Segment Information

3 Months Ended

Jan. 31, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

We present three reportable business segments (1) 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) 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) NA Cabinet Components, comprising our cabinet door and components operations. We maintain an Unallocated Corporate & Other which includes transaction expenses, stock-based compensation, long-term incentive awards based on the performance of our common stock and other factors, certain severance, legal, and other costs not deemed to be allocable to all segments, depreciation of corporate assets, interest expense, other, net, income taxes and inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process. Other general and administrative costs associated with the corporate office are allocated to the reportable segments, based upon a relative measure of profitability in order to more accurately reflect each reportable business segment's administrative costs. We allocate corporate expenses to businesses acquired mid-year from the date of acquisition. 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, 2022 was $5.8 million, and $5.2 million for the comparable prior year period.

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, 2022 and 2021, and total assets as of January 31, 2022 and October 31, 2021 are summarized in the following table (in thousands):

	NA Fenestration		EU Fenestration		NA Cabinet Comp.		Unallocated Corp. & Other		Total
Three Months Ended January 31, 2022
Net sales	$	146,631	$	58,914	$	62,353	$	(858)	$	267,040
Depreciation and amortization	4,139		2,569		3,463		86		10,257
Operating income (loss)	12,151		7,815		(1,453)		(4,387)		14,126
Capital expenditures	5,305		954		1,073		38		7,370
Three Months Ended January 31, 2021
Net sales	$	128,116	$	49,091	$	53,994	$	(1,054)	$	230,147
Depreciation and amortization	5,111		2,518		3,270		116		11,015
Operating income (loss)	11,203		8,187		(13)		(7,542)		11,835
Capital expenditures	2,820		472		1,953		1		5,246
As of January 31, 2022
Total assets	$	282,033	$	229,515	$	179,410	$	27,314	$	718,272
As of October 31, 2021
Total assets	$	268,773	$	236,755	$	178,671	$	33,124	$	717,323

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the three months ended January 31, 2022 (in thousands):

	NA Fenestration		EU Fenestration		NA Cabinet Comp.		Unallocated Corp. & Other		Total
Balance as of October 31, 2021	$	38,712	$	71,346	$	39,147	$	—	$	149,205
Foreign currency translation adjustment	—		(1,412)		—		—		(1,412)
Balance as of January 31, 2022	$	38,712	$	69,934	$	39,147	$	—	$	147,793

For further details of Goodwill, see Note 3, “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 as reported above to net income for the three months ended January 31, 2022 and 2021 (in thousands):

	Three Months Ended
	January 31,
	2022		2021
Operating income	$	14,126	$	11,835
Interest expense	(523)		(751)
Other, net	54		192
Income tax expense	(2,418)		(3,424)
Net income	$	11,239	$	7,852