-recurring costs primarily associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels. 
(4) Represents a reserve established for a legal matter involving a letter of credit for a customer in Saudi Arabia within the Memorialization segment (see Note 9, "Long Term Debt").
(5) Includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19. This amount does not include the impact of any lost sales or underutilization due to COVID-19.
(6) Represents goodwill write-downs within the SGK Brand Solutions segment (see Note 21, "Goodwill and Other Intangible Assets").
(7) Represents the gain (loss) on the sale of ownership interests in subsidiaries within the Memorialization segment.
(8) Includes gains/losses related to cost-method investments, and related assets, within the SGK Brand Solutions and Memorialization segments.
(9) Includes significant building and vacant property transactions resulting in a gain of $8,663 within the Industrial Technologies segment and losses of $915 and $401 within the SGK Brand Solutions and Memorialization segments, respectively.
(10) Represents the Company's portion of depreciation, intangible amortization, interest expense, and other non-recurring charges incurred by non-consolidated subsidiaries accounted for as equity-method investments within the Memorialization segment.
(11) Non-service pension and postretirement expense includes interest cost, expected return on plan assets and amortization of actuarial gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.
* Depreciation and amortization was $87,597, $59,684, and $46,300 for the SGK Brand Solutions segment, $20,527, $19,731, and $20,005 for the Memorialization segment, $5,771, $6,195, and $5,796 for the Industrial Technologies segment, and $5,163, $5,183, and $4,873 for Corporate and Non-Operating, for the fiscal years ended September 30, 2020, 2019, and 2018, respectively.
** Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $13,990, $8,903, and $11,044 for the SGK Brand Solutions segment, $268, $3,073, and $613 for the Industrial Technologies segment, and $22,985, $19,853, and $13,961 for Corporate and Non-Operating, for the fiscal years ended September 30, 2020, 2019, and 2018, respectively. Acquisition costs, ERP integration costs, and strategic initiatives and other charges were $2,696, and $1,430 for the Memorialization segment for the fiscal years ended September 30, 2020, and 2018, respectively.
Information about the Company's operations by geographic area follows:
 North AmericaCentral and South AmericaEuropeAustraliaAsiaConsolidated
Sales to external customers:
2020$1,037,705 $6,304 $387,831 $21,079 $45,387 $1,498,306 
20191,038,268 5,853 426,253 20,885 46,017 1,537,276 
20181,066,367 6,171 456,078 23,276 50,688 1,602,580 
Long-lived assets:     
2020957,393 14,063 286,990 21,746 55,482 1,335,674 
20191,047,505 15,585 342,802 21,278 57,729 1,484,899 
20181,182,250 16,535 365,455 23,037 58,302 1,645,579