XML 45 R26.htm IDEA: XBRL DOCUMENT v3.6.0.2
Information on Business Segments
 12 Months Ended
Dec. 31, 2016
Information on Business Segments

18.    Information on Business Segments

We report our operating segments based on how operating results are regularly reviewed by our chief operating decision maker for making decisions about resource allocations to segments and assessing performance. The Company’s operating segments and types of products from which each segment derives revenues are described below.

The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names including Aristokraft, Mid-Continent, Diamond, Kitchen Classics, Kitchen Craft, Schrock, Omega, Homecrest, Thomasville, StarMark and Ultracraft. In addition, cabinets are distributed under the Thomasville Cabinetry brand names. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals predominantly under the Moen, Riobel, ROHL, Perrin & Rowe and Waste King brands. The Doors segment includes residential fiberglass and steel entry door systems under the Therma-Tru brand name and urethane millwork product lines under the Fypon brand name. The Security segment includes locks, safety and security devices and electronic security products under the Master Lock brand name and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name. Corporate expenses consist of headquarters administrative expenses and defined benefit plans costs, primarily interest costs and expected return on plan assets, as well as actuarial gains and losses arising from periodic remeasurement of our liabilities. Corporate assets consist primarily of cash.

 

The Company’s subsidiaries operate principally in the United States, Canada, Mexico, China and Western Europe.

 

       
(In millions)    2016      2015      2014  

Net sales:

         

Cabinets

    $ 2,397.8       $ 2,173.4       $ 1,787.5   

Plumbing

      1,534.4         1,414.5         1,331.0   

Doors

      473.0         439.1         413.9   

Security

      579.7         552.4         481.2   

Net sales

    $ 4,984.9       $ 4,579.4       $ 4,013.6   

Net sales to two of the Company’s customers, The Home Depot, Inc. (“The Home Depot”) and Lowe’s Companies, Inc. (“Lowe’s”) each accounted for greater than 10% of the Company’s net sales in 2016, 2015 and 2014. All segments sell to both The Home Depot and Lowe’s. Net sales to The Home Depot were 13%, 14% and 15% of net sales in 2016, 2015 and 2014, respectively. Net sales to Lowe’s were 14%, 14% and 14% of net sales in 2016, 2015 and 2014, respectively.

 

       
(In millions)    2016      2015      2014  
     

Operating income:

         

Cabinets

    $ 257.8       $ 192.4       $ 137.9   

Plumbing

      326.3         285.4         258.9   

Doors

      61.9         44.0         29.2   

Security

      66.6         55.9         49.4   

Less: Corporate expenses(a)

      (79.9 )       (81.6 )       (71.9 ) 

Operating income

 

    $ 632.7       $ 496.1       $ 403.5   

(a)    Below is a table detailing Corporate expenses:

             

General and administrative expense

    $ (80.9 )     $ (70.1 )     $ (67.0 ) 

Defined benefit plan income

      2.9         6.1         8.8   

Recognition of defined benefit plan actuarial losses

      (1.9 )       (2.5 )       (13.7 ) 

Norcraft transaction costs(b)

      —         (15.1 )       —   

Total Corporate expenses

    $ (79.9 )     $ (81.6 )     $ (71.9 ) 

 

(b)

Representing external costs directly related to the acquisition of Norcraft and primarily includes expenditures for banking, legal, accounting and other similar services.
       
(In millions)    2016      2015      2014  

Total assets:

             

Cabinets

    $ 2,349.4      $ 2,364.0      $ 1,603.6  

Plumbing

      1,626.8        1,341.4        1,270.2  

Doors

      480.6        483.9        459.3  

Security

      514.5        520.7        528.5  

Corporate

      157.2        165.7        109.3  

Continuing operations

      5,128.5        4,875.7        3,970.9  

Discontinued operations

      —        —        80.6  

Total assets

    $ 5,128.5      $ 4,875.7      $ 4,051.5  
   

Depreciation expense:

             

Cabinets

    $ 40.1      $ 38.1      $ 31.0  

Plumbing

      24.6        21.3        18.5  

Doors

      9.0        11.2        11.7  

Security

      17.2        19.5        10.0  

Corporate

      3.7        3.4        2.0  

Continuing operations

      94.6        93.5        73.2  

Discontinued operations

      —        —        9.7  

Depreciation expense

    $ 94.6      $ 93.5      $ 82.9  
   

Amortization of intangible assets:

             

Cabinets

    $ 18.4      $ 14.3      $ 8.0  

Plumbing

      3.6        1.2        —  

Doors

      3.8        3.8        3.8  

Security

      2.3        2.3        1.3  

Continuing operations

      28.1        21.6        13.1  

Discontinued operations

      —        —        2.8  

Amortization of intangible assets

    $ 28.1      $ 21.6      $ 15.9  
   

Capital expenditures:

             

Cabinets

    $ 61.7      $ 61.3      $ 64.0  

Plumbing

      48.3        27.2        25.8  

Doors

      12.9        13.3        10.9  

Security

      25.9        17.3        16.2  

Corporate

      0.5        9.4        4.8  

Continuing operations

      149.3        128.5        121.7  

Discontinued operations

      —        —        5.8  

Capital expenditures, gross

      149.3        128.5        127.5  

Less: proceeds from disposition of assets

      (3.9 )       (2.5 )       (0.7 ) 

Capital expenditures, net

    $ 145.4      $ 126.0      $ 126.8  
   

Net sales by geographic region(a):

             

United States

    $ 4,258.5      $ 3,892.9      $ 3,313.1  

Canada

      406.4        385.1        405.8  

China and other international

      320.0        301.4        294.7  

Net sales

    $ 4,984.9      $ 4,579.4      $ 4,013.6  
   

Property, plant and equipment, net(b):

             

United States

    $ 499.8      $ 498.9      $ 429.1  

Mexico

      90.8        74.2        72.5  

Canada

      45.5        39.4        28.4  

China and other international

      26.4        15.4        9.8  

Property, plant and equipment, net

    $ 662.5      $ 627.9      $ 539.8  

 

(a)

Based on country of destination

 

(b)

Purchases of property, plant and equipment not yet paid for as of December 31, 2016, 2015 and 2014 were $11.9 million, $20.0 million and $4.2 million, respectively.