Segment Information (Notes)

3 Months Ended

Jan. 31, 2017

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Information

We present three reportable business segments in accordance with Topic 280-10-50, "Segment Reporting" (ASC 280): (1) North American Engineered Components segment (“NA Engineered Components”), comprised of four operating segments primarily focused on the fenestration market in North America including vinyl profiles, insulating glass (IG) spacers, screens & other fenestration components; (2) European Engineered Components segment (“EU Engineered Components”), comprised of our United Kingdom-based vinyl extrusion business, manufacturing vinyl profiles & conservatories, and the European insulating glass business manufacturing IG spacers; and (3) North American Cabinet Components segment (“NA Cabinet Components”), comprised solely of the North American cabinet door and components business acquired in November 2015. We maintain an Unallocated Corporate & Other grouping which includes LIFO inventory adjustments, corporate office charges, and inter-segment eliminations, less an allocation of a portion of the general and administrative costs associated with the corporate office which have been allocated to the reportable business segments, based upon a relative measure of profitability, in order to more accurately reflect each reportable business segment's administrative cost. Certain costs are not allocated to the reportable operating segments, but remain in Unallocated Corporate & Other, including transaction expenses, stock-based compensation, long-term incentive awards based on the performance of our common stock and other factors, certain severance and legal costs not deemed to be allocable to all segments, depreciation of corporate assets, interest expense, other, net, income taxes and inter-segment eliminations. The accounting policies of our operating segments are the same as those used to prepare the accompanying condensed consolidated financial statements. The following table summarizes corporate general and administrative expense allocated during the three-month periods ended January 31, 2017 and 2016:

	Three Months Ended
	January 31,
	2017		2016 (1)
	(In thousands)
NA Engineered Components	$	2,399	$	2,342
EU Engineered Components	872		851
NA Cabinet Components	1,090		1,064
Allocated general and administrative expense	$	4,361	$	4,257

⁽¹⁾ Amounts allocated to reportable segments for the three months ended January 31, 2016 include severance costs, which were not previously allocated when these results were presented during 2016. The impact was a decrease of approximately $0.1 million, 55% of which was attributable to NA Engineered Components, 20% attributable to EU Engineered Components, and 25% attributable to NA Cabinet Components. As a result, operating income (loss) by segment, as included below, reflects this change.

ASC Topic 280-10-50, “Segment Reporting” (ASC 280) permits aggregation of operating segments based on factors including, but not limited to: (1) similar nature of products serving the building products industry, primarily the fenestration business; (2) similar production processes, although there are some differences in the amount of automation amongst operating plants; (3) similar types or classes of customers, namely the primary OEMs; (4) similar distribution methods for product delivery, although the extent of the use of third-party distributors will vary amongst the businesses; (5) similar regulatory environment; and (6) converging long-term economic similarities.

Segment information for the three months ended January 31, 2017 and 2016, and total assets as of January 31, 2017 and October 31, 2016 are summarized in the following table (in thousands):

	NA Eng. Comp.		EU Eng. Comp.		NA Cabinet Comp.			Unallocated Corp. & Other			Total
Three Months Ended January 31, 2017
Net sales	$	111,073	$	31,569	$	52,997		$	(543	)	$	195,096
Depreciation and amortization	10,078		2,056		3,135			137			15,406
Operating income (loss)	301		2,203		(1,058		)	(5,287		)	(3,841		)
Capital expenditures	3,756		3,144		1,039			202			8,141
Three Months Ended January 31, 2016
Net sales	$	121,048	$	33,068	$	48,525		$	(1,173	)	$	201,468
Depreciation and amortization	7,208		2,458		3,145			159			12,970
Operating income (loss)	5,590		1,379		(1,257		)	(7,850		)	(2,138		)
Capital expenditures	5,353		2,253		974			72			8,652
As of January 31, 2017
Total assets	$	276,173	$	185,217	$	285,256		$	3,674		$	750,320
As of October 31, 2016
Total assets	$	290,725	$	190,995	$	287,012		$	11,621		$	780,353

The following table summarizes the change in the carrying amount of goodwill by segment for the three months ended January 31, 2017 (in thousands):

	NA Eng. Comp.		EU Eng. Comp.		NA Cabinet Comp.		Unalloc. Corp. & Other		Total
Balance as of October 31, 2016	$	38,712	$	64,576	$	113,747	$	—	$	217,035
Foreign currency translation adjustment	—		1,178		—		—		1,178
Balance as of January 31, 2017	$	38,712	$	65,754	$	113,747	$	—	$	218,213

For further details of Goodwill, see Note 4, "Goodwill & Intangible Assets", located herewith.

We did not allocate non-operating income (expense) or income tax expense to the reportable segments. The following table reconciles operating income (loss) as reported above to net loss for the three months ended January 31, 2017 and 2016:

	Three Months Ended
	January 31,
	2017			2016
	(In thousands)
Operating loss	$	(3,841	)	$	(2,138	)
Interest expense	(2,160		)	(6,491		)
Other, net	661			(2,361		)
Income tax benefit	1,614			3,741
Net loss	$	(3,726	)	$	(7,249	)

Product Sales

We produce a wide variety of products that are used in the fenestration industry, including: window and door systems; accessory trim profiles with real wood veneers and wood grain laminate finishes; window spacer systems; extruded vinyl products; metal fabrication; and astragals, thresholds and screens. In addition, we produce certain non-fenestration products, including kitchen and bath cabinet doors and components, flooring and trim moldings, solar edge tape, plastic decking, fencing, water retention barriers, conservatory roof components, and other products.

The following table summarizes our product sales for the three-month periods ended January 31, 2017 and 2016 into general groupings by segment to provide additional information to our shareholders.

	Three Months Ended
	January 31,
	2017			2016
	(In thousands)
NA Engineered Components:
United States - fenestration	$	92,400		$	101,773
International - fenestration	6,341			6,891
United States - non-fenestration	8,132			8,108
International - non-fenestration	4,200			4,276
	$	111,073		$	121,048
EU Engineered Components:
United States - fenestration	$	35		$	—
International - fenestration	28,905			30,010
International - non-fenestration	2,629			3,058
	$	31,569		$	33,068
NA Cabinet Components:
United States	$	52,390		$	47,870
International	607			655
	$	52,997		$	48,525
Unallocated Corporate & Other
Eliminations	$	(543	)	$	(1,173	)
	$	(543	)	$	(1,173	)
Net sales	$	195,096		$	201,468