5 unchanged sentences
Our outstanding debt bears interest at variable rates and accordingly is sensitive to changes in interest rates.
−Removed: Based upon the balances of the variable rate debt at October 31, 2020, a hypothetical 1.0% increase or decrease in interest rates could result in approximately $1.0 million of additional pre-tax charges or credit to our operating results.
+Added: Based upon the balances of the variable rate debt at October 31, 2021, a hypothetical 1.0% increase or decrease in interest rates could result in approximately $0.4 milli on of additional pre-tax charges or credit to our operating results.
This sensitivity pertains primarily to our outstanding revolving credit facility borrowings outstanding under the Credit Facility as of October 31, 2021.
2 unchanged sentences
From time to time, we enter into foreign exchange contracts associated with our operations to manage a portion of the foreign currency rate risk.
−Removed: Less than $0.1 million of foreign exchange derivatives were included in total assets as of October 31, 2019.
−Removed: There were no corresponding derivatives outstanding as of October 31, 2020.
+Added: There were no derivatives outstanding as of October 31, 2021 or 2020.
These foreign currency derivative contracts hedge cross-border intercompany and commercial activity for our insulating glass spacer business.
1 unchanged sentence
To the extent the gain or loss on the derivative instrument offsets the gain or loss from the remeasurement of the underlying foreign currency balance, changes in exchange rates should have no effect.
−Removed: During October 2018, we settled an unhedged foreign currency intercompany loan which facilitated the Liniar acquisition.
−Removed: For the year ended October 31, 2018, we realized a loss of less than $0.1 million related to this foreign currency exposure.
−Removed: Since the 2016 Brexit vote, the primary impact on Quanex’s financial performance has been related to foreign currency fluctuations of the British Pound Sterling.
−Removed: This fluctuation has driven foreign currency translation impacts, as well as raw material cost increases from upstream suppliers located outside of the U.K.
+Added: On June 23, 2016, citizens of the U.K.
+Added: voted to exit the European Union (E.U.) (referred to as Brexit).
+Added: Since the 2016 Brexit vote, we have been impacted by foreign currency fluctuations of the British Pound Sterling and delays within the supply chain for the procurement of raw materials.
+Added: These have caused fluctuations in foreign currency translation impacts, as well as raw material cost increases from upstream suppliers located outside of the U.K.
Commodity Price Risk
−Removed: We purchase polyvinyl resin (PVC) as the significant raw material consumed in the manufacture of vinyl extrusions.
−Removed: We have a monthly resin adjuster in place with a majority of our customers and our resin supplier that is adjusted based upon published industry indices for resin prices for the prior month.
−Removed: This adjuster effectively shares the base pass-through price changes of PVC with our customers commensurate with the market at large.
+Added: We purchase PVC as the significant raw material consumed in the manufacture of vinyl extrusions.
+Added: We have resin adjusters in place with a majority of our customers and our resin supplier that is adjusted based upon published indices for lagging resin prices.
+Added: These adjusters effectively share the base pass-through price changes of PVC with our customers commensurate with the market at large.
Our long-term exposure to changes in PVC prices is somewhat mitigated due to the contractual component of the resin adjuster program.
−Removed: In addition, there is a level of exposure to short-term volatility due to the one month lag.
−Removed: We have historically charged certain customers a surcharge related to petroleum-based raw materials.
−Removed: The surcharge was intended to offset the rising cost of products which are highly correlated to the price of oil including butyl and other oil-based raw materials.
−Removed: The surcharge is in place with the majority of our customers who purchase these products and is adjusted monthly based upon the 90-day average published price for Brent crude.
+Added: However, there is a level of exposure to short-term volatility due to timing lags.
+Added: We adjust the pricing of petroleum-based raw materials for the majority of our customers who purchase products using these materials.
+Added: This is intended to offset the fluctuating cost of products which are highly correlated to the price of oil including butyl and other oil-based raw materials.
+Added: This program is adjusted monthly based upon the 90-day average published price for Brent crude.
The oil-based raw materials that we purchase are subject to similar pricing schemes.
−Removed: As such, our long-term exposure to increases in oil-based raw material prices is significantly reduced under this surcharge program, but given the recent disruptions in the oil and gas market, we bear an obligation to repay customers for the fall in commodity price that is not reflected in the pricing of products sold to them.
−Removed: In March and October 2020, we sent a notice to our customers on this to address the mismatch.
+Added: As such, our long-term exposure to increases in oil-based raw material prices is significantly reduced under this program.
Similarly, NA Cabinet Components includes a price index provision in the majority of its customer arrangements to insulate against significant fluctuations in the price for various hardwood products used as the primary raw material for kitchen and bathroom cabinet doors.
Like our vinyl extrusion business, we are exposed to short-term volatility in wood prices due to a lag in the timing of price updates which generally could extend for up to three months.
−Removed: While we maintain surcharges and other adjusters to manage our exposure to changes in the prices of our critical raw materials, we use several commodities in our business that are not covered by contractual surcharges or adjusters for which pricing can fluctuate, including titanium dioxide (TiO2), silicone and other inputs.
+Added: We have begun implementing additional programs for other raw materials to facilitate more accurate pricing and reduce our exposure to changing material costs when necessary, however these are also subject to timing lags.
+Added: While we maintain surcharges and other adjusters to manage our exposure to changes in the prices of our critical raw materials, we use several commodities in our business that are not covered by contractual surcharges or adjusters for which pricing can fluctuate, including PVC compound micro ingredients, silicone and other inputs.
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.