What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-06-03 compared with 2022-03-04 · 139 added, 80 removed, 137 unchanged (62% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of January 31, 2022, and for the three months ended January 31, 2022 and 2021, included elsewhere herein.

The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of April 30, 2022, and for the three and six months ended April 30, 2022 and 2021, included elsewhere herein.

For additional information pertaining to our business, including risk factors which should be considered before investing in our common stock, refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.

19 unchanged sentences

Recent Transactions and Events

and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.

Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

On March 11, 2020, the WHO declared the outbreak of COVID-19 to be a global pandemic and recommended containment and mitigation measures.

3 unchanged sentences

The COVID-19 pandemic and its related effects continue to have a significant adverse effect on many sectors of the economy and we may be further impacted.

As part of our response to the COVID-19 pandemic, we have taken the following measures:

• We are continuing to provide our products to support critical infrastructure needs while following national, state, and local guidelines required to continue operations during the existence of the pandemic and related local declarations of emergency.

However, local or regional hotspots of the pandemic could result in other locations being temporarily idled

due to the need to deep clean areas where an employee who has tested positive for COVID-19 worked or any similar impacts in our supply chain.

We work with our customers to the extent idling affects fulfillment timing.

• We have taken precautionary measures intended to help minimize the risk of the virus to our employees by implementing social distancing, sanitizing the workspace, and requiring employees to report any COVID-19 symptoms to ensure safety as infection surges dictate.

• We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations.

In these circumstances, there may be developments outside our control requiring us to adjust our operating plan.

The war in Ukraine and the impact of COVID-19 on the global economy including inflation and the price of raw materials, supply chain disruptions, and the volatility in interest rates including home mortgage rates are unpredictable and there may be developments outside our control requiring us to adjust our operating plan.

Market Overview and Outlook

4 unchanged sentences

residential wood cabinet demand.

In January 2022, the NAHB forecasted calendar-year housing starts to be 1.6 million for the 2022 and 2023 calendar-years.

In February 2022, the Ducker forecast indicated that total window shipments are expected to increase approximately 9% for calendar-year 2021 and approximately 6% in 2022 and 2% in 2023.

The estimated increase in window shipments for the year ended December 31, 2022 includes an increase in new construction shipments of approximately 5% and an increase in R&R shipments of approximately 6%.

In February 2022, Catalina Research estimated that residential semi-custom cabinet demand in the U.S.

is estimated to increase 9% in 2021 and 4% in 2022.

In May 2022, the NAHB forecasted calendar-year housing starts to be 1.7 million in 2022 and 1.6 million in both 2023 and 2024 calendar-years.

In May 2022, the Ducker forecast indicated that total window shipments are expected to increase approximately 5% for calendar-year 2022 and 2% in 2023.

The estimated increase in window shipments for the year ended December 31, 2022 includes an increase in both new construction shipments and R&R shipments of approximately 5%.

In May 2022, Catalina Research estimated that residential semi-custom cabinet demand in the U.S.

is estimated to increase 2% in 2022.

Several commodities in our business are subject to pricing fluctuations, including polyvinyl resin (PVC), titanium dioxide (TiO2), petroleum products, aluminum and wood.

3 unchanged sentences

In addition, some of these commodities, such as silicone, are in high demand, particularly in Europe, which can affect the cost of the raw materials, a portion of which we may not be able to fully recover.

On June 23, 2016, citizens of the U.K.

voted to exit the European Union (E.U.) (referred to as Brexit).

In October 2019, the U.K.

ratified a withdrawal agreement, and subsequently the U.K.

left the E.U.

on January 31, 2020.

rules for trade, travel, and business for the U.K.

lapsed on December 31, 2020.

In early 2021, the U.K.

agreed on a 100% tariff liberalization trade agreement.

There will be no tariffs or quotas on the movement of goods produced between the U.K.

During this settling in period we could experience extended lead times for raw material imports.

Given the lack of comparable precedent, it is difficult for us to predict the future impacts on our U.K.

based operations, which accounted for approximately 20% of our total sales for the year ended October 31, 2021.

Since we manufacture and sell a majority of our U.K.

products within the U.K., there is minimal risk to our ability to physically deliver goods and complete sales.

The primary risk mitigation focus for our U.K.

operations centers on the availability and pricing of raw materials.

While we source the majority of our raw materials from within the U.K., many of the primary upstream raw materials our vendors use are being sourced from outside of the U.K., which could expose us to cross-border issues and raw material price impacts.

We will mitigate this potential impact of Brexit on the import of goods to the U.K.

by strategically managing our inventory levels and logistical channels.

The global economy remains uncertain due to currency devaluations, political unrest, terror threats, global pandemics such as COVID-19, and even the political landscape in the U.S.

1 unchanged sentence

We continue to monitor our exposure to changes in exchange rates.

Three Months Ended January 31, 2022 Compared to Three Months Ended January 31, 2021

Three Months Ended January 31,

Results of Operations

Three Months Ended April 30, 2022 Compared to Three Months Ended April 30, 2021

Three Months Ended April 30,

2022 2021 Change $ % Variance

12 unchanged sentences

NA Fenestration

Three Months Ended January 31,

Three Months Ended April 30,

2022 2021 $ Change % Variance

6 unchanged sentences

Operating income margin 12 % 11 %

Net sale s increased $18.5 million, or 14%, for the three months ended January 31, 2022 compared to the same period in 2021, which was primarily driven by an increase in price and raw material surcharges of $10.6 million and a $7.9 million increase in volumes.

Net sales increased $31.7 million, or 22%, for the three months ended April 30, 2022 compared to the same period in 2021, which was primarily driven by an increase in price and raw material surcharges of $21.5 million and a $10.2 million increase in volumes.

Cost of Sales.

The cost of sales increased $16.6 million, or 17%, for the three months ended January 31, 2022 as compared to the same period in 2021.

The cost of sales increased $25.1 million, or 22%, for the three months ended April 30, 2022 compared to the same period in 2021.

Cost of sales, including labor, increased primarily due to higher volumes during the period as well as the inflation of raw materials.

Selling, General and Administrative.

S elling, general and administrative expenses increased $2.0 million, or 16%, for the three months ended January 31, 2022 as compared to the same period in 2021.

This increase was due primarily to higher professional fees and compensation year-over-year.

S elling, general and administrative expenses increased $0.9 million, or 7%, for the three months ended April 30, 2022 compared to the sam e period in 2021, primarily due to increased general expenses year-over-year.

Depreciation and Amortization.

Depreciation and amortization expense decreased $1.0 million, or 20%, for the three months ended January 31, 2022 as compared to the same period in 2021, reflecting the run-off of depreciation expense related to existing assets and disposals during the period.

Depreciation and amortization expense decreased $0.8 million for the three months ended April 30, 2022 compared to the same period in 2021, reflecting the run-off of depreciation expense related to existing assets and disposals during the period.

EU Fenestration

Three Months Ended January 31,

Three Months Ended April 30,

2022 2021 $ Change % Variance

6 unchanged sentences

Operating income margin 17 % 17 %

Net sales increased $9.8 million, o r 20%, comparing the three months ended January 31, 2022 to the same period in 2021, which was primarily driven by a $8.7 million increase in volumes, including a recovery from prior year COVID-19 impacts, and $1.7 million of base price increases partially offset by $0.6 million of foreign currency rate changes.

Net sales increased $11.8 million, or 19%, for the three months ended April 30, 2022 compared to the same period in 2021, which was primarily driven by $14.8 million of base price increases and a $0.3 million increase in volumes partially offset by $3.3 million of foreign currency rate changes.

Cost of Sales.

The cost of sales increased $9.4 million, or 30%, for the three months ended January 31, 2022 compared to the same period in 2021.

The cost of sales increased $8.3 million, or 20%, for the three months ended April 30, 2022 compared to the same period in 2021.

Cost of sales, including labor, increased primarily due to higher volumes during the period as well as the inflation of raw materials.

Selling, General and Administrative.

Selling, general and administrative expense increased $1.2 million, or 16%, for the three months ended April 30, 2022 compared to the same period in 2021.

The increase is primarily due to higher compensation, general expenses and foreign currency impacts year-over-year.

NA Cabinet Components

Three Months Ended April 30,

2022 2021 $ Change Variance %

(Dollars in millions)

Net sales $ 72.9 $ 63.6 $ 9.3 15%

Cost of sales (excluding depreciation and amortization) 63.2 55.1 8.1 (15)%

Selling, general and administrative 5.3 5.3 — —%

Depreciation and amortization 3.8 3.3 0.5 (15)%

Operating income (loss) $ 0.6 $ (0.1) $ 0.7 700%

Operating income (loss) margin 1 % — %

N et sales increased $9.3 million, or 15%, for the three months ended April 30, 2022 compared to the same period in 2021, which was driven by an increase in price and raw material indexes of $18.3 million partially offset by a $9.0 million decrease in volumes due to labor and material shortages throughout the supply chain.

Cost of Sales .

Cost of sales increased $8.1 million, or 15%, for the three months ended April 30, 2022 compared to the same period in 2021.

Cost of sales increased primarily due to rising lumber prices, which are recovered on a lag, partially offset by lower volumes during the period.

Selling, General and Administrative .

Selling, general and administrative expense was similar to the three months ended April 30, 2022 compared to the same period in 2021.

Unallocated Corporate & Other

Three Months Ended April 30,

2022 2021 $ Change Variance %

(Dollars in millions)

Net sales $ (1.3) $ (1.0) $ (0.3) (30)%

Cost of sales (excluding depreciation and amortization) (0.8) (0.4) (0.4) 100%

Selling, general and administrative 0.2 3.7 (3.5) 95%

Depreciation and amortization 0.1 0.1 — —%

Operating loss $ (0.8) $ (4.4) $ 3.6 82%

Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the three months ended April 30, 2022 and 2021.

Cost of Sales .

Cost of sales for Unallocated Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.

Selling, General and Administrative .

Selling, gen eral and administrative expenses decreased $3.5 million, or 95%, for the three months ended April 30, 2022 compared to the same period in 2021.

This decrease is primarily attributable to $2.3 million of lower compensation expense including the valuations of our stock based compensation awards, a decrease of $0.8 million related to medical expense claims, and a decrease of $0.5 million related to workers’ compensation claims during the three months ended April 30, 2022 as compared to the prior year period.

Changes related to Non-Operating Items:

Interest Expense .

Interest expenses were similar to the three months ended April 30, 2022 compared to the same period in 2021.

Income Taxes .

We recorded income tax expense of $7.9 million on pre-tax income of $34.4 million for the three months ended April 30, 2022, an effective rate of 22.9%, and income tax expense of $6.5 million on pre-tax income of $21.0 million for the three months ended April 30, 2021, an effective rate of 30.7% .

The $1.4 million increase in income tax expense year-over-year primarily corresponds with the increase in pre-tax income partially offset by a benefit for the true-up of deferred taxes from prior year filings.

Six Months Ended April 30, 2022 Compared to Six Months Ended April 30, 2021

Six Months Ended April 30,

2022 2021 Change $ % Variance

(Dollars in millions)

Net sales $ 589.9 $ 500.5 $ 89.4 18 %

Cost of sales (excluding depreciation and amortization) 461.4 384.9 76.5 (20) %

Selling, general and administrative 59.0 60.5 (1.5) 2 %

Depreciation and amortization 20.8 21.9 (1.1) 5 %

Operating income 48.7 33.2 15.5 47 %

Interest expense (1.1) (1.4) 0.3 21 %

Other, net 0.5 0.5 — — %

Income tax expense (10.3) (9.9) (0.4) (4) %

Net income $ 37.8 $ 22.4 $ 15.4 69 %

Our period-over-period results by reportable segment follow.

Changes Related to Operating Income by Reportable Segment:

NA Fenestration

Six Months Ended April 30,

2022 2021 $ Change % Variance

(Dollars in millions)

Net sales $ 324.5 $ 274.3 $ 50.2 18%

Cost of sales (excluding depreciation and amortization) 253.5 211.8 41.7 (20)%

Selling, general and administrative 28.5 25.6 2.9 (11)%

Depreciation and amortization 8.2 10.0 (1.8) 18%

Operating income $ 34.3 $ 26.9 $ 7.4 28%

Operating income margin 11 % 10 %

Ne t sales increased $50.2 million, or 18%, for the six months ended April 30, 2022 compared to the same period in 2021, which was primarily driven by an increase in price and raw material surcharges of $32.8 million and a $17.4 million increase in volumes.

Cost of Sales.

The cost of sales increased $41.7 million, or 20%, for the six months ended April 30, 2022 as compared to the same period in 2021.

Cost of sales, including labor, increased primarily due to higher volumes during the period as well as the inflation of raw materials.

Selling, General and Administrative.

S elling, general and administrative expenses increased $2.9 million, or 11%, for the six months ended April 30, 2022 as compared to the same period in 2021.

This increase was due primarily to higher professional fees and general expenses year-over-year.

Depreciation and Amortization.

Depreciation and amortization expense decreased $1.8 million, or 18%, for the six months ended April 30, 2022 as compared to the same period in 2021, reflecting the run-off of depreciation expense related to existing assets and disposals during the period.

EU Fenestration

Six Months Ended April 30,

2022 2021 $ Change Variance %

(Dollars in millions)

Net sales $ 132.3 $ 110.7 $ 21.6 20%

Cost of sales (excluding depreciation and amortization) 90.9 73.2 17.7 (24)%

Selling, general and administrative 15.9 14.0 1.9 (14)%

Depreciation and amortization 5.1 5.1 — —%

Operating income $ 20.4 $ 18.4 $ 2.0 11%

Operating income margin 15 % 17 %

Net sales increased $21.6 million, o r 20%, comparing the six months ended April 30, 2022 to the same period in 2021, which was primarily driven by $23.1 million of base price increases and a $2.2 million increase in volumes partially offset by $3.7 million of foreign currency rate changes.

Cost of Sales.

The cost of sales increased $17.7 million, or 24%, for the six months ended April 30, 2022 compared to the same period in 2021.

Cost of sales increased primarily due to higher volumes during the period as well as the inflation of raw materials.

Selling, General and Administrative.

Selling, general an d administrative expense increased $0.7 million, or 11%, for the three months ended January 31, 2022 compared to the same period in 2021.

Selling, general an d administrative expense increased $1.9 million, or 14%, for the six months ended April 30, 2022 compared to the same period in 2021.

The increase is primarily due to higher compensation, general expenses and foreign currency impacts year-over-year.

NA Cabinet Components

Three Months Ended January 31,

Six Months Ended April 30,

2022 2021 $ Change Variance %

6 unchanged sentences

Operating loss margin (1) % — %

Net sales increased $8.4 million, or 16%, for the three months ended January 31, 2022 compared to the same period in 2021, which was driven by a $14.3 million increase in price and raw material indexes partially offset by $6.0 million decrease in volumes.

Net sales increased $17.7 million, or 15%, for the six months ended April 30, 2022 compared to the same period in 2021, which was driven by a $32.6 million increase in price and raw material indexes partially offset by $14.9 million decrease in volumes due to labor and material shortages throughout the supply chain.

Cost of Sales .

Cost of sales increased $9.1 million, or 20%, for the three months ended January 31, 2022 compared with the same period in 2021, primarily as a result of higher volumes and lumber price inflation, which are recovered on a lag, partially offset by a decrease in volumes.

Cost of sales increased $17.2 million, or 17%, for the six months ended April 30, 2022 compared with the same period in 2021, primarily as a result of lumber price inflation, which is recovered on a lag, partially offset by lower volumes during the period.

Selling, General and Administrative .

Selling, general and administrative expense increased $0.3 million, or 6%, for the three months ended January 31, 2022 compared to the same period in 2021 due to an increase in general expenses year-over-year.

Selling, general and administrative expense increased $0.3 million, or 3%, for the six months ended April 30, 2022 compared to the same period in 2021 due to an increase in general expenses year-over-year.

Unallocated Corporate & Other

Three Months Ended January 31,

Six Months Ended April 30,

2022 2021 $ Change Variance %

5 unchanged sentences

Operating loss $ (5.3) $ (11.9) $ 6.6 55%

Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the three months ended January 31, 2022 and 2021.

Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the six months ended April 30, 2022 and 2021.

Cost of Sales .

1 unchanged sentence

Selling, General and Administrative .

Selling, general and administrative expenses decreased $3.1 million, or 44%, for the three months ended January 31, 2022 compared to the same period in 2021.

This decrease is attributable to $2.3 million of decreased compensation expense related to the valuations of our stock based compensation awards during the three months ended January 31, 2022 as compared to the prior year period.

Additionally, we recorded a $1.4 million loss on the sale of a plant during the three months ended January 31, 2021, for which we did not have a comparable expense in the corresponding three months ended January 31, 2022.

These decreases were partially offset by an increase in medical expenses of $0.5 million due to higher claims activity year over year.

Selling, general and administrative expenses decreased $6.6 million, or 62%, for the six months ended April 30, 2022 compared to the same period in 2021.

This decrease is primarily attributable to $4.6 million of decreased compensation expense including the valuations of our stock based compensation awards, a decrease of $0.5 million related to workers’ compensation claims and a decrease of $0.2 million related to medical expense claims during the six months ended April 30, 2022 as compared to the prior year period.

Additionally, we recorded a $1.4 million loss on the sale of a plant during the six months ended April 30, 2021, for which we did not have a comparable expense in the corresponding six months ended April 30, 2022.

Changes related to Non-Operating Items:

Interest Exp ense .

Interest expense decreased $0.2 million for the three months ended January 31, 2022 compared to the same period in 2021 as a result of lower borrowings outstanding during the period and lower interest rates.

Interest expense decreased $0.3 million for the six months ended April 30, 2022 compared to the same period in 2021 as a result of lower borrowings outstanding during the period.

Income Taxes .

We recorded income tax expense of $2.4 million on pre-tax income of $13.6 million for the three months ended January 31, 2022, an effective rate of 17.7%, and income tax expense of $3.4 million on a pre-tax income of $11.3 million for the three months ended January 31, 2021, an effective rate of 30.4%.

The $1.0 million decrease in income tax expense year-over-year was primarily driven by the benefit from the vesting or exercise of equity-based compensation awards.

We recorded income tax expense of $10.3 million on pre-tax income of $48.1 million for the six months ended April 30, 2022, an effective rate of 21.4%, and income tax expense of $9.9 million on a pre-tax income of $32.3 million for the six months ended April 30, 2021, an effective rate of 30.6%.

The $0.4 million increase in income tax expense year-over-year corresponds with the increase in pre-tax income partially offset by a benefit for the true-up of deferred taxes from prior year filings and a benefit related to the vesting or exercise of equity based compensation.

Liquidity and Capital Resources

1 unchanged sentence

We maintain a $325.0 million revolving credit facility (the Credit Facility) that matures in 2023 (5-year term) and requires interest payments calculated at a variable market rate depending upon our Consolidated Leverage Ratio.

The applicable rate during the three months ended January 31, 2022 was LIBOR + 1.25%.

The applicable rate during the six months ended April 30, 2022 was LIBOR + 1.25%.

Our cost of capital could increase depending upon the Consolidated Leverage Ratio at the end of any given quarter.

2 unchanged sentences

For further details of the Credit Facility, refer to Note 4, “Debt and Finance Lease Obligations” to the accompanying unaudited condensed consolidated financial statements contained elsewhere herein.

As of January 31, 2022, w e had $31.7 million of cash and equivalents, $63.0 million outstanding under the Credit Facility, $4.5 million of outstanding letters of credit and $15.0 million outstanding under finance leases and other debt.

We had $257.5 million available for use under the Credit Facility at January 31, 2022.

In December 2021, our Board of Directors approved a stock repurchase program that authorized the repurchase of up to $75.0 million worth of shares of our common stock.

Repurchases under the new program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors.

The program does not have an expiration date or a limit on the number of shares that may be purchased.

We repatriated $1.2 million and $1.0 million of f oreign cash during the three months ended January 31, 2022 and 2021, respectively.

As of April 30, 2022, w e had $38.9 million of cash and equivalents, $63.0 million outstanding under the Credit Facility, $4.4 million of outstanding letters of credit and $14.0 million outstanding under finance leases and other debt.

We had $257.6 million available for use under the Credit Facility at April 30, 2022.

We repatriated $4.1 million and $8.8 million of f oreign cash during the six months ended April 30, 2022 and 2021, respectively.

We expect to repatriate excess cash moving forward and use the funds to retire debt or meet current working capital needs.

2 unchanged sentences

Analysis of Cash Flow

The following table summarizes our cash flow results for the three months ended January 31, 2022 and 2021:

Three Months Ended

The following table summarizes our cash flow results for the six months ended April 30, 2022 and 2021:

Six Months Ended

(In millions)

Cash used for operating activities $ (21.7) $ (3.4)

Cash (used for) provided by operating activities $ (1.9) $ 29.0

Cash used for investing activities $ (13.7) $ (8.1)

1 unchanged sentence

Operating A ctivities .

Cash used for operating activities for the three months ended January 31, 2022 increased $18.3 million compared to the three months ended January 31, 2021.

The increase in cash used for operating activities is primarily due to an increase in working capital partially offset by higher net income year-over-year due to increased demand.

The increase in working capital was largely driven by an inventory build and raw material price inflation and a higher payout of accrued incentives.

Operating cash flows for the six months ended April 30, 2022 declined approximately $30.9 million compared to the six months ended April 30, 2021.

The decline in operating cash flows is primarily due to unfavorable changes in working capital partially offset by higher net income year-over-year due to increased demand.

The unfavorable changes in working capital was largely driven by an increase in inventory value due to raw material price inflation and a higher payout of accrued incentives.

Investing Activities.

Cash used f or investing activities increased $2.2 million for the three months ended January 31, 2022 compared to the same period in 2021, primarily as a result an increase in capital expenditures.

Cash used f or investing activities increased $5.6 million for the six months ended April 30, 2022 compared to the same period in 2021, primarily as a result of an increase in capital expenditures and a decrease in proceeds from dispositions.

Financing Activities.

Cash provided by financing activities was $20.9 million for the three months ended January 31, 2022, which included $24.8 million of net debt borrowings partially offset by $2.6 million of dividends paid to our shareholders and $1.4 million of payroll tax paid to settle shares forfeited upon vesting of stock.

Cash provided by financing activities was $16.5 million for the six months ended April 30, 2022, which included $24.6 million of net debt borrowings partially offset by $5.3 million of dividends paid to our shareholders, $1.6 million purchase of treasury stock and $1.4 million of payroll tax paid to settle shares forfeited upon vesting of stock.

Liquidity Requirements

1 unchanged sentence

Other uses of cash include paying cash dividends to our shareholders and repurchasing our common stock.

During the three months ended January 31, 2022 and 2021, we repatriated $1.2 million and $1.0 million, respectively, of foreign earnings from our foreign locations.

We maintain cash balances in foreign countries which total $9.0 million as of January 31, 2022.

During the six months ended April 30, 2022 and 2021, we repatriated $4.1 million and $8.8 million, respectively, of foreign earnings from our foreign locations.

We maintain cash balances in foreign countries which total $10.6 million as of April 30, 2022.

Critical Accounting Policies and Estimates

7 unchanged sentences

For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.

Our critical accounting policies and estimates have not changed materially during the three months ended January 31, 2022.

Our critical accounting policies and estimates have not changed materially during the six months ended April 30, 2022.

While there have been no changes in the application of principles, methods, and assumptions used to determine our significant estimates, we may be required to revise certain accounting estimates and judgments related to the economic and business impact of the COVID-19 pandemic, such as, but not limited to, those related to the valuation of goodwill, intangibles, long-lived assets, accounts receivable, and inventory, which could have a material adverse effect on our financial position and results of operations.

1 unchanged sentence

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standards setting bodies that we adopt as of the specified effective date.

We did not adopt any new accounting pronouncements during the three months ended January 31, 2022.

As of January 31, 2022, we believe the impact of any recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our condensed consolidated financial statements upon adoption.

We did not adopt any new accounting pronouncements during the three and six months ended April 30, 2022.

As of April 30, 2022, we believe the impact of any recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our condensed consolidated financial statements upon adoption.

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 2. Management’s Discussion and Analysis