Segment Information

9 Months Ended

Sep. 30, 2019

We are organized into six geographic operating segments based on management responsibilities. The operating segments have been aggregated (based on economic similarities, the nature of their products, end-user markets and methods of distribution) into three reportable segments: Americas, International, and Corporate.

The Americas segment is comprised of our operations in North America and Latin America geographies. The International segment is comprised of our operations of all geographies outside of the Americas. Certain global expenses are allocated to each segment in a manner consistent with where the benefits from the expenses are derived.

The Company's sales are allocated to each country based primarily on the destination of the end-customer.

Adjusted operating income (loss), adjusted operating margin, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA margin are the measures used by the chief operating decision maker to evaluate segment performance and allocate resources. Adjusted operating income (loss) is defined as operating income excluding restructuring charges, currency exchange gains/losses, product liability expense and strategic transaction costs and adjusted operating margin is defined as adjusted operating income (loss) divided by segment sales to external customers. Adjusted EBITDA is defined as adjusted operating income (loss) plus depreciation and amortization and adjusted EBITDA margin is defined as adjusted EBITDA divided by segment sales to external customers. Adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin are not recognized terms under U.S. GAAP and therefore do not purport to be alternatives to operating income or operating margin as a measure of operating performance. Further, the Company's measure of adjusted operating income (loss), adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similarly titled measures of other companies. Adjusted operating income (loss) and adjusted EBITDA on a consolidated basis is presented in the following table to reconcile the segment operating performance measure to operating income as presented on the unaudited Condensed Consolidated Statement of Income.

The accounting principles applied at the operating segment level in determining operating income (loss) are generally the same as those applied at the consolidated financial statement level. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation.

Reportable segment information is presented in the following table:



(In thousands, except percentage amounts)	Americas			International			Corporate			Reconciling Items₁			Consolidated Totals
Three Months Ended September 30, 2019
Sales to external customers	$	234,624		$	116,390		$	—		$	—		$	351,014
Intercompany sales	104,151			73,760			—			(177,911		)	—
Operating income													59,614
Restructuring charges (Note 4)													1,850
Currency exchange gains, net (Note 6)													(913		)
Product liability expense (Note 18)													1,730
Strategic transaction costs (Note 19)													952
Adjusted operating income (loss)	58,971			13,776			(9,514		)	—			63,233
Adjusted operating margin %	25.1		%	11.8		%
Depreciation and amortization													9,547
Adjusted EBITDA	65,342			16,854			(9,416		)	—			72,780
Adjusted EBITDA %	27.8		%	14.5		%
Nine Months Ended September 30, 2019
Sales to external customers	$	679,699		$	347,027		$	—		$	—		$	1,026,726
Intercompany sales	412,188			230,543			—			(642,731		)	—
Operating income													146,252
Restructuring charges (Note 4)													11,203
Currency exchange losses, net (Note 6)													17,338
Product liability expense (Note 18)													8,155
Strategic transaction costs (Note 19)													2,937
Adjusted operating income (loss)	171,463			39,888			(25,466		)	—			185,885
Adjusted operating margin %	25.2		%	11.5		%
Depreciation and amortization													28,339
Adjusted EBITDA	190,084			49,313			(25,173		)	—			214,224
Adjusted EBITDA %	28.0		%	14.2		%



(In thousands, except percentage amounts)	Americas			International			Corporate			Reconciling Items₁			Consolidated Totals
Three Months Ended September 30, 2018
Sales to external customers	$	209,343		$	121,753		$	—		$	—		$	331,096
Intercompany sales	33,877			82,852			—			(116,729		)	—
Operating income													40,003
Restructuring charges (Note 4)													2,615
Currency exchange gains, net (Note 6)													(252		)
Product liability expense (Note 18)													14,627
Strategic transaction costs (Note 19)													56
Adjusted operating income (loss)	51,532			13,329			(7,812		)	—			57,049
Adjusted operating margin %	24.6		%	10.9		%
Depreciation and amortization													9,378
Adjusted EBITDA	57,573			16,559			(7,705		)	—			66,427
Adjusted EBITDA %	27.5		%	13.6		%
Nine Months Ended September 30, 2018
Sales to external customers	$	633,812		$	362,508		$	—		$	—		$	996,320
Intercompany sales	104,520			249,745			—			(354,265		)	—
Operating income													131,235
Restructuring charges (Note 4)													10,223
Currency exchange losses, net (Note 6)													2,571
Product liability expense (Note 18)													25,469
Strategic transaction costs													208
Adjusted operating income (loss)	151,456			41,960			(23,710		)	—			169,706
Adjusted operating margin %	23.9		%	11.6		%
Depreciation and amortization													28,585
Adjusted EBITDA	169,691			52,001			(23,401		)	—			198,291
Adjusted EBITDA %	26.8		%	14.3		%

₁Reconciling items consist primarily of intercompany eliminations and items not directly attributable to reporting segments.

Total sales by product group was as follows:



Three Months Ended September 30, 2019	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Fixed Gas & Flame Detection	75,855		22%	42,953		18%	32,902		28%
Breathing Apparatus	71,312		20%	46,287		20%	$	25,025	22%
Portable Gas Detection	44,240		13%	30,305		13%	13,935		12%
Firefighter Helmets & Protective Apparel	42,804		12%	35,017		15%	7,787		7%
Industrial Head Protection	37,730		11%	29,217		12%	8,513		7%
Fall Protection	34,639		10%	22,972		10%	11,667		10%
Other	44,434		12%	27,873		12%	16,561		14%
Total	$	351,014	100%	$	234,624	100%	$	116,390	100%

Nine Months Ended September 30, 2019	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Breathing Apparatus	$	221,666	22%	$	147,776	22%	$	73,890	21%
Fixed Gas & Flame Detection	206,564		20%	115,001		17%	91,563		26%
Firefighter Helmets & Protective Apparel	135,181		13%	109,173		16%	26,008		7%
Portable Gas Detection	127,309		12%	85,763		13%	41,546		12%
Industrial Head Protection	112,395		11%	87,475		13%	24,920		7%
Fall Protection	96,396		9%	59,653		9%	36,743		11%
Other	127,215		13%	74,858		10%	52,357		16%
Total	$	1,026,726	100%	$	679,699	100%	$	347,027	100%



Three Months Ended September 30, 2018	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Breathing Apparatus	$	80,424	24%	$	50,282	24%	$	30,142	25%
Fixed Gas & Flame Detection	64,951		20%	33,803		16%	31,148		26%
Portable Gas Detection	39,405		12%	26,755		13%	12,650		10%
Industrial Head Protection	36,938		11%	28,909		14%	8,029		7%
Firefighter Helmets & Protective Apparel	35,821		11%	30,373		15%	5,448		4%
Fall Protection	27,939		8%	16,465		8%	11,474		9%
Other	45,618		14%	22,756		10%	22,862		19%
Total	$	331,096	100%	$	209,343	100%	$	121,753	100%

Nine Months Ended September 30, 2018	Consolidated			Americas			International
(In thousands, except percentages)	Dollars		Percent	Dollars		Percent	Dollars		Percent
Breathing Apparatus	$	230,324	23%	$	146,293	23%	$	84,031	23%
Fixed Gas & Flame Detection	189,482		13%	99,459		16%	90,023		25%
Firefighter Helmets & Protective Apparel	$	126,981	19%	102,906		16%	24,075		7%
Portable Gas Detection	122,939		12%	82,654		13%	40,285		11%
Industrial Head Protection	111,532		11%	87,901		14%	23,631		7%
Fall Protection	79,696		8%	45,668		7%	34,028		9%
Other	135,366		14%	68,931		11%	66,435		18%
Total	$	996,320	100%	$	633,812	100%	$	362,508	100%