Segment Information (Notes)

3 Months Ended

Jan. 31, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Information

We present three reportable business segments in accordance with ASC Topic 280-10-50, "Segment Reporting" (ASC 280): (1) North American Fenestration segment (NA Fenestration), comprising three operating segments primarily focused on the fenestration market in North America including vinyl profiles, insulating glass spacers, screens & other fenestration components; (2) European Fenestration segment (EU Fenestration), comprising our U.K.-based vinyl extrusion business, manufacturing vinyl profiles & conservatories, and the European insulating glass business manufacturing insulating glass spacers; and (3) North American Cabinet Components segment (NA Cabinet Components), comprising our cabinet door and components operations. We maintain an Unallocated Corporate & Other grouping which includes 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 relative share of revenue, 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, inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process. The accounting policies of our operating segments are the same as those used to prepare the accompanying condensed consolidated financial statements. Corporate general and administrative expense allocated during the three month period ended January 31, 2020 was $5.5 million and $4.8 million for the prior year comparable period.

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, 2020 and 2019, and total assets as of January 31, 2020 and October 31, 2019 are summarized in the following table (in thousands):

	NA Fenestration		EU Fenestration		NA Cabinet Comp.			Unallocated Corp. & Other			Total
Three Months Ended January 31, 2020
Net sales	$	110,452	$	36,766	$	50,044		$	(665	)	$	196,597
Depreciation and amortization	6,979		2,408		3,402			116			12,905
Operating income (loss)	1,631		3,164		(2,115		)	(700		)	1,980
Capital expenditures	6,928		1,219		1,075			90			9,312
Three Months Ended January 31, 2019
Net sales	$	109,049	$	35,254	$	53,853		$	(1,348	)	$	196,808
Depreciation and amortization	6,873		2,236		3,339			124			12,572
Operating income (loss)	1,843		2,781		(2,267		)	(4,807		)	(2,450		)
Capital expenditures	3,436		1,708		1,127			—			6,271
As of January 31, 2020
Total assets	$	247,396	$	219,133	$	181,746		$	18,925		$	667,200
As of October 31, 2019
Total assets	$	226,243	$	212,239	$	181,416		$	25,212		$	645,110

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the three months ended January 31, 2020 (in thousands):

	NA Fenestration		EU Fenestration		NA Cabinet Comp.		Unallocated Corp. & Other		Total
Balance as of October 31, 2019	$	38,712	$	67,704	$	39,147	$	—	$	145,563
Foreign currency translation adjustment	—		1,027		—		—		1,027
Balance as of January 31, 2020	$	38,712	$	68,731	$	39,147	$	—	$	146,590

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

We did not allocate non-operating loss or income tax benefit to the reportable segments. The following table reconciles operating income (loss) as reported above to net income (loss) for the three months ended January 31, 2020 and 2019:

	Three Months Ended
	January 31,
	2020			2019
	(In thousands)
Operating income (loss)	$	1,980		$	(2,450	)
Interest expense	(1,582		)	(2,442		)
Other, net	36			256
Income tax (expense) benefit	(424		)	987
Net income (loss)	$	10		$	(3,649	)