Leases

12 Months Ended

Oct. 31, 2025

We recognize a right-of-use (ROU) asset and lease liability for each operating and finance lease with a contractual term greater than 12 months at the time of lease inception. We include ROU assets and lease liabilities for leases that exist within other contracts. Leases with an original term of 12 months or less are not recognized on the balance sheet, and the rent expense related to those short-term leases is recognized over the lease term. We do not account for lease and non-lease (e.g. common area maintenance) components of contracts separately for any underlying asset class.

We lease certain manufacturing plants, warehouses, office space, vehicles and equipment under finance and operating leases. Lease commencement occurs on the date we take possession or control of the property or equipment. Original terms for our real estate-related leases are generally between five and twenty years. Original terms for equipment-related leases, primarily manufacturing equipment and vehicles, are generally between one and ten years. Some of our leases also include rental escalation clauses. Renewal options are included in the determination of lease payments when management determines the options are reasonably certain of exercise, considering financial performance, strategic importance and/or invested capital.

If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. When the implicit rate is not determinable, our estimated incremental borrowing rate is utilized, determined on a collateralized basis, to discount lease payments based on information available at lease commencement.

Total lease costs recorded include fixed operating lease costs and variable lease costs. Most of our real estate leases require we pay certain expenses, such as common area maintenance costs, of which the fixed portion is included in operating lease costs. We recognize operating lease costs on a straight-line basis over the lease term. In addition to the above costs, variable lease costs are recognized when probable and are not included in determining the present value of our lease liability.

The ROU asset is measured at the initial amount of the lease liability (calculated as the present value of lease payments over the term of the lease) adjusted for lease payments made at or before the lease commencement date and initial direct costs. For operating leases, ROU assets are reduced over the lease term by the recognized straight-line lease expense less the amount of accretion of the lease liability determined using the effective interest method. For finance leases, ROU assets are amortized on a straight-line basis over the shorter of the useful life of the leased asset or the lease term. Interest expense on each finance lease liability is recognized utilizing the effective interest method. ROU assets are tested for impairment in the same manner as long-lived assets and we determined there have been no triggering events for impairment. Additionally, we monitor for events or changes in circumstances that may require a reassessment of one of our leases and determine if a remeasurement is required.

The table below presents the lease-related assets and liabilities recorded on the balance sheet at October 31, 2025 and 2024 (in thousands):


		October 31,
Leases	Classification	2025		2024
Assets
Operating lease assets	Operating lease right-of-use assets	$	154,866	$	126,715
Finance lease assets	Property, plant and equipment (less accumulated depreciation of $15,680 and $10,362)	72,275		67,046
Total lease assets		$	227,141	$	193,761

Liabilities
Current
Operating	Current operating lease liabilities	$	15,446	$	12,475
Finance	Current maturities of long-term debt	4,477		3,688
Noncurrent
Operating	Noncurrent operating lease liabilities	145,459		117,560
Finance	Long-term debt	56,256		56,988
Total lease liabilities		$	221,638	$	190,711

The table below presents the components of lease costs for the year ended October 31, 2025 and 2024 (in thousands):


	Year Ended October 31,
	2025		2024
Operating lease cost	$	23,758	$	13,074
Finance lease cost
Amortization of leased assets	4,970		3,915
Interest on lease liabilities	2,934		2,599
Variable lease costs	3,441		2,450
Total lease cost	$	35,103	$	22,038

The table below presents supplemental cash flow information related to leases for the year ended October 31, 2025 and 2024 (in thousands):


	Year Ended October 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Finance leases - financing cash flows	$	4,026	$	3,068
Finance leases - operating cash flows	$	2,934	$	2,599
Operating leases - operating cash flows	$	21,077	$	11,731

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	43,121	$	89,796
Finance leases	$	2,901	$	8,507

The table below presents the weighted average remaining lease terms and weighted average discount rates for the Company's leases as of October 31, 2025 and 2024:


	October 31,
	2025		2024
Weighted average remaining lease term (in years)
Operating leases	11.2		11.5
Financing leases	15.1		16.3

Weighted average discount rate
Operating leases	5.64	%	5.31	%
Financing leases	4.92	%	4.84	%

The table below presents the maturity of the lease liabilities as of October 31, 2025 (in thousands):


	Year ended October 31, 2025
	Operating Leases		Finance Leases
2026	$	23,884	$	7,323
2027	21,242		7,173
2028	19,576		6,830
2029	18,314		6,498
2030	16,982		6,146
Thereafter	120,209		51,637
Total lease payments	220,207		85,607
Less: present value discount	59,302		24,874
Total lease liabilities	$	160,905	$	60,733