What changed in this filing

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Item 1. Financial Statements

2022-06-03 compared with 2022-03-04 · 145 added, 76 removed, 407 unchanged (35% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Sales and service fees

1 unchanged sentence

Selling, general and administrative expenses

Operating income

Operating income (loss)

Interest expense

Interest income

Investment income, net

Other expense (income), net

Income before income taxes

Provision for income taxes

Income per common share

Investment income

Other income (expense), net

Income (loss) before income taxes

Provision (benefit) for income taxes

Net income (loss)

Income (loss) per common share

Weighted average common shares outstanding

5 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

Other comprehensive income (loss):

3 unchanged sentences

Total other comprehensive income (loss)

Comprehensive income

Comprehensive income (loss)

The accompanying notes are an integral part of the condensed consolidated financial statements.

44 unchanged sentences

no par value, $ .10 stated value per share, 12,500,000 shares authorized;

6,681,589 and 6,691,052 shares issued and 6,607,437 and 6,617,717 shares outstanding, as of January 31, 2022 and October 31, 2021, respectively

6,645,352 and 6,691,052 shares issued and 6,566,994 and 6,617,717 shares outstanding, as of April 30, 2022 and October 31, 2021, respectively

Additional paid-in capital

8 unchanged sentences

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities, net of acquisitions:

Provision for doubtful accounts

Deferred income taxes

Equity in (income) loss of affiliates

Equity in loss (income) of affiliates

Foreign currency (gain) loss

2 unchanged sentences

Stock–based compensation

Change in assets and liabilities:

Change in assets and liabilities, net of acquisitions:

(Increase) decrease in accounts receivable

1 unchanged sentence

(Increase) decrease in prepaid expenses

Increase (decrease) in accounts payable, net of related parties

Increase (decrease) in accounts payable

Increase (decrease) in customer deposits

Increase (decrease) in accrued expenses

Increase (decrease) in warranty expenses

Increase (decrease) in accrued payroll and employee benefits

22 unchanged sentences

(In thousands, except shares outstanding)

Three Months Ended April 30, 2022 and 2021

Comprehensive

Income (Loss)

Balances, October 31, 2020

Other comprehensive income

Balances, January 31, 2021

Net income (loss)

Other comprehensive income (loss)

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Dividends paid

Balances, April 30, 2021

Balances, January 31, 2022

Net income (loss)

Other comprehensive income (loss)

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Stock repurchases

Dividends paid

Balances, April 30, 2022

Six Months Ended April 30, 2022 and 2021

Comprehensive

Income (Loss)

Balances, October 31, 2020

Net income (loss)

Other comprehensive income (loss)

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Dividends paid

Balances, April 30, 2021

Balances, October 31, 2021

Net income (loss)

Other comprehensive income (loss)

Stock–based compensation expense, net of taxes withheld for vested restricted shares

Exercise of common stock options

1 unchanged sentence

Dividends paid

Balances, January 31, 2022

Balances, April 30, 2022

The accompanying notes are an integral part of the condensed consolidated financial statements.

9 unchanged sentences

We operate in the industrial equipment industry and have a global footprint that subjects us to various business risks in many different countries.

Our operating results during fiscal years 2020, 2021 and the first quarter of fiscal 2022 were affected by the international business disruption due to the outbreak of COVID-19, vendor delays, transportation issues, inflationary cost pressures, competitive labor markets, uncertainty surrounding the U.K.

Our operating results during fiscal years 2020, 2021 and the first six months of fiscal 2022 were affected by the international business disruption due to the outbreak of COVID-19 and continued lockdowns in certain markets, vendor delays, transportation issues, unusually high inflation, volatility of foreign currencies, competitive labor markets, uncertainty surrounding the U.K.

Brexit activities, and political friction in the U.S and many regions of the world.

Because of the potential for extended vulnerability, we have closely evaluated the estimates we have made in preparing the financial statements as of January 31, 2022, with the understanding that these estimates could change in the near term.

Because of the potential for extended vulnerability, we have closely evaluated the estimates we have made in preparing the financial statements as of April 30, 2022, with the understanding that these estimates could change in the near term.

We will continue to evaluate and disclose any uncertainty associated with key assumptions underlying fair value estimates, trends, and uncertainties that have had, or are reasonably expected to have, a material effect on our consolidated financial position, results of operations, changes in shareholders' equity, and cash flows for and at the end of each interim period.

The condensed financial information as of January 31, 2022 and for the three months ended January 31, 2022 and January 31, 2021 is unaudited.

The condensed financial information as of April 30, 2022 and for the three and six months ended April 30, 2022 and April 30, 2021 is unaudited.

However, in our opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our consolidated financial position, results of operations, changes in shareholders’ equity and cash flows for and at the end of the interim periods.

15 unchanged sentences

In most instances, where a machine is sold through a distributor, we have no installation involvement.

If sales are direct or through sales agents, we will typically complete the machine installation, which consists of the reassembly of certain parts that were removed for shipping and the re-testing of the machine to ensure that it is performing within the standard specifications.

We consider the machine installation process for our three-axis machines to be inconsequential and immaterial within the context of the contract.

8 unchanged sentences

We manage our exposure to these and other market risks through regular operating and financing activities.

Currently, the only risk that we manage through the use of derivative instruments is foreign currency risk, for which we enter into derivative instruments in the form of foreign currency forward exchange contracts with a few major financial institutions.

We enter into these forward exchange contracts to reduce the potential effects of foreign exchange rate movements on our net equity investment in one of our foreign subsidiaries, to reduce the impact on gross profit and net earnings from sales and purchases denominated in foreign currencies, and to reduce the impact on our net earnings of foreign currency fluctuations on receivables and payables denominated in foreign currencies that are different than the subsidiaries’ functional currency.

9 unchanged sentences

Dollar value of the inter-company sale or purchase being hedged.

The ineffective portion of gains and losses resulting from the changes in the fair value of these hedge contracts is immediately reported in Other expense (income), net.

The ineffective portion of gains and losses resulting from the changes in the fair value of these hedge contracts is immediately reported in Other income (expense), net.

We perform quarterly assessments of hedge effectiveness by verifying and documenting the critical terms of the hedge instrument and determining that forecasted transactions have not changed significantly.

We also assess on a quarterly basis whether there have been adverse developments regarding the risk of a counterparty default.

We had forward contracts outstanding as of January 31, 2022, denominated in Euros, Pounds Sterling and New Taiwan Dollars with set maturity dates ranging from February 2022 through January 2023.

We had forward contracts outstanding as of April 30, 2022, denominated in Euros, Pounds Sterling and New Taiwan Dollars with set maturity dates ranging from May 2022 through April 2023.

The contract amounts, expressed at forward rates in U.S.

Dollars at January 31, 2022, were $ 23.6 million for Euros, $ 8.8 million for Pounds Sterling and $ 31.4 million for New Taiwan Dollars.

At January 31, 2022, we had approximately $ 335,000 of gains, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive income (loss).

Dollars at April 30, 2022, were $ 24.7 million for Euros, $ 7.2 million for Pounds Sterling and $ 29.7 million for New Taiwan Dollars.

At April 30, 2022, we had approximately $ 295,000 of gains, net of tax, related to cash flow hedges deferred in Accumulated other comprehensive income (loss).

Included in this amount was $ 178,000 of unrealized gains, net of tax, related to cash flow hedge instruments that remain subject to currency fluctuation risk.

The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through January 2023, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

The majority of these deferred gains will be recorded as an adjustment to Cost of sales and service in periods through April 2023, when the corresponding inventory that is the subject of the related hedge contracts is sold, as described above.

We are also exposed to foreign currency exchange risk related to our investment in net assets in foreign countries.

4 unchanged sentences

This forward contract matures in November 2022.

As of January 31, 2022, we had a realized gain of $ 0.9 million and an unrealized gain of $ 68,000 , net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive income (loss) related to this forward contract.

As of April 30, 2022, we had a realized gain of $ 0.9 million and an unrealized gain of $ 0.2 million, net of tax, recorded as cumulative translation adjustments in Accumulated other comprehensive income (loss) related to this forward contract.

Derivatives Not Designated as Hedging Instruments

We also enter into foreign currency forward exchange contracts to protect against the effects of foreign currency fluctuations on inter-company receivables, payables and loans denominated in foreign currencies.

These derivative instruments are not designated as hedges under FASB guidance and, as a result, changes in their fair value are reported currently in Other expense (income), net in the Condensed Consolidated Statements of Operations consistent with the transaction gain or loss on the related receivables and payables denominated in foreign currencies.

We had forward contracts outstanding as of January 31, 2022, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from February 2022 through July 2022.

These derivative instruments are not designated as hedges under FASB guidance and, as a result, changes in their fair value are reported currently in Other income (expense), net in the Condensed Consolidated Statements of Operations consistent with the transaction gain or loss on the related receivables and payables denominated in foreign currencies.

We had forward contracts outstanding as of April 30, 2022, denominated in Euros, Pounds Sterling, and New Taiwan Dollars with set maturity dates ranging from May 2022 through July 2022.

The contract amounts, expressed at forward rates in U.S.

Dollars at January 31, 2022, totaled $ 38.8 million.

Dollars at April 30, 2022, totaled $ 38.2 million.

Fair Value of Derivative Instruments

We recognize the fair value of derivative instruments as assets and liabilities on a gross basis on our Condensed Consolidated Balance Sheets.

As of January 31, 2022 and October 31, 2021, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

January 31, 2022

As of April 30, 2022 and October 31, 2021, all derivative instruments were recorded at fair value on our Condensed Consolidated Balance Sheets as follows (in thousands):

April 30, 2022

October 31, 2021

16 unchanged sentences

Effect of Derivative Instruments on the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Operations

Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Operations, net of tax, during the three months ended January 31, 2022 and 2021 (in thousands):

Location of Gain

19 unchanged sentences

– Net investment

We did no t recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended January 31, 2022 or 2021.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended January 31, 2022 and 2021 on derivative instruments not designated as hedging instruments (in thousands):

We did no t recognize any gains or losses as a result of hedges deemed ineffective for either of the three months ended April 30, 2022 or 2021.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the three months ended April 30, 2022 and 2021 on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

6 unchanged sentences

Foreign exchange forward contracts

Other expense (income), net

The following table presents the changes in the components of Accumulated other comprehensive income (loss), net of tax, for the three months ended January 31, 2022 (in thousands):

Other income (expense), net

The following table presents the changes in the components of Accumulated other comprehensive income (loss), net of tax, for the three months ended April 30, 2022 (in thousands):

Foreign Currency

Balance, January 31, 2022

Other comprehensive income (loss) before reclassifications

Reclassifications

Balance, April 30, 2022

Derivative instruments had the following effects on our Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Changes in Shareholders’ Equity and Condensed Consolidated Statements of Operations, net of tax, during the six months ended April 30, 2022 and 2021 (in thousands):

Location of Gain

Amount of Gain

Amount of Gain (Loss)

(Loss) Reclassified

Recognized in Other

Comprehensive

Income (Loss)

Six Months Ended

Designated as Hedging Instruments:

(Effective Portion)

Foreign exchange forward contracts

– Intercompany sales/purchases

Cost of sales and service

Foreign exchange forward contract

– Net investment

We did not recognize any gains or losses as a result of hedges deemed ineffective for either of the six months ended April 30, 2022 or 2021.

We recognized the following gains and losses in our Condensed Consolidated Statements of Operations during the six months ended April 30, 2022 and 2021 on derivative instruments not designated as hedging instruments (in thousands):

Location of Gain

(Loss) Recognized

Amount of Gain (Loss)

in Operations

Recognized in Operations

Six Months Ended

Not Designated as Hedging Instruments:

Foreign exchange forward contracts

Other income (expense), net

The following table presents the changes in the components of Accumulated other comprehensive income (loss), net of tax, for the six months ended April 30, 2022 (in thousands):

Balance, October 31, 2021

1 unchanged sentence

Reclassifications

Balance, January 31, 2022

Balance, April 30, 2022

EQUITY INCENTIVE PLAN

In March 2016, we adopted the Hurco Companies, Inc.

2016 Equity Incentive Plan (the “2016 Equity Plan”), which allows us to grant awards of stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards.

2016 Equity Incentive Plan (as amended as described below, the “2016 Equity Plan”), which allows us to grant awards of stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards.

The 2016 Equity Plan replaced the Hurco Companies, Inc.

1 unchanged sentence

No further awards will be made under our 2008 Equity Plan.

The total number of shares of our common stock that may be issued pursuant to awards under the 2016 Equity Plan is 856,048 , which includes 386,048 shares remaining available for future grants under the 2008 Equity Plan as of March 10, 2016, the date our shareholders approved the 2016 Equity Plan.

The total number of shares of our common stock that may be issued pursuant to awards under the 2016 Equity Plan initially was 856,048 , which included 386,048 shares remaining available for future grants under the 2008 Equity Plan as of March 10, 2016, the date our shareholders approved the 2016 Equity Plan.

On March 10, 2022, our shareholders approved the Amended and Restated Hurco Companies, Inc.

2016 Equity Incentive Plan, which, among other items, increased the aggregate number of shares that may be issued under the 2016 Equity Plan by 850,000 shares.

The Compensation Committee of our Board of Directors has the authority to determine the officers, directors and key employees who will be granted awards under the 2016 Equity Plan;

5 unchanged sentences

The market value of a share of our common stock, for purposes of the 2016 Equity Plan, is the closing sale price as reported by the Nasdaq Global Select Market on the date in question or, if not a trading day, on the last preceding trading date.

A summary of stock option activity for the three-month period ended January 31, 2022, is as follows:

A summary of stock option activity for the six-month period ended April 30, 2022, is as follows:

Weighted Average

5 unchanged sentences

Options cancelled

Outstanding at January 31, 2022

Summarized information about outstanding stock options as of January 31, 2022, that have already vested and are currently exercisable, are as follows:

Outstanding at April 30, 2022

Summarized information about outstanding stock options as of April 30, 2022, that have already vested and are currently exercisable, are as follows:

Options Already Vested and

4 unchanged sentences

Intrinsic value of outstanding options

The intrinsic value of an outstanding stock option is calculated as the difference between the stock price as of January 31, 2022 and the exercise price of the option.

The intrinsic value of an outstanding stock option is calculated as the difference between the stock price as of April 30, 2022 and the exercise price of the option.

On March 10, 2022, the Compensation Committee granted a total of 13,914 shares of time-based restricted stock to our non-employee directors.

The restricted shares vest in full one year from the date of grant provided the recipient remains on the board of directors through that date.

The grant date fair value of the restricted shares was based on the closing sales price of our common stock on the grant date, which was $ 34.49 per share.

On January 4, 2022, the Compensation Committee approved a long-term incentive compensation arrangement for our executive officers in the form of time-based restricted shares and performance stock units (“PSUs”) under the 2016 Equity Plan, which will be payable in shares of our common stock if earned and vested.

15 unchanged sentences

The grant date fair value of the restricted shares was based upon the closing sales price of our common stock on the date of grant, which was $ 33.99 per share.

A reconciliation of our restricted stock and PSU activity and related information for the three-month period ended January 31, 2022 is as follows:

A reconciliation of our restricted stock and PSU activity and related information for the six-month period ended April 30, 2022 is as follows:

Weighted Average Grant

6 unchanged sentences

Shares withheld

Unvested at January 31, 2022

During the first three months of fiscal 2022 and 2021, we recorded approximately $ 0.8 million and $ 0.7 million, respectively, of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of January 31, 2022, there was an estimated $ 5.9 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal 2025.

Unvested at April 30, 2022

During the first six months of fiscal 2022 and 2021, we recorded approximately $ 1.6 million and $ 1.4 million, respectively, of stock-based compensation expense related to grants under the 2016 Equity Plan.

As of April 30, 2022, there was an estimated $ 5.4 million of total unrecognized stock-based compensation cost that we expect to recognize by the end of the first quarter of fiscal 2025.

EARNINGS PER SHARE

1 unchanged sentence

The computation of basic and diluted net income per share is determined using net income applicable to common shareholders as the numerator and the number of shares outstanding as the denominator as follows (in thousands, except per share amounts):

(in thousands, except per share amounts)

Undistributed earnings allocated to participating shares

Net income applicable to common shareholders

Three Months Ended

Six Months Ended

Net income (loss)

Undistributed earnings (loss) allocated to participating shares

Net income (loss) applicable to common shareholders

Weighted average shares outstanding

Stock options and contingently issuable securities

Income per share

Income (loss) per share

ACCOUNTS RECEIVABLE

Accounts receivable are net of allowances for doubtful accounts of $ 1.6 million as of January 31, 2022 and $ 1.6 million as of October 31, 2021.

Accounts receivable are net of allowances for doubtful accounts of $ 1.5 million as of April 30, 2022 and $ 1.6 million as of October 31, 2021.

Inventories, priced at the lower of cost (first-in, first-out method) or net realizable value, are summarized below (in thousands):

11 unchanged sentences

In accordance with ASC 842, we record a right-of-use asset and lease liability on our Condensed Consolidated Balance Sheets for all leases that, at the commencement date, have a lease term of more than 12 months and are classified as operating leases.

We recorded total operating lease expense of $ 1.3 million for each of the three months ended January 31, 2022 and 2021, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

We recorded total operating lease expense of $ 2.6 million for each of the six months ended April 30, 2022 and 2021, which is classified within Cost of sales and service and Selling, general and administrative expenses within the Condensed Consolidated Statements of Operations.

Operating lease expense includes short-term leases and variable lease payments which are immaterial.

There have been no lease costs capitalized on the Condensed Consolidated Balance Sheets as of January 31, 2022.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the three months ended January 31, 2022 (in thousands):

Three Months Ended

January 31, 2022

There have been no lease costs capitalized on the Condensed Consolidated Balance Sheets as of April 30, 2022.

The following table summarizes supplemental cash flow information and non-cash activity related to operating leases for the six months ended April 30, 2022 (in thousands):

Six Months Ended

April 30, 2022

Operating cash flow information:

2 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of January 31, 2022 (in thousands):

The following table summarizes the maturities of undiscounted cash flows of lease commitments reconciled to the total lease liability as of April 30, 2022 (in thousands):

Remainder of 2022

2 unchanged sentences

Present value of operating lease liabilities

As of January 31, 2022, the weighted-average remaining term of our lease portfolio was approximately 3.7 years and the weighted-average discount rate was approximately 1.7 %.

As of April 30, 2022, the weighted-average remaining term of our lease portfolio was approximately 3.6 years and the weighted-average discount rate was approximately 1.8 %.

SEGMENT INFORMATION

8 unchanged sentences

We follow FASB guidance for accounting for guarantees (codified in ASC 460).

As of January 31, 2022, we had eight outstanding third party payment guarantees totaling approximately $ 0.8 million.

As of April 30, 2022, we had eight outstanding third party payment guarantees totaling approximately $ 0.8 million.

The terms of these guarantees are consistent with the underlying customer financing terms.

8 unchanged sentences

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

Three Months Ended

Six Months Ended

Balance, beginning of period

Provision for warranties during the year

Provision for warranties during the period

Charges to the reserve

21 unchanged sentences

As uncommitted facilities, both the Taiwan and China credit facilities are subject to review and termination by the respective underlying lending institution from time to time.

As a result, as of January 31, 2022, our existing credit facilities consisted of the € 1.5 million revolving credit facility in Germany, the 150 million New Taiwan Dollars Taiwan credit facility, the 32.5 million Chinese Yuan China credit facility and the $ 40.0 million revolving credit facility under the 2018 Credit Agreement.

As of January 31, 2022, there were no borrowings under any of our credit facilities and there was approximately $ 52.2 million of available borrowing capacity thereunder.

Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income that includes jurisdictions with differing tax rates, conditional reduced tax rates, and other events that are not consistent from period to period, such as changes in income tax laws.

We recorded an income tax expense for the first three months of fiscal 2022 of $ 1.6 million compared to $ 0.5 million for the same period in 2021.

Our effective tax rate for the first three months of fiscal 2022 was 32 %, compared to 45 % in the corresponding prior year period.

The decrease in the effective tax rate was primarily due to changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, various discrete tax items, and changes in income tax laws to address the unfavorable impact of the COVID-19 pandemic.

Our unrecognized tax benefits were $ 202,000 as of January 31, 2022, and $ 198,000 as of October 31, 2021, and in each case included accrued interest.

As a result, as of April 30, 2022, our existing credit facilities consisted of the € 1.5 million revolving credit facility in Germany, the 150 million New Taiwan Dollars Taiwan credit facility, the 32.5 million Chinese Yuan China credit facility and the $ 40.0 million revolving credit facility under the 2018 Credit Agreement.

As of April 30, 2022, there were no borrowings under any of our credit facilities and there was approximately $ 51.6 million of available borrowing capacity thereunder.

Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates, and other events that are not consistent from period to period, such as changes in income tax laws.

We recorded an income tax expense for the first six months of fiscal 2022 of $ 2.5 million compared to $ 1.5 million for the same period in 2021.

Our effective tax rate for the first six months of fiscal 2022 was 31 %, compared to 33 % in the corresponding prior year period.

The year-over-year decrease in the effective tax rate was primarily due to changes in geographic mix of income and loss that includes jurisdictions with differing tax rates, various discrete tax items, and changes in income tax laws to address the unfavorable impact of the COVID-19 pandemic.

Our unrecognized tax benefits were $ 205,000 as of April 30, 2022, and $ 198,000 as of October 31, 2021, and in each case included accrued interest.

We recognize accrued interest and penalties related to unrecognized tax benefits as components of income tax expense.

As of January 31, 2022, the gross amount of interest accrued, reported in Accrued expenses, was approximately $ 32,000 , which did not include the federal tax benefit of interest deductions.

As of April 30, 2022, the gross amount of interest accrued, reported in Accrued expenses, was approximately $ 34,000 , which did not include the federal tax benefit of interest deductions.

federal and state income tax returns, as well as tax returns in several foreign jurisdictions.

7 unchanged sentences

and Level 3, defined as unobservable inputs in which little or no market data exist, therefore requiring an entity to develop its own assumptions.

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of January 31, 2022 and October 31, 2021 (in thousands):

January 31, 2022

In accordance with this guidance, the following table represents the fair value hierarchy for our financial assets and liabilities measured at fair value as of April 30, 2022 and October 31, 2021 (in thousands):

April 30, 2022

October 31, 2021

January 31, 2022

April 30, 2022

October 31, 2021

6 unchanged sentences

We have derivative financial instruments in the form of foreign currency forward exchange contracts as described in Note 3 of Notes to the Condensed Consolidated Financial Statements.

Dollar equivalent notional amounts of these contracts was $ 107.5 million and $ 94.6 million at January 31, 2022 and October 31, 2021, respectively.

Dollar equivalent notional amounts of these contracts was $ 108.5 million and $ 94.6 million at April 30, 2022 and October 31, 2021, respectively.

The fair value of our foreign currency forward exchange contracts and the related currency positions are subject to offsetting market risk resulting from foreign currency exchange rate volatility.

22 unchanged sentences

This standard did not have a significant effect on our accounting policies or on our consolidated financial statements and related disclosures.

There have been no other significant changes in the Company’s critical accounting policies and estimates during the three months ended January 31, 2022.

There have been no other significant changes in the Company’s critical accounting policies and estimates during the six months ended April 30, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements