GUARANTEES AND PRODUCT WARRANTIES

6 Months Ended

Apr. 30, 2025

GUARANTEES AND PRODUCT WARRANTIES

GUARANTEES AND PRODUCT WARRANTIES

10.    GUARANTEES AND PRODUCT WARRANTIES

From time to time, our subsidiaries guarantee third party payment obligations in connection with the sale of machines to customers that use financing. We follow FASB guidance for accounting for guarantees (codified in ASC 460 Guarantees). As of April 30, 2025, we had seven outstanding third party payment guarantees totaling approximately $0.8 million. The terms of these guarantees are consistent with the underlying customer financing terms. Upon shipment of a machine, the customer assumes the risk of ownership. The customer does not obtain title, however, until it has paid for the machine. A retention of title clause allows us to recover the machine if the customer defaults on the financing. We accrue liabilities under these guarantees at fair value, which amounts are insignificant.

We provide warranties on our products with respect to defects in material and workmanship. The terms of these warranties are generally one year for machines and shorter periods for service parts. We recognize an estimated liability with respect to this obligation at the time of product sale, with subsequent warranty claims recorded against the estimated liability. The amount of the warranty estimated liability is determined based on historical trend experience and any known warranty issues that could cause future warranty costs to differ from historical experience.

A reconciliation of the changes in our warranty estimated liability is as follows (in thousands):

	Six Months Ended
	April 30,
	2025		2024
Balance, beginning of period	$	1,086	$	1,294
Provision for warranties during the period		818		1,165
Charges to the estimated liability		(977)		(1,342)
Impact of foreign currency translation		9		4
Balance, end of period	$	936	$	1,121

The year-over-year decrease in our warranty estimated liability was primarily due to a lower sales volume of more complex, higher-performance machines.