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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-1561397
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1800 West Loop South, Suite 1500, Houston, Texas
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77027
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 par value
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New York Stock Exchange, Inc.
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Other Information
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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changes in market conditions, particularly in the new home construction, and residential remodeling and replacement (R&R) activity markets in the United States, United Kingdom and Germany;
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•
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changes in non-pass-through raw material costs;
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•
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changes in domestic and international economic conditions;
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•
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changes in purchases by our principal customers;
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•
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fluctuations in foreign currency exchange rates;
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•
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our ability to maintain an effective system of internal controls;
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•
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our ability to successfully implement our internal operating plans and acquisition strategies;
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•
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our ability to successfully implement our plans with respect to information technology (IT) systems and processes;
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•
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our ability to control costs and increase profitability;
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•
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changes in environmental laws and regulations;
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•
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changes in warranty obligations;
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•
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changes in energy costs;
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•
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changes in tax laws, and interpretations thereof;
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•
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changes in interest rates;
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•
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our ability to service our debt facilities and remain in good standing with our lenders;
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•
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changes in the availability or applicability of our insurance coverage;
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•
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our ability to maintain good relationships with our suppliers, subcontractors, and key customers; and
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•
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the resolution of litigation and other legal proceedings.
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•
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in March 2011, we acquired Edgetech, I.G. Inc. and its German subsidiary, which provided us with three manufacturing facilities, one each in the United States, United Kingdom and Germany, that produce and market a full line of flexible insulating glass spacer systems for window and door customers in North America and abroad. This acquisition complemented our then existing insulating glass products business in the United States and, as a result, we committed to a plan to consolidate these facilities in November 2011. This consolidation plan, in part, resulted in the closure of a plant in Barbourville, Kentucky, and the relocation of equipment that was used to manufacture the single seal, warm-edge spacer system to our facility in Cambridge, Ohio. This consolidation was substantially completed by August 2012, with minor residual cash payments and program costs incurred during fiscal 2013. We sold the facility in Barbourville in May 2014;
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•
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in December 2012, we acquired substantially all of the assets of Alumco Inc. and its subsidiaries (Alumco), an aluminum screen manufacturer, which allowed us to expand the scope of our fenestration business to include screens for vinyl window and door manufacturers and to expand our geographic reach throughout the United States;
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•
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in April 2014, we sold our interest in a limited liability company which held the net assets of our Nichols Aluminum business to a privately held company that provides aluminum rolled products and extrusions, aluminum recycling and specification aluminum alloy production;
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•
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in June 2015, we acquired the outstanding ownership shares of Flamstead Holdings Limited, an extruder of vinyl lineal products and manufacturer of other plastic products incorporated and registered in England and Wales. Following a pre-sale reorganization and purchase, Flamstead Holdings Limited owned 100% of the ownership shares of the following subsidiaries: HL Plastics Limited, Vintage Windows Limited, Wegoma Machinery Sales Limited (renamed in 2016 as Avantek Machinery Company), and Liniar Limited (collectively referred to as “HLP”), each registered in England and Wales. This acquisition expanded our vinyl extrusion product offerings and expanded our international presence in the global fenestration business;
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•
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in November 2015, we completed the merger of QWMS, Inc., a Delaware corporation which was a newly-formed and wholly-owned Quanex subsidiary, and WII Holding, Inc. (WII), a Delaware corporation. Upon satisfaction or waiver of
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•
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In October 2016, we committed to a restructuring plan that includes the closure of two vinyl extrusion plants in the United States and our kitchen and bathroom cabinet door plant in Guadalajara, Mexico.
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•
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In September 2017, we closed a kitchen and bathroom cabinet door plant in Lansing, Kansas, and, in October 2017, sold a wood-flooring business in Shawano, Wisconsin.
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|
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Single-family Units
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Multi-family Units
|
|
Manufactured Units
|
|
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||||||
Period
|
|
Units
|
|
% Change
|
|
Units
|
|
% Change
|
|
Units
|
|
% Change
|
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Total Units
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Annual Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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2011
|
|
434
|
|
N/A
|
|
178
|
|
N/A
|
|
51
|
|
N/A
|
|
663
|
2012
|
|
537
|
|
24%
|
|
247
|
|
39%
|
|
55
|
|
8%
|
|
839
|
2013
|
|
620
|
|
15%
|
|
308
|
|
25%
|
|
60
|
|
9%
|
|
988
|
2014
|
|
647
|
|
4%
|
|
355
|
|
15%
|
|
64
|
|
7%
|
|
1,066
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2015
|
|
712
|
|
10%
|
|
395
|
|
11%
|
|
71
|
|
11%
|
|
1,178
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2016
|
|
784
|
|
10%
|
|
393
|
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(1)%
|
|
81
|
|
14%
|
|
1,258
|
Annual Data - Forecast
|
|
|
|
|
|
|
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|
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2017
|
|
840
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7%
|
|
356
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(9)%
|
|
86
|
|
6%
|
|
1,282
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2018
|
|
903
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8%
|
|
350
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(2)%
|
|
92
|
|
7%
|
|
1,345
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2019
|
|
966
|
|
7%
|
|
338
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(3)%
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|
98
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|
7%
|
|
1,402
|
|
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New Construction
|
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Remodeling & Replacement
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||||||||||||||||||||
Period
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Wood
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Aluminum
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Vinyl
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Fiberglass
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Other
|
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Total
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Wood
|
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Aluminum
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Vinyl
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Fiberglass
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Other
|
|
Total
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Annual Data
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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2011
|
|
2,601
|
|
1,820
|
|
6,623
|
|
514
|
|
182
|
|
11,740
|
|
5,071
|
|
717
|
|
19,086
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|
730
|
|
516
|
|
26,120
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2012
|
|
2,736
|
|
2,516
|
|
8,625
|
|
592
|
|
237
|
|
14,706
|
|
4,566
|
|
696
|
|
18,902
|
|
657
|
|
594
|
|
25,415
|
2013
|
|
2,989
|
|
3,077
|
|
10,585
|
|
668
|
|
264
|
|
17,583
|
|
4,739
|
|
658
|
|
19,588
|
|
685
|
|
658
|
|
26,328
|
2014
|
|
3,108
|
|
3,471
|
|
11,651
|
|
728
|
|
291
|
|
19,249
|
|
4,697
|
|
718
|
|
19,972
|
|
698
|
|
677
|
|
26,762
|
2015
|
|
2,911
|
|
3,470
|
|
12,925
|
|
793
|
|
358
|
|
20,457
|
|
4,324
|
|
562
|
|
20,742
|
|
766
|
|
740
|
|
27,134
|
2016
|
|
3,028
|
|
3,432
|
|
13,690
|
|
909
|
|
355
|
|
21,414
|
|
4,225
|
|
573
|
|
21,302
|
|
781
|
|
759
|
|
27,640
|
•
|
the number of housing starts and window shipments in the United States has increased in recent years following a dramatic decline from 2007 through 2011. The NAHB expects this trend to continue for the next several years, which should result in higher demand for our fenestration and kitchen and bathroom cabinet door products;
|
•
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the recent growth in the housing market has been predominately in new construction which has outpaced the growth in the residential remodeling and replacement sector; growth in the residential remodeling and replacement sector has been stagnated by uncertainty in the economy and the job market, although there have been favorable market indicators in the United States in recent months;
|
•
|
the recovery of the housing market has been slowed due to predominant growth of multi-family homes compared to mid- and higher priced single family homes;
|
•
|
programs in the United States such as Energy Star have improved customer awareness of the technological advances in window and door energy-efficiency, but the government has been reluctant to enforce stricter energy standards;
|
•
|
foreign currency rates in the United Kingdom and other European nations have changed significantly relative to the United States Dollar due in part to voter approval of a referendum in June 2016 for the United Kingdom to potentially exit the
|
•
|
commodity prices have fluctuated in recent years, and to the extent we cannot pass this cost to our customers, this impacts the cost of critical materials used in our manufacturing processes such as resin, which affects margins related to our vinyl extrusion products; oil products such as butyl, which affects our insulating glass products; and aluminum, wood and silicone products used by our other businesses; and
|
•
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higher energy efficiency standards in Europe should favorably impact sales of our insulating glass spacer products in the short- to mid-term.
|
•
|
focus on organic growth with our current customer base and expand our market share with national and regional customers by providing: (1) a quality product; (2) a high level of customer service; (3) product choices at different price points; and (4) new products or enhancements to existing product offerings. These enhancements may include higher thermal efficiency, enhanced functionality, improved weatherability, better appearance and best-in-class quality for our fenestration and cabinet door products;
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•
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realize improved profitability in our manufacturing processes through: (1) ongoing preventive maintenance programs; (2) better utilization of our capacity by focusing on operational efficiencies and reducing scrap; (3) marketing our value added products; and (4) focusing on employee safety;
|
•
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offer logistic solutions that provide our customers with just-in-time service which can reduce their processing costs;
|
•
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pursue targeted business acquisitions that allow us to expand our existing footprint, enhance our existing product offerings, acquire complementary technology, enhance our leadership position within the markets we serve, and expand into adjacent markets or service lines; and
|
•
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exit unprofitable service lines or customer relationships.
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Location
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Character & Use of Property
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Executive Offices
|
|
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Houston, Texas (Lease expires 2023)
|
|
Executive corporate office
|
NA Engineered Components Segment
|
|
|
Rice Lake, Wisconsin
|
|
Fenestration products
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Chatsworth, Illinois
|
|
Fenestration products
|
Richmond, Indiana
|
|
Fenestration products
|
Akron, Ohio (Lease expires 2026)
|
|
Adhesive research and administrative offices
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Richmond, Kentucky
|
|
Vinyl and composite extrusions
|
Winnebago, Illinois
|
|
Vinyl extrusions
|
Kent, Washington (Lease expires 2020)
|
|
Vinyl and composite extrusions
|
Dubuque, Iowa (Lease expires 2018)
|
|
Fenestration products
|
Cambridge, Ohio (Lease expires 2021)
|
|
Flexible spacer and solar adhesives
|
Dallas, Texas ( Lease expires 2022)
|
|
Screens for windows and doors
|
Sacramento, California (Lease expires 2021)
|
|
Screens for windows and doors
|
Des Moines, Iowa (Lease expires 2019)
|
|
Screens for windows and doors
|
Phoenix, Arizona (Lease expires 2018)
|
|
Screens for windows and doors
|
Denver, Colorado (Lease expires 2020)
|
|
Screens for windows and doors
|
Paris, Illinois (Lease expires 2018)
|
|
Screens for windows and doors
|
Parkersburg, West Virginia (Lease expires 2022)
|
|
Screens for windows and doors
|
Fontana, California (Lease expires 2019)
|
|
Screens for windows and doors
|
Perrysburg, Ohio (Lease expires 2019)
|
|
Screens for windows and doors
|
Olympia, Washington (Lease expires 2024)
|
|
Division executive offices
|
Chehalis, Washington (Lease expires 2019)
|
|
Screens for windows and doors
|
Durham, North Carolina (Lease expires 2021)
|
|
Division executive offices
|
EU Engineered Components Segment
|
|
|
Denby, United Kingdom (Leases expire 2027 & 2037)
|
|
Vinyl and composite extrusions
|
Alfreton, United Kingdom (Lease expires 2022)
|
|
Vinyl and composite extrusions
|
Coventry, United Kingdom
|
|
Flexible and rigid spacer
|
Heinsberg, Germany (Lease expires 2025)
|
|
Flexible spacer
|
Burnley, United Kingdom (Lease expires 2018)
|
|
Flexible and rigid spacer
|
NA Cabinet Components Segment
|
|
|
Bowling Green, Kentucky
|
|
Hardwood components for kitchen and bath
|
Conover, North Carolina (Lease expires 2018)
|
|
Hardwood doors for kitchen and bath
|
Foreston, Minnesota
|
|
Hardwood components for kitchen and bath
|
Greenville, Pennsylvania
|
|
Hardwood components for kitchen and bath
|
Middlefield, Ohio (Leases expire 2017 & 2019)
|
|
Hardwood components for kitchen and bath
|
Orwell, Ohio
|
|
Hardwood doors for kitchen and bath
|
St. Cloud, Minnesota
|
|
Hardwood doors & components for kitchen and bath
|
Bashor, Kansas (Lease expires 2018)
|
|
Engineered wood products for kitchen and bath
|
Moorefield, West Virginia (Lease expires 2026)
|
|
Engineered wood products for kitchen and bath
|
Wahpeton, North Dakota
|
|
Engineered wood products for kitchen and bath
|
Molalla, Oregon
|
|
Hardwood & engineered products for kitchen & bath
|
Luck, Wisconsin
|
|
Wood products
|
Mounds View, Minnesota (Lease expires 2021)
|
|
Fenestration and wood products
|
|
NX Stock Price
|
|
Cash Dividends
|
||||||||
Period
|
High
|
|
Low
|
|
Declared
|
||||||
Quarter ended October 31, 2017
|
$
|
23.60
|
|
|
$
|
18.55
|
|
|
$
|
0.04
|
|
Quarter ended July 31, 2017
|
22.65
|
|
|
18.95
|
|
|
0.04
|
|
|||
Quarter ended April 30, 2017
|
21.40
|
|
|
17.45
|
|
|
0.04
|
|
|||
Quarter ended January 31, 2017
|
21.90
|
|
|
15.41
|
|
|
0.04
|
|
|||
Quarter ended October 31, 2016
|
20.99
|
|
|
15.63
|
|
|
0.04
|
|
|||
Quarter ended July 31, 2016
|
20.99
|
|
|
17.44
|
|
|
0.04
|
|
|||
Quarter ended April 30, 2016
|
19.43
|
|
|
15.33
|
|
|
0.04
|
|
|||
Quarter ended January 31, 2016
|
$
|
21.66
|
|
|
$
|
17.09
|
|
|
$
|
0.04
|
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Plan Category
|
Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
(1)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(2)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
Equity compensation plans approved by security holders
|
3,178,620
|
|
|
$
|
17.44
|
|
|
1,522,056
|
|
INDEXED RETURNS
|
|
For the Years Ended
|
||||||||||||||||||||
Company Name / Index
|
|
10/31/2012
|
|
10/31/2013
|
|
|
10/31/2014
|
|
|
10/31/2015
|
|
|
10/31/2016
|
|
|
10/31/2017
|
|
|||||
Quanex Building Products Corporation
|
|
$100
|
|
$
|
90.74
|
|
|
$
|
103.03
|
|
|
$
|
97.92
|
|
|
$
|
85.32
|
|
|
$
|
115.76
|
|
S&P 500 Index
|
|
$100
|
|
$
|
127.18
|
|
|
$
|
149.14
|
|
|
$
|
156.89
|
|
|
$
|
163.97
|
|
|
$
|
202.72
|
|
Russell 2000 Index
|
|
$100
|
|
$
|
136.28
|
|
|
$
|
145.05
|
|
|
$
|
145.53
|
|
|
$
|
151.52
|
|
|
$
|
193.72
|
|
New Peer Group
|
|
$100
|
|
$
|
129.68
|
|
|
$
|
135.20
|
|
|
$
|
156.60
|
|
|
$
|
182.54
|
|
|
$
|
245.75
|
|
Old Peer Group
|
|
$100
|
|
$
|
126.60
|
|
|
$
|
134.30
|
|
|
$
|
143.55
|
|
|
$
|
165.54
|
|
|
$
|
225.55
|
|
|
Fiscal Years Ended October 31,
|
||||||||||||||||||
|
2017
(1)
|
|
2016
(1)(2)(3)(4)
|
|
2015
(5)
|
|
2014
(6)(7)
|
|
2013
(8)
|
||||||||||
|
(Dollars in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
866,555
|
|
|
$
|
928,184
|
|
|
$
|
645,528
|
|
|
$
|
595,384
|
|
|
$
|
554,867
|
|
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales (excluding depreciation and amortization)
|
672,162
|
|
|
710,644
|
|
|
499,097
|
|
|
464,584
|
|
|
419,733
|
|
|||||
Selling, general and administrative
|
97,981
|
|
|
114,910
|
|
|
86,536
|
|
|
82,150
|
|
|
98,969
|
|
|||||
Restructuring charges
|
4,550
|
|
|
529
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
57,495
|
|
|
53,146
|
|
|
35,220
|
|
|
33,869
|
|
|
53,521
|
|
|||||
Asset impairment charges
|
—
|
|
|
12,602
|
|
|
—
|
|
|
505
|
|
|
1,465
|
|
|||||
Operating income (loss)
|
34,367
|
|
|
36,353
|
|
|
24,675
|
|
|
14,276
|
|
|
(18,821
|
)
|
|||||
Non-operating income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(9,595
|
)
|
|
(36,498
|
)
|
|
(991
|
)
|
|
(562
|
)
|
|
(621
|
)
|
|||||
Other, net
|
730
|
|
|
(5,479
|
)
|
|
(531
|
)
|
|
92
|
|
|
170
|
|
|||||
Income (loss) from continuing operations before income taxes
|
25,502
|
|
|
(5,624
|
)
|
|
23,153
|
|
|
13,806
|
|
|
(19,272
|
)
|
|||||
Income tax (expense) benefit
|
(6,819
|
)
|
|
3,765
|
|
|
(7,539
|
)
|
|
(5,468
|
)
|
|
6,888
|
|
|||||
Income (loss) from continuing operations
|
18,683
|
|
|
(1,859
|
)
|
|
15,614
|
|
|
8,338
|
|
|
(12,384
|
)
|
|||||
Income (loss) from discontinued operations, net of taxes
|
—
|
|
|
—
|
|
|
479
|
|
|
20,896
|
|
|
681
|
|
|||||
Net income (loss)
|
$
|
18,683
|
|
|
$
|
(1,859
|
)
|
|
$
|
16,093
|
|
|
$
|
29,234
|
|
|
$
|
(11,703
|
)
|
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) from continuing operations
|
$
|
0.55
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.46
|
|
|
$
|
0.22
|
|
|
$
|
(0.34
|
)
|
Basic earnings (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.57
|
|
|
0.02
|
|
|||||
Basic earnings (loss) per share
|
$
|
0.55
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.47
|
|
|
$
|
0.79
|
|
|
$
|
(0.32
|
)
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) from continuing operations
|
$
|
0.54
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.46
|
|
|
$
|
0.22
|
|
|
$
|
(0.34
|
)
|
Diluted earnings (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.56
|
|
|
0.02
|
|
|||||
Diluted earnings (loss) per share
|
$
|
0.54
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.47
|
|
|
$
|
0.78
|
|
|
$
|
(0.32
|
)
|
Cash dividends declared per share
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
Other Financial & Operating Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
$
|
78,554
|
|
|
$
|
86,418
|
|
|
$
|
67,087
|
|
|
$
|
20,778
|
|
|
$
|
43,519
|
|
Cash (used for) provided by investing activities
|
(41,124
|
)
|
|
(282,103
|
)
|
|
(160,144
|
)
|
|
74,124
|
|
|
(59,687
|
)
|
|||||
Cash (used for) provided by financing activities
|
(45,412
|
)
|
|
196,371
|
|
|
(4,581
|
)
|
|
(24,459
|
)
|
|
(4,869
|
)
|
|||||
Acquisitions, net of cash acquired
|
8,497
|
|
|
245,904
|
|
|
131,689
|
|
|
5,161
|
|
|
22,096
|
|
|||||
Capital expenditures
|
$
|
34,564
|
|
|
$
|
37,243
|
|
|
$
|
29,982
|
|
|
$
|
33,779
|
|
|
$
|
37,931
|
|
Selected Consolidated Balance Sheet Data at Year End
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
17,455
|
|
|
$
|
25,526
|
|
|
$
|
23,125
|
|
|
$
|
120,384
|
|
|
$
|
49,734
|
|
Total assets
|
773,879
|
|
|
780,353
|
|
|
565,516
|
|
|
517,113
|
|
|
571,815
|
|
|||||
Long-term debt, excluding current portion
|
218,184
|
|
|
259,011
|
|
|
53,767
|
|
|
586
|
|
|
701
|
|
|||||
Total liabilities
|
$
|
367,032
|
|
|
$
|
412,522
|
|
|
$
|
170,221
|
|
|
$
|
96,193
|
|
|
$
|
155,621
|
|
(1)
|
In 2017 and 2016, we incurred $4.6 million and $0.5 million, respectively, of restructuring costs associated with the closure of several plant facilities. See Note 1, "Nature of Operations, Basis of Presentation and Significant Accounting Policies - Restructuring," included elsewhere in this Annual Report on Form 10-K.
|
(2)
|
In November 2015, we acquired Woodcraft, a manufacturer of cabinet doors and other components to OEMs in the kitchen and bathroom cabinet industry. The results of operations of Woodcraft including revenue of $223.4 million and net income of $4.1 million have been included in our consolidated operating results since the date of acquisition, November 2, 2015.
|
(3)
|
In July 2016, we refinanced our credit facility resulting in a $3.1 million prepayment call premium fee, a charge of $8.1 million of unamortized deferred financing fees and a charge of $5.5 million of unamortized original issuer’s discount. See Note 8, "Debt and Capital Lease Obligations" included elsewhere in this Annual Report on Form 10-K.
|
(4)
|
In October 2016, we recorded a goodwill impairment charge of $12.6 million associated with our United States vinyl extrusion business.
|
(5)
|
In June 2015, we acquired HLP, a vinyl profile extruder with operations located in the United Kingdom. The results of operations of HLP include revenue of $42.3 million and net income of $1.5 million for the period June 15, 2015 through October 31, 2015.
|
|
Years ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
NA Engineered Components
|
$
|
9,327
|
|
|
$
|
10,487
|
|
|
$
|
9,638
|
|
EU Engineered Components
|
3,392
|
|
|
3,814
|
|
|
2,109
|
|
|||
NA Cabinet Components
|
4,239
|
|
|
4,767
|
|
|
—
|
|
|||
Unallocated Corporate & Other
|
—
|
|
|
—
|
|
|
5,776
|
|
|||
Allocable general and administrative expense
|
$
|
16,958
|
|
|
$
|
19,068
|
|
|
$
|
17,523
|
|
|
For the Years Ended October 31,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2017 vs. 2016
|
||||||||||||
|
Amounts
|
|
% of Sales
|
|
Amounts
|
|
% of Sales
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||||||
Net sales
|
$
|
866.6
|
|
|
100%
|
|
$
|
928.2
|
|
|
100%
|
|
$
|
(61.6
|
)
|
|
(7)%
|
Cost of sales (excluding depreciation and amortization)
|
672.2
|
|
|
78%
|
|
710.6
|
|
|
77%
|
|
(38.4
|
)
|
|
5%
|
|||
Selling, general and administrative
|
98.0
|
|
|
11%
|
|
114.9
|
|
|
12%
|
|
(16.9
|
)
|
|
15%
|
|||
Restructuring charges
|
4.5
|
|
|
1%
|
|
0.5
|
|
|
—%
|
|
4.0
|
|
|
(800)%
|
|||
Depreciation and amortization
|
57.5
|
|
|
7%
|
|
53.2
|
|
|
6%
|
|
4.3
|
|
|
(8)%
|
|||
Asset impairment charges
|
—
|
|
|
—%
|
|
12.6
|
|
|
1%
|
|
(12.6
|
)
|
|
(100)%
|
|||
Operating income
|
34.4
|
|
|
4%
|
|
36.4
|
|
|
4%
|
|
(2.0
|
)
|
|
(5)%
|
|||
Interest expense
|
(9.6
|
)
|
|
(1)%
|
|
(36.5
|
)
|
|
(4)%
|
|
26.9
|
|
|
74%
|
|||
Other, net
|
0.7
|
|
|
—%
|
|
(5.5
|
)
|
|
(1)%
|
|
6.2
|
|
|
113%
|
|||
Income tax (expense) benefit
|
(6.8
|
)
|
|
(1)%
|
|
3.7
|
|
|
—%
|
|
(10.5
|
)
|
|
284%
|
|||
Net income (loss)
|
$
|
18.7
|
|
|
2%
|
|
$
|
(1.9
|
)
|
|
—%
|
|
$
|
20.6
|
|
|
(1,084)%
|
|
For the Years Ended October 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
474.9
|
|
|
$
|
538.3
|
|
|
$
|
(63.4
|
)
|
|
(12)%
|
Cost of sales (excluding depreciation and amortization)
|
357.8
|
|
|
399.2
|
|
|
(41.4
|
)
|
|
10%
|
|||
Selling, general and administrative
|
52.9
|
|
|
62.1
|
|
|
(9.2
|
)
|
|
15%
|
|||
Restructuring charges
|
3.6
|
|
|
0.4
|
|
|
3.2
|
|
|
(800)%
|
|||
Depreciation and amortization
|
34.3
|
|
|
29.8
|
|
|
4.5
|
|
|
(15)%
|
|||
Asset impairment charges
|
—
|
|
|
12.6
|
|
|
(12.6
|
)
|
|
(100)%
|
|||
Operating income
|
$
|
26.3
|
|
|
$
|
34.2
|
|
|
$
|
(7.9
|
)
|
|
(23)%
|
Operating income margin
|
6
|
%
|
|
6
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
148.0
|
|
|
$
|
150.2
|
|
|
$
|
(2.2
|
)
|
|
(1)%
|
Cost of sales (excluding depreciation and amortization)
|
104.9
|
|
|
104.5
|
|
|
0.4
|
|
|
—%
|
|||
Selling, general and administrative
|
20.6
|
|
|
23.2
|
|
|
(2.6
|
)
|
|
11%
|
|||
Depreciation and amortization
|
8.8
|
|
|
9.3
|
|
|
(0.5
|
)
|
|
5%
|
|||
Operating income
|
$
|
13.7
|
|
|
$
|
13.2
|
|
|
$
|
0.5
|
|
|
4%
|
Operating income margin
|
9
|
%
|
|
9
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
248.8
|
|
|
$
|
248.1
|
|
|
$
|
0.7
|
|
|
—%
|
Cost of sales (excluding depreciation and amortization)
|
213.3
|
|
|
213.3
|
|
|
—
|
|
|
—%
|
|||
Selling, general and administrative
|
16.6
|
|
|
15.8
|
|
|
0.8
|
|
|
(5)%
|
|||
Restructuring charges
|
0.9
|
|
|
0.1
|
|
|
0.8
|
|
|
(800)%
|
|||
Depreciation and amortization
|
13.9
|
|
|
13.5
|
|
|
0.4
|
|
|
(3)%
|
|||
Operating income
|
$
|
4.1
|
|
|
$
|
5.4
|
|
|
$
|
(1.3
|
)
|
|
(24)%
|
Operating income margin
|
2
|
%
|
|
2
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
(5.1
|
)
|
|
$
|
(8.4
|
)
|
|
$
|
3.3
|
|
|
39%
|
Cost of sales (excluding depreciation and amortization)
|
(3.8
|
)
|
|
(6.4
|
)
|
|
2.6
|
|
|
(41)%
|
|||
Selling, general and administrative
|
7.9
|
|
|
13.8
|
|
|
(5.9
|
)
|
|
43%
|
|||
Depreciation and amortization
|
0.5
|
|
|
0.6
|
|
|
(0.1
|
)
|
|
17%
|
|||
Operating loss
|
$
|
(9.7
|
)
|
|
$
|
(16.4
|
)
|
|
$
|
6.7
|
|
|
41%
|
|
For the Years Ended October 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2016 vs. 2015
|
||||||||||||
|
Amounts
|
|
% of Sales
|
|
Amounts
|
|
% of Sales
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||||||
Net sales
|
$
|
928.2
|
|
|
100%
|
|
$
|
645.5
|
|
|
100%
|
|
$
|
282.7
|
|
|
44%
|
Cost of sales (excluding depreciation and amortization)
|
710.6
|
|
|
77%
|
|
499.1
|
|
|
77%
|
|
211.5
|
|
|
(42)%
|
|||
Selling, general and administrative
|
114.9
|
|
|
12%
|
|
86.5
|
|
|
13%
|
|
28.4
|
|
|
(33)%
|
|||
Restructuring charges
|
0.5
|
|
|
—%
|
|
—
|
|
|
—%
|
|
0.5
|
|
|
(100)%
|
|||
Depreciation and amortization
|
53.2
|
|
|
6%
|
|
35.2
|
|
|
5%
|
|
18.0
|
|
|
(51)%
|
|||
Asset impairment charges
|
12.6
|
|
|
1%
|
|
—
|
|
|
—%
|
|
12.6
|
|
|
(100)%
|
|||
Operating income
|
36.4
|
|
|
4%
|
|
24.7
|
|
|
4%
|
|
11.7
|
|
|
47%
|
|||
Interest expense
|
(36.5
|
)
|
|
(4)%
|
|
(1.0
|
)
|
|
—%
|
|
(35.5
|
)
|
|
3,550%
|
|||
Other, net
|
(5.5
|
)
|
|
(1)%
|
|
(0.5
|
)
|
|
—%
|
|
(5.0
|
)
|
|
1,000%
|
|||
Income tax benefit (expense)
|
3.7
|
|
|
—%
|
|
(7.6
|
)
|
|
(1)%
|
|
11.3
|
|
|
149%
|
|||
(Loss) income from continuing operations
|
$
|
(1.9
|
)
|
|
—%
|
|
$
|
15.6
|
|
|
2%
|
|
$
|
(17.5
|
)
|
|
(112)%
|
Income from discontinued operations
|
$
|
—
|
|
|
—%
|
|
$
|
0.5
|
|
|
—%
|
|
$
|
(0.5
|
)
|
|
(100)%
|
Net (loss) income
|
$
|
(1.9
|
)
|
|
—%
|
|
$
|
16.1
|
|
|
2%
|
|
$
|
(18.0
|
)
|
|
(112)%
|
|
For the Years Ended October 31,
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
538.3
|
|
|
$
|
534.0
|
|
|
$
|
4.3
|
|
|
1%
|
Cost of sales (excluding depreciation and amortization)
|
399.2
|
|
|
411.2
|
|
|
(12.0
|
)
|
|
3%
|
|||
Selling, general and administrative
|
62.1
|
|
|
58.5
|
|
|
3.6
|
|
|
(6)%
|
|||
Restructuring charges
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
(100)%
|
|||
Depreciation and amortization
|
29.8
|
|
|
28.4
|
|
|
1.4
|
|
|
(5)%
|
|||
Asset impairment charges
|
12.6
|
|
|
—
|
|
|
12.6
|
|
|
(100)%
|
|||
Operating income
|
$
|
34.2
|
|
|
$
|
35.9
|
|
|
$
|
(1.7
|
)
|
|
(5)%
|
Operating income margin
|
6
|
%
|
|
7
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
150.2
|
|
|
$
|
93.6
|
|
|
$
|
56.6
|
|
|
60%
|
Cost of sales (excluding depreciation and amortization)
|
104.5
|
|
|
72.3
|
|
|
32.2
|
|
|
(45)%
|
|||
Selling, general and administrative
|
23.2
|
|
|
13.1
|
|
|
10.1
|
|
|
(77)%
|
|||
Depreciation and amortization
|
9.3
|
|
|
5.0
|
|
|
4.3
|
|
|
(86)%
|
|||
Operating income
|
$
|
13.2
|
|
|
$
|
3.2
|
|
|
$
|
10.0
|
|
|
313%
|
Operating income margin
|
9
|
%
|
|
3
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
248.1
|
|
|
$
|
26.4
|
|
|
$
|
221.7
|
|
|
840%
|
Cost of sales (excluding depreciation and amortization)
|
213.3
|
|
|
21.8
|
|
|
191.5
|
|
|
(878)%
|
|||
Selling, general and administrative
|
15.8
|
|
|
0.8
|
|
|
15.0
|
|
|
(1,875)%
|
|||
Restructuring charges
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
(100)%
|
|||
Depreciation and amortization
|
13.5
|
|
|
0.5
|
|
|
13.0
|
|
|
(2,600)%
|
|||
Operating income
|
$
|
5.4
|
|
|
$
|
3.3
|
|
|
$
|
2.1
|
|
|
64%
|
Operating income margin
|
2
|
%
|
|
13
|
%
|
|
|
|
|
|
For the Years Ended October 31,
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
Variance %
|
||||||
|
(Dollars in millions)
|
||||||||||||
Net sales
|
$
|
(8.4
|
)
|
|
$
|
(8.5
|
)
|
|
$
|
0.1
|
|
|
1%
|
Cost of sales (excluding depreciation and amortization)
|
(6.4
|
)
|
|
(6.2
|
)
|
|
(0.2
|
)
|
|
3%
|
|||
Selling, general and administrative
|
13.8
|
|
|
14.1
|
|
|
(0.3
|
)
|
|
2%
|
|||
Depreciation and amortization
|
0.6
|
|
|
1.3
|
|
|
(0.7
|
)
|
|
54%
|
|||
Operating loss
|
$
|
(16.4
|
)
|
|
$
|
(17.7
|
)
|
|
$
|
1.3
|
|
|
7%
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Cash flows provided by operating activities
|
$
|
78.6
|
|
|
$
|
86.4
|
|
|
$
|
67.1
|
|
Cash flows used for investing activities
|
$
|
(41.1
|
)
|
|
$
|
(282.1
|
)
|
|
$
|
(160.1
|
)
|
Cash flows (used for) provided by financing activities
|
$
|
(45.4
|
)
|
|
$
|
196.4
|
|
|
$
|
(4.6
|
)
|
Period
|
|
Maximum Ratio
|
Closing Date through January 30, 2017
|
|
3.50 to 1.00
|
January 31, 2017 through January 30, 2018
|
|
3.25 to 1.00
|
January 31, 2018 and thereafter
|
|
3.00 to 1.00
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Contractual Obligations:
|
(In thousands)
|
||||||||||||||||||
Long-term debt, including interest
(1)(2)
|
$
|
245,926
|
|
|
$
|
26,873
|
|
|
$
|
44,163
|
|
|
$
|
174,890
|
|
|
$
|
—
|
|
Capital leases
(3)
|
18,764
|
|
|
1,798
|
|
|
2,393
|
|
|
1,473
|
|
|
13,100
|
|
|||||
Operating leases
(4)
|
56,113
|
|
|
9,331
|
|
|
15,235
|
|
|
8,980
|
|
|
22,567
|
|
|||||
Unconditional purchase obligations
(5)
|
11,929
|
|
|
11,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
(6)
|
$
|
332,732
|
|
|
$
|
49,931
|
|
|
$
|
61,791
|
|
|
$
|
185,343
|
|
|
$
|
35,667
|
|
(1)
|
Interest on our long-term debt was computed using rates in effect at
October 31, 2017
.
|
(2)
|
Outstanding borrowings under the term loan A portion of the Credit Agreement requires quarterly principal payments with a balloon payment due in July 2021. Outstanding borrowings under the revolving credit facility portion of the Credit Agreement matures in July 2021 with no minimum principal payments due until maturity.
|
(3)
|
Capital leases include several related party capital lease arrangements at HLP, including the new warehouse acquired in February 2017.
|
(4)
|
Operating leases include facilities, light vehicles, forklifts, office equipment and other operating equipment.
|
(5)
|
The unconditional purchase obligations consist of commitments to buy miscellaneous parts, inventory, and expenditures related to capital projects in progress.
|
(6)
|
This table excludes tax reserves recorded in accordance with ASC Topic 740 “
Income Taxes
,” as we are unable to reasonably estimate the timing of future cash flows related to these reserves.
|
|
Amount of Commitment Expiration per Period
|
||||||||||||||||||
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Other Commercial Commitments:
|
(In thousands)
|
||||||||||||||||||
Standby letters of credit
|
$
|
5,300
|
|
|
$
|
5,300
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Increase in Projected Benefit Obligation
|
|
Increase in Net Periodic Benefit Cost
|
||||
Changes in Assumptions:
|
|
(Dollar amounts in thousands)
|
||||||
1% decrease in discount rate
|
|
$
|
5,169
|
|
|
$
|
699
|
|
1% decrease in expected long-term rate of return on plan assets
|
|
N/A
|
|
|
$
|
337
|
|
•
|
ASU No. 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations.
This amendment is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations.
|
•
|
ASU No. 2016-10,
Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing.
This amendment is intended to clarify the identification of performance obligations and the licensing implementation guidance.
|
•
|
ASU No. 2016-12,
Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients.
This update provides clarifying guidance in certain narrow areas and adds some practical expedients.
|
•
|
ASU No. 2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.
This amendment provides technical corrections and improvements to guidance previously issued.
|
|
|
Notional as indicated
|
|
Fair Value in $
|
||||||||||
|
|
October 31, 2017
|
|
October 31, 2016
|
|
October 31, 2017
|
|
October 31, 2016
|
||||||
Foreign currency exchange derivatives:
|
|
(In thousands)
|
||||||||||||
Sell EUR, Buy USD
|
EUR
|
1,271
|
|
|
5,251
|
|
|
$
|
24
|
|
|
$
|
(79
|
)
|
Sell CAD, Buy USD
|
CAD
|
320
|
|
|
186
|
|
|
1
|
|
|
1
|
|
||
Sell GBP, Buy USD
|
GBP
|
75
|
|
|
187
|
|
|
—
|
|
|
(1
|
)
|
||
Buy EUR, Sell GBP
|
EUR
|
30
|
|
|
130
|
|
|
(1
|
)
|
|
1
|
|
||
Buy USD, Sell EUR
|
USD
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
Page
|
Reports of Independent Registered Public Accounting Firm
|
|
Management's Annual Report on Internal Control over Financial Reporting
|
|
Consolidated Financial Statements
|
|
Consolidated Balance Sheets
|
|
Consolidated Statements of Income (Loss)
|
|
Consolidated Statements of Comprehensive Income (Loss)
|
|
Consolidated Statement of Stockholders’ Equity
|
|
Consolidated Statements of Cash Flow
|
|
/s/ GRANT THORNTON LLP
|
|
|
|
Houston, Texas
|
|
December 12, 2017
|
|
/s/ GRANT THORNTON LLP
|
|
Houston, Texas
|
December 12, 2017
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands, except share
amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17,455
|
|
|
$
|
25,526
|
|
Accounts receivable, net of allowance for doubtful accounts of $333 and $251 (Note 3)
|
79,411
|
|
|
83,625
|
|
||
Inventories, net (Note 4)
|
87,529
|
|
|
84,335
|
|
||
Prepaid and other current assets
|
7,406
|
|
|
10,488
|
|
||
Total current assets
|
191,801
|
|
|
203,974
|
|
||
Property, plant and equipment, net of accumulated depreciation of $264,047 and $245,128 (Note 5)
|
211,131
|
|
|
198,497
|
|
||
Goodwill (Note 6)
|
222,194
|
|
|
217,035
|
|
||
Intangible assets, net (Note 6)
|
139,778
|
|
|
154,180
|
|
||
Other assets
|
8,975
|
|
|
6,667
|
|
||
Total assets
|
$
|
773,879
|
|
|
$
|
780,353
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
44,150
|
|
|
$
|
47,781
|
|
Accrued liabilities (Note 7)
|
38,871
|
|
|
55,101
|
|
||
Income taxes payable (Note 11)
|
2,192
|
|
|
732
|
|
||
Current maturities of long-term debt (Note 8)
|
21,242
|
|
|
10,520
|
|
||
Total current liabilities
|
106,455
|
|
|
114,134
|
|
||
Long-term debt (Note 8)
|
218,184
|
|
|
259,011
|
|
||
Deferred pension and postretirement benefits (Note 9)
|
4,433
|
|
|
8,167
|
|
||
Deferred income taxes (Note 11)
|
21,960
|
|
|
18,322
|
|
||
Liability for uncertain tax positions (Note 11)
|
591
|
|
|
579
|
|
||
Other liabilities
|
15,409
|
|
|
12,309
|
|
||
Total liabilities
|
367,032
|
|
|
412,522
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, no par value, shares authorized 1,000,000; issued and outstanding - none
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, shares authorized 125,000,000; issued 37,508,877 and 37,560,249 respectively; outstanding 34,838,134 and 34,220,496, respectively
|
375
|
|
|
376
|
|
||
Additional paid-in-capital
|
255,719
|
|
|
254,540
|
|
||
Retained earnings
|
225,704
|
|
|
214,047
|
|
||
Accumulated other comprehensive loss
|
(25,076
|
)
|
|
(38,765
|
)
|
||
Less: Treasury stock at cost, 2,670,743 and 3,339,753 shares, respectively
|
(49,875
|
)
|
|
(62,367
|
)
|
||
Total stockholders’ equity
|
406,847
|
|
|
367,831
|
|
||
Total liabilities and stockholders' equity
|
$
|
773,879
|
|
|
$
|
780,353
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Net sales
|
$
|
866,555
|
|
|
$
|
928,184
|
|
|
$
|
645,528
|
|
Cost and expenses:
|
|
|
|
|
|
||||||
Cost of sales (excluding depreciation and amortization)
|
672,162
|
|
|
710,644
|
|
|
499,097
|
|
|||
Selling, general and administrative
|
97,981
|
|
|
114,910
|
|
|
86,536
|
|
|||
Restructuring charges
|
4,550
|
|
|
529
|
|
|
—
|
|
|||
Depreciation and amortization
|
57,495
|
|
|
53,146
|
|
|
35,220
|
|
|||
Asset impairment charges
|
—
|
|
|
12,602
|
|
|
—
|
|
|||
Operating income
|
34,367
|
|
|
36,353
|
|
|
24,675
|
|
|||
Non-operating (expense) income:
|
|
|
|
|
|
||||||
Interest expense
|
(9,595
|
)
|
|
(36,498
|
)
|
|
(991
|
)
|
|||
Other, net
|
730
|
|
|
(5,479
|
)
|
|
(531
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
25,502
|
|
|
(5,624
|
)
|
|
23,153
|
|
|||
Income tax (expense) benefit
|
(6,819
|
)
|
|
3,765
|
|
|
(7,539
|
)
|
|||
Income (loss) from continuing operations
|
18,683
|
|
|
(1,859
|
)
|
|
$
|
15,614
|
|
||
Income from discontinued operations, net of tax of $0, $0, and $300, respectively
|
—
|
|
|
—
|
|
|
479
|
|
|||
Net income (loss)
|
$
|
18,683
|
|
|
$
|
(1,859
|
)
|
|
$
|
16,093
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per common share:
|
|
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
0.55
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.46
|
|
Earnings from discontinued operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Basic earnings (loss) per share
|
$
|
0.55
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.47
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per common share:
|
|
|
|
|
|
||||||
Earnings (loss) from continuing operations
|
$
|
0.54
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.46
|
|
Earnings from discontinued operations
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Diluted earnings (loss) per share
|
$
|
0.54
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.47
|
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
34,230
|
|
|
33,876
|
|
|
33,993
|
|
|||
Diluted
|
34,837
|
|
|
33,876
|
|
|
34,502
|
|
|||
|
|
|
|
|
|
||||||
Cash dividends per share
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
$
|
0.16
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net income (loss)
|
$
|
18,683
|
|
|
$
|
(1,859
|
)
|
|
$
|
16,093
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments gain (loss)
|
11,524
|
|
|
(26,838
|
)
|
|
(3,595
|
)
|
|||
Change in pension from net unamortized gain (loss) (pretax)
|
3,462
|
|
|
(2,864
|
)
|
|
(1,280
|
)
|
|||
Change in pension from net unamortized gain (loss) tax (expense) benefit
|
(1,297
|
)
|
|
986
|
|
|
534
|
|
|||
Total other comprehensive income (loss), net of tax
|
13,689
|
|
|
(28,716
|
)
|
|
(4,341
|
)
|
|||
Comprehensive income (loss)
|
$
|
32,372
|
|
|
$
|
(30,575
|
)
|
|
$
|
11,752
|
|
|
Common Stock
|
|
|
|
|
|
Accumulated
|
|
Treasury Stock
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Other Comprehensive Loss
|
|
Shares
|
|
Amount
|
|
Stockholders’
Equity
|
||||||||||||||
|
(In thousands, except share amounts)
|
||||||||||||||||||||||||||||
Balance at October 31, 2014
|
37,632,032
|
|
|
$
|
376
|
|
|
$
|
249,600
|
|
|
$
|
202,319
|
|
|
$
|
(5,708
|
)
|
|
(1,417,700
|
)
|
|
$
|
(25,667
|
)
|
|
$
|
420,920
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
16,093
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,093
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,595
|
)
|
|
—
|
|
|
—
|
|
|
(3,595
|
)
|
||||||
Change in pension from net unamortized loss (net of tax benefit of $534)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(746
|
)
|
|
—
|
|
|
—
|
|
|
(746
|
)
|
||||||
Common dividends ($0.16 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,515
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,515
|
)
|
||||||
Treasury shares purchased, at cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,675,903
|
)
|
|
(50,761
|
)
|
|
(50,761
|
)
|
||||||
Expense related to stock-based compensation
|
—
|
|
|
—
|
|
|
4,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,266
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(282
|
)
|
|
(719
|
)
|
|
—
|
|
|
327,700
|
|
|
6,110
|
|
|
5,109
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
(283
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(283
|
)
|
||||||
Restricted stock awards granted
|
—
|
|
|
—
|
|
|
(2,211
|
)
|
|
—
|
|
|
—
|
|
|
118,800
|
|
|
2,211
|
|
|
—
|
|
||||||
Recognition of unrecognized tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
10,003
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,003
|
|
||||||
Other
|
(22,469
|
)
|
|
—
|
|
|
(153
|
)
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(196
|
)
|
||||||
Balance at October 31, 2015
|
37,609,563
|
|
|
$
|
376
|
|
|
$
|
250,937
|
|
|
$
|
222,138
|
|
|
$
|
(10,049
|
)
|
|
(3,647,103
|
)
|
|
$
|
(68,107
|
)
|
|
$
|
395,295
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,859
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,859
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,838
|
)
|
|
—
|
|
|
—
|
|
|
(26,838
|
)
|
||||||
Change in pension from net unamortized loss (net of tax benefit of $986)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,878
|
)
|
|
—
|
|
|
—
|
|
|
(1,878
|
)
|
||||||
Common dividends ($0.16 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,470
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,470
|
)
|
||||||
Expense related to stock-based compensation
|
—
|
|
|
—
|
|
|
6,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,089
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
(637
|
)
|
|
—
|
|
|
221,850
|
|
|
4,143
|
|
|
3,400
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
||||||
Restricted stock awards granted
|
—
|
|
|
—
|
|
|
(1,591
|
)
|
|
(6
|
)
|
|
—
|
|
|
85,500
|
|
|
1,597
|
|
|
—
|
|
||||||
Other
|
(49,314
|
)
|
|
—
|
|
|
(643
|
)
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(762
|
)
|
||||||
Balance at October 31, 2016
|
37,560,249
|
|
|
$
|
376
|
|
|
$
|
254,540
|
|
|
$
|
214,047
|
|
|
$
|
(38,765
|
)
|
|
(3,339,753
|
)
|
|
$
|
(62,367
|
)
|
|
$
|
367,831
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
18,683
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,683
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,524
|
|
|
—
|
|
|
—
|
|
|
11,524
|
|
||||||
Change in pension from net unamortized gain (net of taxes of $1,297)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,165
|
|
|
—
|
|
|
—
|
|
|
2,165
|
|
||||||
Common dividends ($0.16 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,516
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,516
|
)
|
||||||
Expense related to stock-based compensation
|
—
|
|
|
—
|
|
|
5,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,189
|
|
||||||
Stock options exercised
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
(1,451
|
)
|
|
—
|
|
|
507,660
|
|
|
9,480
|
|
|
7,953
|
|
||||||
Tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Restricted stock awards granted
|
—
|
|
|
—
|
|
|
(1,752
|
)
|
|
—
|
|
|
—
|
|
|
161,350
|
|
|
1,752
|
|
|
—
|
|
||||||
Performance share awards vested
|
—
|
|
|
—
|
|
|
(1,261
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,261
|
|
|
—
|
|
||||||
Other
|
(51,372
|
)
|
|
(1
|
)
|
|
(917
|
)
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(978
|
)
|
||||||
Balance at October 31, 2017
|
37,508,877
|
|
|
$
|
375
|
|
|
$
|
255,719
|
|
|
$
|
225,704
|
|
|
$
|
(25,076
|
)
|
|
(2,670,743
|
)
|
|
$
|
(49,875
|
)
|
|
$
|
406,847
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
18,683
|
|
|
$
|
(1,859
|
)
|
|
$
|
16,093
|
|
Adjustments to reconcile net income (loss) to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
57,495
|
|
|
53,146
|
|
|
35,220
|
|
|||
Loss (gain) on disposition of capital assets
|
1,528
|
|
|
(20
|
)
|
|
495
|
|
|||
Stock-based compensation
|
5,189
|
|
|
6,089
|
|
|
4,266
|
|
|||
Deferred income tax
|
(112
|
)
|
|
(8,469
|
)
|
|
5,204
|
|
|||
Excess tax benefit from share-based compensation
|
(248
|
)
|
|
(136
|
)
|
|
(60
|
)
|
|||
Charge for deferred loan costs and debt discount
|
—
|
|
|
16,022
|
|
|
—
|
|
|||
Asset impairment charges
|
—
|
|
|
12,602
|
|
|
—
|
|
|||
Gain on involuntary conversion
|
—
|
|
|
—
|
|
|
(1,263
|
)
|
|||
Other, net
|
1,741
|
|
|
339
|
|
|
(19
|
)
|
|||
Changes in assets and liabilities, net of effects from acquisitions:
|
|
|
|
|
|
||||||
Decrease in accounts receivable
|
5,378
|
|
|
796
|
|
|
2,668
|
|
|||
(Increase) decrease in inventory
|
(3,240
|
)
|
|
5,346
|
|
|
9,805
|
|
|||
Decrease (increase) in other current assets
|
186
|
|
|
2,503
|
|
|
(1,304
|
)
|
|||
Decrease in accounts payable
|
(4,893
|
)
|
|
(2,273
|
)
|
|
(2,862
|
)
|
|||
(Decrease) increase in accrued liabilities
|
(8,497
|
)
|
|
1,246
|
|
|
(576
|
)
|
|||
Increase (decrease) in income taxes
|
4,670
|
|
|
(365
|
)
|
|
369
|
|
|||
(Decrease) increase in deferred pension and postretirement benefits
|
(271
|
)
|
|
588
|
|
|
(372
|
)
|
|||
Increase (decrease) in other long-term liabilities
|
1,382
|
|
|
956
|
|
|
(283
|
)
|
|||
Other, net
|
(437
|
)
|
|
(93
|
)
|
|
(294
|
)
|
|||
Cash provided by operating activities
|
78,554
|
|
|
86,418
|
|
|
67,087
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired
|
(8,497
|
)
|
|
(245,904
|
)
|
|
(131,689
|
)
|
|||
Capital expenditures
|
(34,564
|
)
|
|
(37,243
|
)
|
|
(29,982
|
)
|
|||
Proceeds from disposition of capital assets
|
1,937
|
|
|
1,044
|
|
|
264
|
|
|||
Proceeds from property insurance claim
|
—
|
|
|
—
|
|
|
1,263
|
|
|||
Cash used for investing activities
|
(41,124
|
)
|
|
(282,103
|
)
|
|
(160,144
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Borrowings under credit facility
|
53,500
|
|
|
634,800
|
|
|
117,000
|
|
|||
Repayments of credit facility borrowings
|
(98,875
|
)
|
|
(422,875
|
)
|
|
(67,000
|
)
|
|||
Debt issuance costs
|
—
|
|
|
(11,435
|
)
|
|
(496
|
)
|
|||
Repayments of other long-term debt
|
(2,722
|
)
|
|
(2,185
|
)
|
|
(1,020
|
)
|
|||
Common stock dividends paid
|
(5,516
|
)
|
|
(5,470
|
)
|
|
(5,515
|
)
|
|||
Issuance of common stock
|
7,953
|
|
|
3,400
|
|
|
5,109
|
|
|||
Excess tax benefit from share-based compensation
|
248
|
|
|
136
|
|
|
60
|
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(52,719
|
)
|
|||
Cash (used for) provided by financing activities
|
(45,412
|
)
|
|
196,371
|
|
|
(4,581
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(89
|
)
|
|
1,715
|
|
|
379
|
|
|||
(Decrease) increase in cash and cash equivalents
|
(8,071
|
)
|
|
2,401
|
|
|
(97,259
|
)
|
|||
Cash and cash equivalents at beginning of period
|
25,526
|
|
|
23,125
|
|
|
120,384
|
|
|||
Cash and cash equivalents at end of period
|
$
|
17,455
|
|
|
$
|
25,526
|
|
|
$
|
23,125
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Cash paid for interest
|
$
|
9,019
|
|
|
$
|
14,594
|
|
|
$
|
830
|
|
Cash paid for income taxes
|
3,334
|
|
|
3,004
|
|
|
2,561
|
|
|||
Cash received for income tax refunds
|
1,167
|
|
|
1,949
|
|
|
403
|
|
|||
Noncash investing and financing activities:
|
|
|
|
|
|
||||||
Share value cancelled to satisfy tax withholdings
|
$
|
976
|
|
|
$
|
666
|
|
|
$
|
153
|
|
Investment in capital leases
|
16,846
|
|
|
—
|
|
|
—
|
|
|||
Increase (decrease) in capitalized expenditures in accounts payable and accrued liabilities
|
392
|
|
|
(32
|
)
|
|
(204
|
)
|
|||
Debt discount on Term Loan B
|
—
|
|
|
6,200
|
|
|
—
|
|
|||
Recognition of unrecognized tax benefit
|
—
|
|
|
—
|
|
|
10,883
|
|
|||
Debt assumed in acquisition
|
—
|
|
|
—
|
|
|
7,673
|
|
|
As of Date of
Opening Balance Sheet |
||
|
(In thousands)
|
||
Net assets acquired:
|
|
||
Accounts receivable
|
$
|
23,944
|
|
Inventory
|
29,552
|
|
|
Prepaid and other current assets
|
4,081
|
|
|
Property, plant and equipment
|
63,154
|
|
|
Goodwill
|
113,747
|
|
|
Intangible assets
|
62,900
|
|
|
Other non-current assets
|
24
|
|
|
Accounts payable
|
(4,620
|
)
|
|
Accrued expenses
|
(9,492
|
)
|
|
Deferred income tax liabilities, net
|
(37,386
|
)
|
|
Net assets acquired
|
$
|
245,904
|
|
Consideration:
|
|
||
Cash, net of cash and cash equivalents acquired
|
$
|
245,904
|
|
|
Pro Forma Results
|
||
|
For the Years Ended
|
||
|
October 31, 2015
|
||
|
(In thousands, unaudited)
|
||
Net sales
|
$
|
935,196
|
|
Income from continuing operations
|
$
|
26,587
|
|
Net income
|
$
|
27,066
|
|
Basic earnings per share
|
$
|
0.77
|
|
Diluted earnings per share
|
$
|
0.77
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Trade receivables
|
$
|
79,221
|
|
|
$
|
83,384
|
|
Other
|
523
|
|
|
492
|
|
||
Total
|
$
|
79,744
|
|
|
$
|
83,876
|
|
Less: Allowance for doubtful accounts
|
333
|
|
|
251
|
|
||
Accounts receivable, net
|
$
|
79,411
|
|
|
$
|
83,625
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance as of November 1, 2016, 2015 and 2014, respectively
|
$
|
251
|
|
|
$
|
673
|
|
|
$
|
698
|
|
Bad debt expense (benefit)
|
131
|
|
|
(67
|
)
|
|
25
|
|
|||
Amounts written off
|
(49
|
)
|
|
(371
|
)
|
|
(66
|
)
|
|||
Recoveries
|
—
|
|
|
16
|
|
|
16
|
|
|||
Balance as of October 31,
|
$
|
333
|
|
|
$
|
251
|
|
|
$
|
673
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
50,472
|
|
|
$
|
50,584
|
|
Finished goods and work in process
|
40,087
|
|
|
36,886
|
|
||
Supplies and other
|
2,655
|
|
|
1,859
|
|
||
Total
|
$
|
93,214
|
|
|
$
|
89,329
|
|
Less: Inventory reserves
|
5,685
|
|
|
4,994
|
|
||
Inventories, net
|
$
|
87,529
|
|
|
$
|
84,335
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Beginning balance as of November 1, 2016, 2015 and 2014, respectively
|
$
|
4,994
|
|
|
$
|
8,106
|
|
|
$
|
5,757
|
|
Charged (credited) to cost of sales
|
1,296
|
|
|
8
|
|
|
2,853
|
|
|||
Write-offs
|
(661
|
)
|
|
(3,048
|
)
|
|
(504
|
)
|
|||
Other
|
56
|
|
|
(72
|
)
|
|
—
|
|
|||
Balance as of October 31,
|
$
|
5,685
|
|
|
$
|
4,994
|
|
|
$
|
8,106
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
LIFO
|
$
|
4,444
|
|
|
$
|
4,017
|
|
FIFO
|
83,085
|
|
|
80,318
|
|
||
Total
|
$
|
87,529
|
|
|
$
|
84,335
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Land and land improvements
|
$
|
10,491
|
|
|
$
|
10,264
|
|
Buildings and building improvements
|
96,622
|
|
|
76,710
|
|
||
Machinery and equipment
|
354,197
|
|
|
340,665
|
|
||
Construction in progress
|
13,868
|
|
|
15,986
|
|
||
Property, plant and equipment, gross
|
475,178
|
|
|
443,625
|
|
||
Less: Accumulated depreciation
|
264,047
|
|
|
245,128
|
|
||
Property, plant and equipment, net
|
$
|
211,131
|
|
|
$
|
198,497
|
|
|
Year Ended October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Beginning balance as of November 1, 2016 and 2015
|
$
|
217,035
|
|
|
$
|
129,770
|
|
Acquisitions
|
—
|
|
|
113,747
|
|
||
Goodwill impairment charge
|
—
|
|
|
(12,602
|
)
|
||
Other
|
—
|
|
|
(575
|
)
|
||
Foreign currency translation adjustment
|
5,159
|
|
|
(13,305
|
)
|
||
Balance as of October 31,
|
$
|
222,194
|
|
|
$
|
217,035
|
|
|
October 31, 2017
|
|
October 31, 2017
|
|
October 31, 2016
|
||||||||||||
|
Remaining Weighted Average Useful Life
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
|
|
|
(In thousands)
|
||||||||||||||
Customer relationships
|
12 years
|
|
$
|
155,230
|
|
|
$
|
48,479
|
|
|
$
|
152,146
|
|
|
$
|
35,693
|
|
Trademarks and trade names
|
12 years
|
|
56,058
|
|
|
29,509
|
|
|
55,481
|
|
|
26,288
|
|
||||
Patents and other technology
|
4 years
|
|
22,624
|
|
|
16,146
|
|
|
24,671
|
|
|
16,137
|
|
||||
Total
|
|
|
$
|
233,912
|
|
|
$
|
94,134
|
|
|
$
|
232,298
|
|
|
$
|
78,118
|
|
|
Estimated
Amortization Expense
|
||
2018
|
$
|
16,181
|
|
2019
|
15,395
|
|
|
2020
|
14,338
|
|
|
2021
|
12,617
|
|
|
2022
|
11,993
|
|
|
Thereafter
|
69,254
|
|
|
Total
|
$
|
139,778
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Payroll, payroll taxes and employee benefits
|
$
|
16,733
|
|
|
$
|
27,406
|
|
Accrued insurance and workers compensation
|
3,591
|
|
|
3,946
|
|
||
Sales allowances
|
9,070
|
|
|
6,197
|
|
||
Deferred compensation (current portion)
|
669
|
|
|
362
|
|
||
Deferred revenue
|
625
|
|
|
238
|
|
||
Warranties
|
168
|
|
|
295
|
|
||
Audit, legal, and other professional fees
|
2,096
|
|
|
2,456
|
|
||
Accrued taxes
|
2,656
|
|
|
2,151
|
|
||
Accrued rent
|
7
|
|
|
120
|
|
||
Earn-out liability
(1)
|
—
|
|
|
8,376
|
|
||
Other
|
3,256
|
|
|
3,554
|
|
||
Accrued liabilities
|
$
|
38,871
|
|
|
$
|
55,101
|
|
(1)
|
Amount relates to acquisition earn-out payment for HLP, paid on November 7, 2016. For additional details, see Note 2, "Acquisitions and Dispositions" located elsewhere herein.
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Revolving Credit Facility
|
$
|
84,000
|
|
|
$
|
120,000
|
|
Term Loan A
|
138,750
|
|
|
148,125
|
|
||
City of Richmond, Kentucky Industrial Building Revenue Bonds
|
—
|
|
|
400
|
|
||
Capital lease obligations
|
18,764
|
|
|
3,683
|
|
||
Unamortized deferred financing fees
|
$
|
(2,088
|
)
|
|
$
|
(2,677
|
)
|
Total debt
|
$
|
239,426
|
|
|
$
|
269,531
|
|
Less: Current maturities of long-term debt
|
21,242
|
|
|
10,520
|
|
||
Long-term debt
|
$
|
218,184
|
|
|
$
|
259,011
|
|
|
Required
|
|
Actual
|
|
Minimum Interest Coverage Ratio
|
No less than
|
3.00:1
|
|
69.71:1
|
Maximum Consolidated Leverage Ratio
|
No greater than
|
3.25:1
|
|
0.92:1
|
Level
|
|
Average Aggregate
Excess Availability
|
|
Applicable Margin Relative to
Base Rate Loans
|
|
Applicable Margin Relative to
LIBOR Rate Loans
|
I
|
|
> 66.7% of the Maximum Revolver Amount
|
|
0.50 percentage points
|
|
1.50 percentage points
|
II
|
|
< 66.7% of the Maximum Revolver Amount and 33.3% of the Maximum Revolver Amount
|
|
0.75 percentage points
|
|
1.75 percentage points
|
III
|
|
< 33.3% of the Maximum Revolver Amount
|
|
1.00 percentage points
|
|
2.00 percentage points
|
Level
|
|
Average Revolver Usage
|
|
Applicable Unused Line Fee Percentage
|
I
|
|
> 50% of the Maximum Revolver Amount
|
|
0.25 percentage points
|
II
|
|
< 50% of the Maximum Revolver Amount
|
|
0.375 percentage points
|
Pricing Level
|
|
Consolidated Leverage Ratio
|
|
Commitment Fee
|
|
LIBOR Rate Loans
|
|
Base Rate Loans
|
I
|
|
Less than or equal to 1.50 to 1.00
|
|
0.200%
|
|
1.50%
|
|
0.50%
|
II
|
|
Greater than 1.50 to 1.00, but less than or equal to 2.25 to 1.00
|
|
0.225%
|
|
1.75%
|
|
0.75%
|
III
|
|
Greater than 2.25 to 1.00, but less than or equal to 3.00 to 1.00
|
|
0.250%
|
|
2.00%
|
|
1.00%
|
IV
|
|
Greater than 3.00 to 1.00
|
|
0.300%
|
|
2.25%
|
|
1.25%
|
Period
|
|
Maximum Ratio
|
Closing Date through January 30, 2017
|
|
3.50 to 1.00
|
January 31, 2017 through January 30, 2018
|
|
3.25 to 1.00
|
January 31, 2018 and thereafter
|
|
3.00 to 1.00
|
|
Other Long Term Debt
|
|
Capital Lease Obligations
|
|
Aggregate Maturities
|
||||||
2018
|
$
|
14,444
|
|
|
$
|
1,798
|
|
|
$
|
16,242
|
|
2019
|
14,443
|
|
|
1,466
|
|
|
15,909
|
|
|||
2020
|
16,318
|
|
|
927
|
|
|
17,245
|
|
|||
2021
|
175,457
|
|
|
726
|
|
|
176,183
|
|
|||
2022
|
—
|
|
|
747
|
|
|
747
|
|
|||
Thereafter
|
—
|
|
|
13,100
|
|
|
13,100
|
|
|||
Total
|
$
|
220,662
|
|
|
$
|
18,764
|
|
|
$
|
239,426
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
Change in Benefit Obligation:
|
(In thousands)
|
||||||
Beginning balance as of November 1, 2016 and 2015, respectively
|
$
|
36,892
|
|
|
$
|
31,035
|
|
Service cost
|
3,794
|
|
|
3,712
|
|
||
Interest cost
|
859
|
|
|
828
|
|
||
Actuarial (gain) loss
|
(318
|
)
|
|
3,008
|
|
||
Benefits paid
|
(2,263
|
)
|
|
(1,061
|
)
|
||
Administrative expenses
|
(641
|
)
|
|
(630
|
)
|
||
Projected benefit obligation at October 31,
|
$
|
38,323
|
|
|
$
|
36,892
|
|
Change in Plan Assets:
|
|
|
|
||||
Beginning balance as of November 1, 2016 and 2015, respectively
|
$
|
29,210
|
|
|
$
|
26,132
|
|
Actual return on plan assets
|
4,434
|
|
|
1,069
|
|
||
Employer contributions
|
3,600
|
|
|
3,700
|
|
||
Benefits paid
|
(2,263
|
)
|
|
(1,061
|
)
|
||
Administrative expenses
|
(641
|
)
|
|
(630
|
)
|
||
Fair value of plan assets at October 31,
|
$
|
34,340
|
|
|
$
|
29,210
|
|
Non current liability - Funded Status
|
$
|
(3,983
|
)
|
|
$
|
(7,682
|
)
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Service cost
|
$
|
3,794
|
|
|
$
|
3,712
|
|
|
$
|
3,288
|
|
Interest cost
|
859
|
|
|
828
|
|
|
1,026
|
|
|||
Expected return on plan assets
|
(1,863
|
)
|
|
(1,617
|
)
|
|
(1,791
|
)
|
|||
Amortization of net loss
|
574
|
|
|
384
|
|
|
—
|
|
|||
Net periodic benefit cost
|
$
|
3,364
|
|
|
$
|
3,307
|
|
|
$
|
2,523
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Net (gain) loss arising during the period
|
$
|
(2,888
|
)
|
|
$
|
3,556
|
|
|
$
|
1,439
|
|
Less: Amortization of net loss
|
$
|
574
|
|
|
$
|
384
|
|
|
$
|
159
|
|
Total recognized in other comprehensive loss
|
$
|
(3,462
|
)
|
|
$
|
3,172
|
|
|
$
|
1,280
|
|
|
For the Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
Weighted Average Assumptions:
|
Benefit Obligation
|
|
Net Periodic Benefit Cost
|
||||||||
Discount rate
|
3.68%
|
|
3.41%
|
|
3.92%
|
|
3.66%
|
|
3.92%
|
|
3.64%
|
Rate of compensation increase
|
3.00%
|
|
3.00%
|
|
3.00%
|
|
3.00%
|
|
3.00%
|
|
3.00%
|
Expected return on plan assets
|
n/a
|
|
n/a
|
|
n/a
|
|
6.50%
|
|
6.50%
|
|
6.75%
|
|
Target Allocation
|
|
Actual Allocation
|
|||||
|
October 31, 2017
|
|
October 31, 2017
|
|
October 31, 2016
|
|||
Equity securities
|
60.0
|
%
|
|
60.0
|
%
|
|
60.0
|
%
|
Fixed income
|
40.0
|
%
|
|
40.0
|
%
|
|
40.0
|
%
|
|
Fair Value Measurements at
|
||||||
|
October 31, 2017
|
|
October 31, 2016
|
||||
|
(In thousands)
|
||||||
Money market fund
|
$
|
204
|
|
|
$
|
31
|
|
|
|
|
|
||||
Large capitalization
|
$
|
10,972
|
|
|
$
|
9,297
|
|
Small capitalization
|
4,102
|
|
|
3,442
|
|
||
International equity
|
3,756
|
|
|
3,191
|
|
||
Other
|
1,695
|
|
|
1,451
|
|
||
Equity securities
|
$
|
20,525
|
|
|
$
|
17,381
|
|
|
|
|
|
||||
High-quality core bond
|
$
|
6,801
|
|
|
$
|
5,888
|
|
High-quality government bond
|
3,407
|
|
|
2,954
|
|
||
High-yield bond
|
3,403
|
|
|
2,956
|
|
||
Fixed income
|
$
|
13,611
|
|
|
$
|
11,798
|
|
Total securities
(1)
|
$
|
34,340
|
|
|
$
|
29,210
|
|
(1)
|
Quoted prices in active markets for identical assets (Level 1).
|
|
Pension Benefits
|
||
2018
|
$
|
2,156
|
|
2019
|
2,373
|
|
|
2020
|
2,554
|
|
|
2021
|
2,713
|
|
|
2022
|
2,858
|
|
|
2023 - 2027
|
15,932
|
|
|
Total
|
$
|
28,586
|
|
|
October 31, 2017
|
|
October 31, 2016
|
||||
|
(In thousands)
|
||||||
Accrued liabilities
|
$
|
49
|
|
|
$
|
49
|
|
Deferred pension and postretirement benefits
|
450
|
|
|
485
|
|
||
Total
|
$
|
499
|
|
|
$
|
534
|
|
|
Year Ended October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Beginning balance as of November 1, 2016, and 2015, respectively
|
$
|
446
|
|
|
$
|
535
|
|
Provision for warranty expense
|
41
|
|
|
90
|
|
||
Change in accrual for preexisting warranties
|
(121
|
)
|
|
(62
|
)
|
||
Warranty costs paid
|
(43
|
)
|
|
(117
|
)
|
||
Total accrued warranty
|
$
|
323
|
|
|
$
|
446
|
|
Less: Current portion of accrued warranty
|
168
|
|
|
295
|
|
||
Long-term portion at October 31,
|
$
|
155
|
|
|
$
|
151
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
1,991
|
|
|
$
|
1,309
|
|
|
$
|
49
|
|
State and local
|
873
|
|
|
154
|
|
|
216
|
|
|||
Non-United States
|
4,067
|
|
|
3,241
|
|
|
2,070
|
|
|||
Total current
|
6,931
|
|
|
4,704
|
|
|
2,335
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
1,860
|
|
|
(5,932
|
)
|
|
5,766
|
|
|||
State and local
|
(450
|
)
|
|
(712
|
)
|
|
439
|
|
|||
Non-United States
|
(1,522
|
)
|
|
(1,825
|
)
|
|
(1,001
|
)
|
|||
Total deferred
|
(112
|
)
|
|
(8,469
|
)
|
|
5,204
|
|
|||
Total income tax provision (benefit)
|
$
|
6,819
|
|
|
$
|
(3,765
|
)
|
|
$
|
7,539
|
|
|
Year Ended October 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
United States tax at statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income tax
|
1.7
|
|
|
7.4
|
|
|
2.3
|
|
Non-United States income tax
|
(9.1
|
)
|
|
32.0
|
|
|
(1.5
|
)
|
Deferred rate impact
|
(4.1
|
)
|
|
15.2
|
|
|
0.5
|
|
General business credits
|
(0.5
|
)
|
|
6.4
|
|
|
(1.0
|
)
|
Transaction costs
|
—
|
|
|
(17.0
|
)
|
|
2.5
|
|
Uncertain tax positions
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
Change in valuation allowance
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(0.5
|
)
|
Other permanent differences
|
3.3
|
|
|
(5.8
|
)
|
|
(1.5
|
)
|
Return to actual adjustments
|
1.0
|
|
|
(5.4
|
)
|
|
0.2
|
|
Effective tax rate
|
26.7
|
%
|
|
66.9
|
%
|
|
32.6
|
%
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Employee benefit obligations
|
$
|
12,731
|
|
|
$
|
16,694
|
|
Accrued liabilities and reserves
|
2,409
|
|
|
2,929
|
|
||
Pension and other benefit obligations
|
2,968
|
|
|
4,087
|
|
||
Inventory
|
1,614
|
|
|
1,759
|
|
||
Loss and tax credit carry forwards
|
8,098
|
|
|
9,589
|
|
||
Other
|
194
|
|
|
193
|
|
||
Total gross deferred tax assets
|
28,014
|
|
|
35,251
|
|
||
Less: Valuation allowance
|
1,304
|
|
|
1,279
|
|
||
Total deferred tax assets, net of valuation allowance
|
26,710
|
|
|
33,972
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
16,128
|
|
|
18,946
|
|
||
Goodwill and intangibles
|
32,542
|
|
|
33,348
|
|
||
Total deferred tax liabilities
|
48,670
|
|
|
52,294
|
|
||
|
|
|
|
||||
Net deferred tax liabilities
|
$
|
21,960
|
|
|
$
|
18,322
|
|
|
|
Unrecognized
Income Tax Benefits
|
||
Balance at October 31, 2014
|
|
$
|
11,431
|
|
Additions for tax positions related to the current year
|
|
—
|
|
|
Additions for tax positions related to the prior year
|
|
16
|
|
|
Lapse in statute of limitations
|
|
(10,883
|
)
|
|
Balance at October 31, 2015
|
|
$
|
564
|
|
Additions for tax positions related to the current year
|
|
—
|
|
|
Additions for tax positions related to the prior year
|
|
15
|
|
|
Balance at October 31, 2016
|
|
$
|
579
|
|
Additions for tax positions related to the current year
|
|
—
|
|
|
Additions for tax positions related to the prior year
|
|
12
|
|
|
Balance at October 31, 2017
|
|
$
|
591
|
|
|
Operating
Leases
|
||
2018
|
$
|
9,331
|
|
2019
|
8,293
|
|
|
2020
|
6,942
|
|
|
2021
|
4,845
|
|
|
2022
|
4,135
|
|
|
Thereafter
|
22,567
|
|
|
Total
|
$
|
56,113
|
|
|
Year Ended October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Beginning balance as of November 1, 2016, and 2015, respectively
|
$
|
801
|
|
|
$
|
1,133
|
|
Additional claims received
|
1,482
|
|
|
1,147
|
|
||
Claim payments made
|
(1,058
|
)
|
|
(1,476
|
)
|
||
Foreign currency translation adjustment
|
69
|
|
|
(3
|
)
|
||
Total spacer migration accrual
|
$
|
1,294
|
|
|
$
|
801
|
|
|
|
Year Ended October 31,
|
|||||||
Derivatives Not Designated as Hedging Instruments
|
Location of Gain or (Loss):
|
2017
|
|
2016
|
|
2015
|
|||
Foreign currency derivatives
|
Other, net
|
(88
|
)
|
|
77
|
|
|
654
|
|
|
|
Notional as indicated
|
|
Fair Value in $
|
||||||||||
|
|
October 31,
2017 |
|
October 31,
2016 |
|
October 31,
2017 |
|
October 31,
2016 |
||||||
Foreign currency derivatives:
|
|
|
|
|
|
|
|
|
||||||
Sell EUR, Buy USD
|
EUR
|
1,271
|
|
|
5,251
|
|
|
$
|
24
|
|
|
$
|
(79
|
)
|
Sell CAD, Buy USD
|
CAD
|
320
|
|
|
186
|
|
|
1
|
|
|
1
|
|
||
Sell GBP, Buy USD
|
GBP
|
75
|
|
|
187
|
|
|
—
|
|
|
(1
|
)
|
||
Buy EUR, Sell GBP
|
EUR
|
30
|
|
|
130
|
|
|
(1
|
)
|
|
1
|
|
||
Buy USD, Sell EUR
|
USD
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
•
|
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
|
|
October 31, 2017
|
|
October 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency derivatives
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Total assets
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency derivatives
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
—
|
|
|
$
|
80
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,376
|
|
|
8,376
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
80
|
|
|
$
|
8,376
|
|
|
$
|
8,456
|
|
|
Restricted Stock Awards
|
|
Weighted Average
Grant Date Fair Value per Share
|
|||
Non-vested at October 31, 2014
|
220,800
|
|
|
$
|
17.42
|
|
Granted
|
118,800
|
|
|
20.17
|
|
|
Vested
|
(34,000
|
)
|
|
15.12
|
|
|
Forfeited
|
(12,600
|
)
|
|
19.57
|
|
|
Non-vested at October 31, 2015
|
293,000
|
|
|
18.71
|
|
|
Granted
|
85,500
|
|
|
19.21
|
|
|
Vested
|
(102,000
|
)
|
|
17.84
|
|
|
Forfeited
|
(9,800
|
)
|
|
18.97
|
|
|
Non-vested at October 31, 2016
|
266,700
|
|
|
19.19
|
|
|
Granted
|
93,800
|
|
|
19.46
|
|
|
Vested
|
(73,100
|
)
|
|
17.67
|
|
|
Forfeited
|
(3,100
|
)
|
|
19.65
|
|
|
Non-vested at October 31, 2017
|
284,300
|
|
|
$
|
19.66
|
|
•
|
Expected Volatility
– For stock options granted prior to July 1, 2013, we used an estimate of the historical volatility of a selected peer group. Effective July 1, 2013, we determined that we had sufficient historical data to calculate the volatility of our common stock since our spin-off in April 2008. We believe there has been uncertainty in the United States equities market over the past several years and that uncertainty has contributed to volatility in equities in general. We expect this volatility to continue over the foreseeable future. Therefore, we believe that our historical volatility is a proxy for expected volatility. We have not excluded any of our historical data from the volatility calculation, and we are not aware of any specific significant factors which might impact our future volatility.
|
•
|
Expected Term
– For stock options granted prior to July 1, 2013, we determined the expected term using historical information of our former parent company prior to the spin-off in 2008, with regards to option vesting, exercise behavior and contractual expiration, as we believed that this employee group was the most similar to our employee group. Separate groups of employees that have similar historical exercise behavior were considered separately. Effective July 1, 2013, we determined that we had sufficient historical data to estimate our expected term using our own data with regards to the exercise behavior, cancellations, retention patterns and remaining contractual terms. When analyzing these patterns and variables, we considered the stratification of the awards (large grants to relatively few employees versus smaller grants to many others), the age of certain employees with larger grants, the historical exercise behavior of the employee group, and fluctuations/volatility of our underlying common stock, as to whether the stock options are expected to be out-of-the-money. For our directors, stock options vested immediately, and, as such, the expected term approximated the contractual term, after adjusting for historical forfeitures. We believe our estimates are reasonable given these factors.
|
•
|
Risk-Free Rate
– We base the risk-free rate on the yield at the date of grant of a zero-coupon United States Treasury bond whose maturity period equals the option’s expected term.
|
•
|
Expected Dividend Yield
– We base the expected dividend yield on our historical dividend payment of approximately
$0.16
per share.
|
|
Year Ended October 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Weighted-average expected volatility
|
34.7%
|
|
37.1%
|
|
47.7%
|
Weighted-average expected term (in years)
|
5.7
|
|
5.4
|
|
5.6
|
Risk-free interest rate
|
2.0%
|
|
1.7%
|
|
1.6%
|
Expected dividend yield over expected term
|
1.0%
|
|
1.0%
|
|
1.0%
|
Weighted average grant date fair value
|
$6.25
|
|
$6.32
|
|
$8.40
|
|
Stock Options
|
|
Weighted Average
Exercise Price
|
|
Weighted Average
Remaining Contractual
Term (in years)
|
|
Aggregate
Intrinsic
Value (000s)
|
|||||
Outstanding at October 31, 2014
|
2,588,389
|
|
|
$
|
16.21
|
|
|
6.2
|
|
$
|
10,238
|
|
Granted
|
123,900
|
|
|
20.28
|
|
|
|
|
|
|||
Exercised
|
(327,700
|
)
|
|
15.59
|
|
|
|
|
|
|||
Forfeited/Expired
|
(32,401
|
)
|
|
20.21
|
|
|
|
|
|
|||
Outstanding at October 31, 2015
|
2,352,188
|
|
|
16.46
|
|
|
5.4
|
|
$
|
6,672
|
|
|
Granted
|
297,900
|
|
|
19.23
|
|
|
|
|
|
|||
Exercised
|
(221,850
|
)
|
|
15.43
|
|
|
|
|
|
|||
Forfeited/Expired
|
(42,018
|
)
|
|
19.78
|
|
|
|
|
|
|||
Outstanding at October 31, 2016
|
2,386,220
|
|
|
16.84
|
|
|
5.1
|
|
$
|
2,384
|
|
|
Granted
|
292,600
|
|
|
19.45
|
|
|
|
|
|
|||
Exercised
|
(507,660
|
)
|
|
15.67
|
|
|
|
|
|
|||
Forfeited/Expired
|
(18,402
|
)
|
|
19.90
|
|
|
|
|
|
|||
Outstanding at October 31, 2017
|
2,152,758
|
|
|
17.44
|
|
|
5.2
|
|
$
|
9,700
|
|
|
Vested or expected to vest at October 31, 2017
|
2,150,002
|
|
|
17.44
|
|
|
5.2
|
|
$
|
9,695
|
|
|
Exercisable at October 31, 2017
|
1,644,650
|
|
|
$
|
16.83
|
|
|
4.2
|
|
$
|
8,419
|
|
|
Grant Date Fair Value
|
||||||||||||
Grant Date
|
Shares Awarded
|
|
EPS
|
|
R-TSR
|
|
Forfeited
|
||||||
December 3, 2014
|
137,400
|
|
|
$
|
20.28
|
|
|
$
|
26.01
|
|
|
13,800
|
|
December 2, 2015
|
158,100
|
|
|
19.31
|
|
|
23.72
|
|
|
11,100
|
|
||
January 25, 2016
|
4,300
|
|
|
17.46
|
|
|
26.65
|
|
|
—
|
|
||
November 30, 2016
|
186,500
|
|
|
$
|
19.45
|
|
|
$
|
26.61
|
|
|
2,400
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Restricted stock awards
|
$
|
1,810
|
|
|
$
|
1,911
|
|
|
$
|
1,670
|
|
Stock options
|
1,820
|
|
|
2,486
|
|
|
1,713
|
|
|||
Restricted stock units
|
855
|
|
|
161
|
|
|
(57
|
)
|
|||
Performance share awards
|
3,001
|
|
|
2,703
|
|
|
1,504
|
|
|||
Total compensation expense
|
7,486
|
|
|
7,261
|
|
|
4,830
|
|
|||
Income tax effect
|
1,999
|
|
|
4,858
|
|
|
1,575
|
|
|||
Net compensation expense
|
$
|
5,487
|
|
|
$
|
2,403
|
|
|
$
|
3,255
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign currency transaction gains (losses)
|
$
|
713
|
|
|
$
|
(5,457
|
)
|
|
$
|
(1,433
|
)
|
Foreign currency exchange derivative (losses) gains
|
(88
|
)
|
|
77
|
|
|
654
|
|
|||
Interest income
|
86
|
|
|
106
|
|
|
64
|
|
|||
Other
|
19
|
|
|
(205
|
)
|
|
184
|
|
|||
Other income (expense)
|
$
|
730
|
|
|
$
|
(5,479
|
)
|
|
$
|
(531
|
)
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
NA Engineered Components
|
$
|
9,327
|
|
|
$
|
10,487
|
|
|
$
|
9,638
|
|
EU Engineered Components
|
3,392
|
|
|
3,814
|
|
|
2,109
|
|
|||
NA Cabinet Components
|
4,239
|
|
|
4,767
|
|
|
—
|
|
|||
Unallocated Corporate & Other
|
—
|
|
|
—
|
|
|
5,776
|
|
|||
Allocated general and administrative expense
|
$
|
16,958
|
|
|
$
|
19,068
|
|
|
$
|
17,523
|
|
|
NA Eng Comp.
|
|
EU Eng. Comp.
|
|
NA Cabinet Comp.
|
|
Unallocated Corp. & Other
|
|
Total
|
||||||||||
Year Ended October 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
474,878
|
|
|
$
|
147,963
|
|
|
$
|
248,808
|
|
|
$
|
(5,094
|
)
|
|
$
|
866,555
|
|
Depreciation and amortization
|
34,308
|
|
|
8,833
|
|
|
13,811
|
|
|
543
|
|
|
57,495
|
|
|||||
Operating income (loss)
|
26,311
|
|
|
13,673
|
|
|
4,128
|
|
|
(9,745
|
)
|
|
34,367
|
|
|||||
Capital expenditures
|
18,822
|
|
|
7,841
|
|
|
7,349
|
|
|
552
|
|
|
34,564
|
|
|||||
Total assets
|
$
|
258,315
|
|
|
$
|
219,622
|
|
|
$
|
285,457
|
|
|
$
|
10,485
|
|
|
$
|
773,879
|
|
Year Ended October 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
538,249
|
|
|
$
|
150,203
|
|
|
$
|
248,119
|
|
|
$
|
(8,387
|
)
|
|
$
|
928,184
|
|
Depreciation and amortization
|
29,793
|
|
|
9,339
|
|
|
13,453
|
|
|
561
|
|
|
53,146
|
|
|||||
Operating income (loss)
|
34,229
|
|
|
13,225
|
|
|
5,475
|
|
|
(16,576
|
)
|
|
36,353
|
|
|||||
Capital expenditures
|
22,114
|
|
|
6,141
|
|
|
8,709
|
|
|
279
|
|
|
37,243
|
|
|||||
Total assets
|
$
|
282,371
|
|
|
$
|
190,995
|
|
|
$
|
295,366
|
|
|
$
|
11,621
|
|
|
$
|
780,353
|
|
Year Ended October 31, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
534,009
|
|
|
$
|
93,644
|
|
|
$
|
26,440
|
|
|
$
|
(8,565
|
)
|
|
$
|
645,528
|
|
Depreciation and amortization
|
28,429
|
|
|
5,020
|
|
|
482
|
|
|
1,289
|
|
|
35,220
|
|
|||||
Operating income (loss)
|
35,866
|
|
|
3,253
|
|
|
3,387
|
|
|
(17,831
|
)
|
|
24,675
|
|
|||||
Capital expenditures
|
24,713
|
|
|
4,396
|
|
|
786
|
|
|
87
|
|
|
29,982
|
|
Year Ended October 31, 2016
|
As Previously Reported
|
|
Reclassification
|
|
Current Presentation
|
||||||
|
(in thousands)
|
||||||||||
NA Engineered Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
560,029
|
|
|
$
|
(21,780
|
)
|
|
$
|
538,249
|
|
Depreciation and amortization
|
30,298
|
|
|
(505
|
)
|
|
29,793
|
|
|||
Operating income (loss)
|
37,883
|
|
|
(3,654
|
)
|
|
34,229
|
|
|||
Capital expenditures
|
22,713
|
|
|
(599
|
)
|
|
22,114
|
|
|||
Total assets
|
$
|
290,725
|
|
|
$
|
(8,354
|
)
|
|
$
|
282,371
|
|
EU Engineered Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
150,203
|
|
|
$
|
—
|
|
|
$
|
150,203
|
|
Depreciation and amortization
|
9,339
|
|
|
—
|
|
|
9,339
|
|
|||
Operating income (loss)
|
13,225
|
|
|
—
|
|
|
13,225
|
|
|||
Capital expenditures
|
6,141
|
|
|
—
|
|
|
6,141
|
|
|||
Total assets
|
$
|
190,995
|
|
|
$
|
—
|
|
|
$
|
190,995
|
|
NA Cabinet Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
223,391
|
|
|
$
|
24,728
|
|
|
$
|
248,119
|
|
Depreciation and amortization
|
12,948
|
|
|
505
|
|
|
13,453
|
|
|||
Operating income (loss)
|
1,821
|
|
|
3,654
|
|
|
5,475
|
|
|||
Capital expenditures
|
8,110
|
|
|
599
|
|
|
8,709
|
|
|||
Total assets
|
$
|
287,012
|
|
|
$
|
8,354
|
|
|
$
|
295,366
|
|
Unallocated Corporate & Other
|
|
|
|
|
|
||||||
Net sales
|
$
|
(5,439
|
)
|
|
$
|
(2,948
|
)
|
|
$
|
(8,387
|
)
|
Depreciation and amortization
|
561
|
|
|
—
|
|
|
561
|
|
|||
Operating income (loss)
|
(16,576
|
)
|
|
—
|
|
|
(16,576
|
)
|
|||
Capital expenditures
|
279
|
|
|
—
|
|
|
279
|
|
|||
Total assets
|
$
|
11,621
|
|
|
$
|
—
|
|
|
$
|
11,621
|
|
Year Ended October 31, 2015
|
As Previously Reported
|
|
Reclassification
|
|
Current Presentation
|
||||||
|
(in thousands)
|
||||||||||
NA Engineered Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
556,550
|
|
|
$
|
(22,541
|
)
|
|
$
|
534,009
|
|
Depreciation and amortization
|
28,911
|
|
|
(482
|
)
|
|
28,429
|
|
|||
Operating income (loss)
|
39,253
|
|
|
(3,388
|
)
|
|
35,865
|
|
|||
Capital expenditures
|
25,499
|
|
|
(786
|
)
|
|
24,713
|
|
|||
Total assets
|
$
|
314,397
|
|
|
$
|
(8,800
|
)
|
|
$
|
305,597
|
|
EU Engineered Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
93,644
|
|
|
$
|
—
|
|
|
$
|
93,644
|
|
Depreciation and amortization
|
5,020
|
|
|
—
|
|
|
5,020
|
|
|||
Operating income (loss)
|
3,253
|
|
|
—
|
|
|
3,253
|
|
|||
Capital expenditures
|
4,396
|
|
|
—
|
|
|
4,396
|
|
|||
Total assets
|
$
|
231,261
|
|
|
$
|
—
|
|
|
$
|
231,261
|
|
NA Cabinet Components
|
|
|
|
|
|
||||||
Net sales
|
$
|
—
|
|
|
$
|
26,440
|
|
|
$
|
26,440
|
|
Depreciation and amortization
|
—
|
|
|
482
|
|
|
482
|
|
|||
Operating income (loss)
|
—
|
|
|
3,387
|
|
|
3,387
|
|
|||
Capital expenditures
|
—
|
|
|
786
|
|
|
786
|
|
|||
Total assets
|
$
|
—
|
|
|
$
|
8,800
|
|
|
$
|
8,800
|
|
Unallocated Corporate & Other
|
|
|
|
|
|
||||||
Net sales
|
$
|
(4,666
|
)
|
|
$
|
(3,899
|
)
|
|
$
|
(8,565
|
)
|
Depreciation and amortization
|
1,289
|
|
|
—
|
|
|
1,289
|
|
|||
Operating income (loss)
|
(17,831
|
)
|
|
—
|
|
|
(17,831
|
)
|
|||
Capital expenditures
|
87
|
|
|
—
|
|
|
87
|
|
|||
Total assets
|
$
|
19,858
|
|
|
$
|
—
|
|
|
$
|
19,858
|
|
|
NA Eng. Comp.
|
|
EU Eng. Comp.
|
|
NA Cabinet Comp.
|
|
Unalloc. Corp. & Other
|
|
Total
|
||||||||||
Balance as of October 31, 2015
|
$
|
51,314
|
|
|
$
|
78,456
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
129,770
|
|
Woodcraft acquisition
|
—
|
|
|
—
|
|
|
113,747
|
|
|
—
|
|
|
113,747
|
|
|||||
Asset impairment charge
|
(12,602
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,602
|
)
|
|||||
Other
|
—
|
|
|
(575
|
)
|
|
—
|
|
|
—
|
|
|
(575
|
)
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
(13,305
|
)
|
|
—
|
|
|
—
|
|
|
(13,305
|
)
|
|||||
Balance as of October 31, 2016
|
$
|
38,712
|
|
|
$
|
64,576
|
|
|
$
|
113,747
|
|
|
$
|
—
|
|
|
$
|
217,035
|
|
Foreign currency translation adjustment
|
—
|
|
|
5,159
|
|
|
—
|
|
|
—
|
|
|
5,159
|
|
|||||
Balance as of October 31, 2017
|
$
|
38,712
|
|
|
$
|
69,735
|
|
|
$
|
113,747
|
|
|
$
|
—
|
|
|
$
|
222,194
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Operating income
|
$
|
34,367
|
|
|
$
|
36,353
|
|
|
$
|
24,675
|
|
Interest expense
|
(9,595
|
)
|
|
(36,498
|
)
|
|
(991
|
)
|
|||
Other, net
|
730
|
|
|
(5,479
|
)
|
|
(531
|
)
|
|||
Income tax (expense) benefit
|
(6,819
|
)
|
|
3,765
|
|
|
(7,539
|
)
|
|||
Income (loss) from continuing operations
|
$
|
18,683
|
|
|
$
|
(1,859
|
)
|
|
$
|
15,614
|
|
|
Year Ended October 31,
|
||||||||||
Net Sales:
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
667,063
|
|
|
$
|
724,045
|
|
|
$
|
500,171
|
|
Europe
|
148,370
|
|
|
150,710
|
|
|
94,564
|
|
|||
Canada
|
24,442
|
|
|
24,141
|
|
|
22,973
|
|
|||
Asia
|
17,028
|
|
|
20,404
|
|
|
19,268
|
|
|||
Other foreign countries
|
9,652
|
|
|
8,884
|
|
|
8,552
|
|
|||
Total net sales
|
$
|
866,555
|
|
|
$
|
928,184
|
|
|
$
|
645,528
|
|
|
Year Ended October 31,
|
||||||
Long-lived assets, net
|
2017
|
|
2016
|
||||
United States
|
$
|
404,732
|
|
|
$
|
428,203
|
|
Germany
|
20,052
|
|
|
19,479
|
|
||
United Kingdom
|
148,319
|
|
|
121,416
|
|
||
Mexico
|
—
|
|
|
614
|
|
||
Total long-lived assets, net
|
$
|
573,103
|
|
|
$
|
569,712
|
|
|
Year Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
NA Engineered Components:
|
|
|
|
|
|
||||||
United States - fenestration
|
$
|
399,694
|
|
|
$
|
444,571
|
|
|
$
|
447,024
|
|
International - fenestration
|
34,279
|
|
|
38,439
|
|
|
33,991
|
|
|||
United States - non-fenestration
|
25,263
|
|
|
36,986
|
|
|
35,228
|
|
|||
International - non-fenestration
|
15,642
|
|
|
18,253
|
|
|
17,766
|
|
|||
|
$
|
474,878
|
|
|
$
|
538,249
|
|
|
$
|
534,009
|
|
EU Engineered Components:
|
|
|
|
|
|
||||||
United States - fenestration
|
$
|
303
|
|
|
$
|
412
|
|
|
$
|
44
|
|
International - fenestration
|
129,140
|
|
|
134,631
|
|
|
87,943
|
|
|||
International - non-fenestration
|
18,520
|
|
|
15,160
|
|
|
5,657
|
|
|||
|
$
|
147,963
|
|
|
$
|
150,203
|
|
|
$
|
93,644
|
|
NA Cabinet Components:
|
|
|
|
|
|
||||||
United States - fenestration
|
$
|
17,083
|
|
|
$
|
21,779
|
|
|
$
|
19,524
|
|
United States - non-fenestration
|
229,550
|
|
|
223,664
|
|
|
6,916
|
|
|||
International - non-fenestration
|
2,175
|
|
|
2,676
|
|
|
—
|
|
|||
|
$
|
248,808
|
|
|
$
|
248,119
|
|
|
$
|
26,440
|
|
Unallocated Corporate & Other
|
|
|
|
|
|
||||||
Eliminations
|
$
|
(5,094
|
)
|
|
$
|
(8,387
|
)
|
|
$
|
(8,565
|
)
|
|
$
|
(5,094
|
)
|
|
$
|
(8,387
|
)
|
|
$
|
(8,565
|
)
|
Net sales
|
$
|
866,555
|
|
|
$
|
928,184
|
|
|
$
|
645,528
|
|
|
Year Ended October 31, 2017
|
|
Year Ended October 31, 2015
|
||||||||||||||||||
|
Net Income from Continuing Operations
|
|
Weighted Average Shares
|
|
Per Share
|
|
Net Income from Continuing Operations
|
|
Weighted Average Shares
|
|
Per Share
|
||||||||||
Basic earnings per common share
|
$
|
18,683
|
|
|
34,230
|
|
|
$
|
0.55
|
|
|
$
|
15,614
|
|
|
33,993
|
|
|
$
|
0.46
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options
|
—
|
|
|
446
|
|
|
|
|
—
|
|
|
378
|
|
|
|
||||||
Restricted stock
|
—
|
|
|
138
|
|
|
|
|
—
|
|
|
131
|
|
|
|
||||||
Performance shares
|
$
|
—
|
|
|
23
|
|
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||||
Diluted earnings per common share
|
$
|
18,683
|
|
|
34,837
|
|
|
$
|
0.54
|
|
|
$
|
15,614
|
|
|
34,502
|
|
|
$
|
0.46
|
|
For the Quarter Ended
|
January 31, 2017
|
|
April 30, 2017
|
|
July 31, 2017
|
|
October 31, 2017
|
||||||||
Net sales
|
$
|
195,096
|
|
|
$
|
209,133
|
|
|
$
|
229,367
|
|
|
$
|
232,959
|
|
Cost of sales (excluding depreciation and amortization)
|
154,947
|
|
|
162,132
|
|
|
176,758
|
|
|
178,325
|
|
||||
Depreciation and amortization
|
15,406
|
|
|
14,380
|
|
|
13,915
|
|
|
13,794
|
|
||||
Operating (loss) income
|
(3,841
|
)
|
|
4,625
|
|
|
17,352
|
|
|
16,231
|
|
||||
Net (loss) income
|
$
|
(3,726
|
)
|
|
$
|
1,462
|
|
|
$
|
10,215
|
|
|
$
|
10,732
|
|
Basic (loss) earnings per share
|
(0.11
|
)
|
|
0.04
|
|
|
0.30
|
|
|
0.31
|
|
||||
Diluted (loss) earnings per share
|
(0.11
|
)
|
|
0.04
|
|
|
0.29
|
|
|
0.31
|
|
||||
Cash dividends paid per common share
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
For the Quarter Ended
|
January 31, 2016
|
|
April 30, 2016
|
|
July 31, 2016
|
|
October 31, 2016
|
||||||||
Net sales
|
$
|
201,468
|
|
|
$
|
229,460
|
|
|
$
|
248,085
|
|
|
$
|
249,171
|
|
Cost of sales (excluding depreciation and amortization)
|
159,348
|
|
|
176,497
|
|
|
186,631
|
|
|
188,168
|
|
||||
Depreciation and amortization
|
12,970
|
|
|
13,816
|
|
|
12,973
|
|
|
13,387
|
|
||||
Operating (loss) income
|
(2,138
|
)
|
|
10,556
|
|
|
19,930
|
|
|
8,005
|
|
||||
Net (loss) income
|
$
|
(7,249
|
)
|
|
$
|
3,935
|
|
|
$
|
(3,976
|
)
|
|
$
|
5,431
|
|
Basic (loss) earnings per share
|
(0.21
|
)
|
|
0.11
|
|
|
(0.12
|
)
|
|
0.16
|
|
||||
Diluted (loss) earnings per share
|
(0.21
|
)
|
|
0.11
|
|
|
(0.12
|
)
|
|
0.16
|
|
||||
Cash dividends paid per common share
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
|
|
QUANEX BUILDING PRODUCTS CORPORATION
|
|
|
|
|
Date:
|
December 12, 2017
|
|
/s/ Brent L. Korb
|
|
|
|
Brent L. Korb
|
|
|
|
Senior Vice President – Finance and Chief Financial Officer
(Principal Financial Officer)
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William C. Griffiths
|
|
Chairman of the Board,
|
|
December 12, 2017
|
William C. Griffiths
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ Susan F. Davis
|
|
Director
|
|
December 12, 2017
|
Susan F. Davis
|
|
|
|
|
|
|
|
|
|
/s/ LeRoy D. Nosbaum
|
|
Director
|
|
December 12, 2017
|
LeRoy D. Nosbaum
|
|
|
|
|
|
|
|
|
|
/s/ Joseph D. Rupp
|
|
Director
|
|
December 12, 2017
|
Joseph D. Rupp
|
|
|
|
|
|
|
|
|
|
/s/ Curtis M. Stevens
|
|
Director
|
|
December 12, 2017
|
Curtis M. Stevens
|
|
|
|
|
|
|
|
|
|
/s/ Robert R. Buck
|
|
Director
|
|
December 12, 2017
|
Robert R. Buck
|
|
|
|
|
|
|
|
|
|
/s/ Brent L. Korb
|
|
Senior Vice President—Finance and Chief Financial Officer
|
|
December 12, 2017
|
Brent L. Korb
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Dewayne Williams
|
|
Vice President and Controller
|
|
December 12, 2017
|
Dewayne Williams
|
|
(Principal Accounting Officer)
|
|
|
2.1
|
|
Distribution Agreement among Quanex Corporation, Quanex Building Products LLC and Quanex Building Products Corporation (incorporated by reference to Exhibit 10.1 to Quanex Corporation’s Current Report on Form 8-K (Reg. No. 001-05725) filed with the Commission on December 24, 2007).
|
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|
*101.INS
|
|
XBRL Instance Document
|
|
|
|
*101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
*101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
*101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
*101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
*101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
Date of Award:
|
[___________]
|
Target Number of Performance Restricted Stock Units:
|
[___________]
|
1.
|
GRANT OF PERFORMANCE RESTRICTED STOCK UNITS
.
The Compensation Committee (the “
Committee
”) of the Board of Directors of Quanex Building Products Corporation, a Delaware corporation (the “
Company
”), subject to the terms and provisions of the Quanex Building Products Corporation 2008 Omnibus Incentive Plan, as amended (the “
Plan
”), hereby awards to you, the above-named Grantee, effective as of the Date of Award set forth above, the number of PRSUs (the
“Target Number”
) set forth above in accordance with the formulas below, on the terms and conditions set forth in this PRSU Award Agreement (this “
Agreement
”).
|
2.
|
AWARD MODIFIERS
. The aggregate number of PRSUs to vest under this Agreement shall be equal to the Target Number multiplied by the award modifier set forth below (the “
Award Modifier
”).
|
|
Absolute TSR*
|
Award Modifier
|
Maximum Milestone
|
TSR equals or exceeds [__%]
|
150%
|
Target Milestone
|
TSR equals [__%]
|
100%
|
Threshold Milestone
|
TSR equals [__%]
|
50%
|
Below Threshold
|
TSR is less than [__%]
|
0% (award is forfeited and cancelled without payment)
|
3.
|
PAYMENT
.
Except as otherwise expressly provided herein, the total value owed to you based on the calculations set forth above will be paid to you one hundred percent (100%) in common stock of the Company, will be paid to you by the legal entity that is a member of the Company Group (as defined below) and that is classified as your employer (the “
Employer
”) as soon as administratively practicable following the date of the Committee’s certification that the Performance Goal has been satisfied, but no later than March 15 of the calendar year following the calendar year in which the Ending Date occurs (the “
Payment Date
”). “
Company Group
” shall mean the Company and all Affiliates of the Company.
|
4.
|
EXAMPLE CALCULATION
|
•
|
PRSU Grant of 1,000 shares.
|
•
|
Threshold, Target, and Maximum Award Modifiers of 50%, 100%, and 150% respectively.
|
•
|
Company achieves Absolute TSR performance of 20% (precisely the target milestone).
|
5.
|
SEPARATION FROM SERVICE/CHANGE IN CONTROL OF THE COMPANY
.
Notwithstanding anything to the contrary in this Agreement, the following provisions will apply in the event of your Separation from Service (within the meaning of Section 409A (your “
Separation from Service
”)) from the Company Group, or a Change in Control of the Company occurs, before the Ending Date. For purposes of this Agreement, a “
Change in Control
” of the Company shall have the meaning ascribed to such term in the Plan.
|
6.
|
TAX WITHHOLDING
. To the extent that the issuance of shares of Stock or any payment pursuant to this Agreement results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company or your employer has a withholding obligation, you shall deliver to the Company or the Employer, as applicable, at the time of such receipt, issuance, or payment, as the case may be, such amount of money as the Company or the Employer may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company or the Employer, as applicable, is authorized to withhold from any payment or issuance of shares under this Agreement, or from any cash or stock remuneration or other payment then or thereafter payable to you by the Company or the Employer, any tax required to be withheld by reason of such taxable income, wages or compensation including (without limitation) shares of Common Stock sufficient to satisfy the withholding obligation based on the last per share sales price of the Common Stock for the trading day immediately preceding the date that the withholding obligation arises, as reported in the New York Stock Exchange Composite Transactions.
|
7.
|
NONTRANSFERABILITY
.
The PRSUs and your rights under this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company Group shall not be bound thereby.
|
8.
|
CAPITAL ADJUSTMENTS AND REORGANIZATIONS
.
The existence of the PRSUs shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.
|
9.
|
PERFORMANCE RESTRICTED STOCK UNITS DO NOT AWARD CERTAIN RIGHTS OF A SHAREHOLDER
. You shall not have the voting rights or any of the other rights, powers or privileges of a holder of the stock of the Company with respect to the PRSUs that are awarded hereby. Only after shares of Stock are issued in exchange for your rights under this Agreement will you have all of the rights of a shareholder with respect to such shares.
|
10.
|
RIGHTS TO RECEIVE DIVIDEND PAYMENTS
.
Cash dividends, stock, and any other property (other than cash) distributed as a dividend or otherwise with respect to any PRSU shall be accumulated, and shall be subject to restrictions and risk of forfeiture to the same extent as otherwise set forth in this Agreement. The combined value of any such distributions shall be paid to you at the time such restrictions and risk of forfeiture lapse.
|
11.
|
EMPLOYMENT RELATIONSHIP
.
For purposes of the Agreement, you shall be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group. The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan, and the Committee’s determination shall be final and binding on all persons.
|
12.
|
NOT AN EMPLOYMENT AGREEMENT
. This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between you and the Company or any Affiliate or guarantee the right to remain employed by the Company or any Affiliate for any specified term.
|
13.
|
SECURITIES ACT LEGEND
.
If you are or become an officer or affiliate of the Company under the Securities Act of 1933, you consent to the placing on any certificate for the shares of Stock of an appropriate legend restricting resale or other transfer of the shares except in accordance with such Act and all applicable rules thereunder.
|
14.
|
LIMIT OF LIABILITY
. Under no circumstances will the Company or an Affiliate be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.
|
15.
|
REGISTRATION
. The shares of Stock that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration Statement on Form S-8.
|
16.
|
SALE OF SECURITIES
. The shares of Stock that may be issued under this Agreement may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws. You also agree that (a) the Company may refuse to cause the transfer of the shares to be registered on the stock register of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable federal or state securities law and (b) the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the shares.
|
17.
|
REIMBURSEMENT OF EXECUTIVE COMPENSATION IN RESTATEMENT SITUATIONS
: To the extent permitted by law, and as determined by the Board in its judgment, the Company may require reimbursement of a portion of any payment to you under this Agreement when (a) the award payment was predicated upon the achievement of certain financial results that were subsequently the subject of a material restatement; and (b) a lower payment would have been made to you based upon the restated financial results. In each such instance, the Company will, to the extent practicable, seek to recover the amount by which your payment for the relevant period exceeded the lower payment that would have been made based on the restated financial results. No reimbursement shall be required if such material restatement was caused by or resulted from any change in accounting policy or rules.
|
18.
|
AGREEMENT TO REPAYMENT
OF PERFORMANCE BASED INCENTIVE COMPENSATION WHEN PAYMENTS ARE REQUIRED UNDER FEDERAL LAW OR THE RULES OF AN EXCHANGE
: Grantee acknowledges that the Company is a publicly-traded entity subject to the laws and regulations of the United States Securities and Exchange Commission, as well as the requirements of the New York Stock Exchange. The Grantee further acknowledges that the Company’s approved form agreements for performance-based incentive compensation granted to Grantee contain certain “clawback” terms and provisions. Grantee agrees to the terms and conditions of any policy adopted by the Company to comply with, or any decision of the Company to adhere to, any requirement or policy of the New York Stock Exchange (or any other exchange on which the securities of the Company are listed) pursuant to Section 10D of the Securities Exchange Act of 1934 (the “
Policy
”) from this point forward for any grants made previously or in the future. Section 10D provides for the recovery of incentive-based compensation that has been erroneously granted, earned, vested or paid because of one or more errors that are
material in the financial statements of the Company. To the extent such Policy requires the repayment or recovery of incentive-based compensation granted to, or earned or received by Grantee, or in which the Grantee vested, whether granted, vested, earned or
paid pursuant to any past or future award agreements or any other plan of incentive-based compensation maintained in the past or adopted in the future by the Company, Grantee agrees to the forfeiture, recovery or repayment of such amounts to the extent required by such Policy.
|
19.
|
EMPLOYER LIABLE FOR PAYMENT
.
Except as the Committee may determine otherwise in connection with a Change in Control, the Employer is liable for the payment of any amounts that become due under this Agreement.
|
20.
|
SECTION 409A OF THE INTERNAL REVENUE CODE
. This Agreement and all payments made hereunder, are intended to meet the short-term deferral exception described under section 1.409A-1(b)(4) of the applicable Treasury regulations, or otherwise comply with, Section 409A, and this Agreement shall be interpreted so as to effect that intent. By accepting this award, you acknowledge and agree that (a) you are not relying upon any written or oral statement or oral statement or representation of the Company, its Affiliates, or any of their respective employees, directors, officers, attorneys or agents (collectively, the
“
Company Parties
”
) regarding the tax effects associated with execution of this Agreement and the payment made
pursuant to the Plan, and (b) in deciding to enter into this Agreement, you are relying on your own judgment and the judgment of the professionals of your choice with whom you have consulted. By accepting this award, you thereby release, acquit and forever discharge the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with the award and this Agreement.
|
21.
|
DELAYED PAYMENT IN CERTAIN CIRCUMSTANCES
. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IF YOU ARE A SPECIFIED EMPLOYEE (WITHIN THE MEANING OF SECTION 409A) AND THE COMPANY DETERMINES THAT A PAYMENT HEREUNDER IS NOT PERMITTED TO BE PAID ON THE DATE SPECIFIED WITHOUT THE IMPOSITION OF ADDITIONAL TAXES, INTEREST OR PENALTIES UNDER SECTION 409A, THEN NO PAYMENTS SHALL BE MADE TO YOU PURSUANT TO THIS AWARD DUE TO A SEPARATION FROM SERVICE FOR ANY REASON BEFORE THE EARLIER OF THE DATE THAT IS SIX MONTHS AND A DAY AFTER THE DATE ON WHICH YOU INCUR SUCH SEPARATION FROM SERVICE OR FIVE BUSINESS DAYS FOLLOWING THE DATE OF YOUR DEATH.
|
22.
|
PAYMENT TO RABBI TRUST IN CONNECTION WITH DELAYED PAYMENT
.
If the Company determines in its sole discretion that you are a Specified Employee as of any Payment Date and that
Section 409A
applies as set forth in this Agreement, then any such portion payable during the Six-Month Delay Period shall be transferred to a rabbi trust (which shall be a rabbi trust previously created by the Company that contains other amounts of deferred compensation payable by the Company or a rabbi trust created by the Company or its successor) as soon as administratively feasible following the occurrence of the event giving rise to your right to such payment, except to the extent such transfer would subject you to penalties under the funding restriction provisions of
Section 409A
, as amended by the Pension Protection Act of 2006, and such amounts (together with earnings thereon determined in accordance with the terms of the trust agreement) shall be transferred from the trust to you upon the earlier of (i) the expiration of the Six-Month Delay Period, or (ii) any other earlier date permitted under
Section 409A.
|
23.
|
TAX-BASED PROGRAM CRITERIA
.
The Plan is designed to conform to the requirements of Section 162(m) of the Internal Revenue Code, which limits the amount the Company can deduct for non-performance-based compensation. Performance-based compensation meeting the requirements of the Internal Revenue Code is not subject to this limit. The award granted hereby is intended to meet these requirements so that the Company can deduct this element of compensation.
|
24.
|
FRACTIONAL SHARES PAID IN CASH.
In the event any share of Stock due hereunder is a fractional share, the Company shall pay the value of such fractional share in cash.
|
25.
|
MISCELLANEOUS
. This Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any. In the event of a conflict between this Agreement and the Plan provisions, the Plan provisions will control. The term “
you
” and “
your
” refer to the Grantee named in this Agreement. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan. This Agreement shall be binding on all successors and assigns of the Company.
|
Date of Award:
|
[___________]
|
Target Number of Performance Restricted Stock Units:
|
[___________]
|
1.
|
GRANT OF PERFORMANCE RESTRICTED STOCK UNITS
.
The Compensation Committee (the “
Committee
”) of the Board of Directors of Quanex Building Products Corporation, a Delaware corporation (the “
Company
”), subject to the terms and provisions of the Quanex Building Products Corporation 2008 Omnibus Incentive Plan, as amended (the “
Plan
”), hereby awards to you, the above-named Grantee, effective as of the Date of Award set forth above, the number of PRSUs (the
“Target Number”
) set forth above in accordance with the formulas below, on the terms and conditions set forth in this PRSU Award Agreement (this “
Agreement
”).
|
2.
|
AWARD MODIFIERS
. The aggregate number of PRSUs to vest under this Agreement shall be equal to the Target Number multiplied by the award modifier set forth below (the “
Award Modifier
”).
|
|
Absolute TSR*
|
Award Modifier
|
Maximum Milestone
|
TSR equals or exceeds [__%]
|
150%
|
Target Milestone
|
TSR equals [__%]
|
100%
|
Threshold Milestone
|
TSR equals [__%]
|
50%
|
Below Threshold
|
TSR is less than [__%]
|
0% (award is forfeited and cancelled without payment)
|
3.
|
PAYMENT
.
Except as otherwise expressly provided herein, the total value owed to you based on the calculations set forth above will be paid to you one hundred percent (100%) in common stock of the Company, will be paid to you by the legal entity that is a member of the Company Group (as defined below) and that is classified as your employer (the “
Employer
”) as soon as administratively practicable following the date of the Committee’s certification that the Performance Goal has been satisfied, but no later than March 15 of the calendar year following the calendar year in which the Ending Date occurs (the “
Payment Date
”). “
Company Group
” shall mean the Company and all Affiliates of the Company.
|
4.
|
EXAMPLE CALCULATION
|
•
|
PRSU Grant of 1,000 shares.
|
•
|
Threshold, Target, and Maximum Award Modifiers of 50%, 100%, and 150% respectively.
|
•
|
Company achieves Absolute TSR performance of 20% (precisely the target milestone).
|
5.
|
SEPARATION FROM SERVICE/CHANGE IN CONTROL OF THE COMPANY
.
Notwithstanding anything to the contrary in this Agreement, the following provisions will apply in the event of your Separation from Service (within the meaning of Section 409A (your “
Separation from Service
”)) from the Company Group, or a Change in Control of the Company occurs, before the Ending Date. For purposes of this Agreement, a “
Change in Control
” of the Company shall have the meaning ascribed to such term in the Change in Control Agreement between you and the Company.
|
6.
|
TAX WITHHOLDING
. To the extent that the issuance of shares of Stock or any payment pursuant to this Agreement results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company or your employer has a withholding obligation, you shall deliver to the Company or the Employer, as applicable, at the time of such receipt, issuance, or payment, as the case may be, such amount of money as the Company or the Employer may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company or the Employer, as applicable, is authorized to withhold from any payment or issuance of shares under this Agreement, or from any cash or stock remuneration or other payment then or thereafter payable to you by the Company or the Employer, any tax required to be withheld by reason of such taxable income, wages or compensation including (without limitation) shares of Common Stock sufficient to satisfy the withholding obligation based on the last per share sales price of the Common Stock for the trading day immediately preceding the date that the withholding obligation arises, as reported in the New York Stock Exchange Composite Transactions.
|
7.
|
NONTRANSFERABILITY
.
The PRSUs and your rights under this Agreement may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company Group shall not be bound thereby.
|
8.
|
CAPITAL ADJUSTMENTS AND REORGANIZATIONS
.
The existence of the PRSUs shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.
|
9.
|
PERFORMANCE RESTRICTED STOCK UNITS DO NOT AWARD CERTAIN RIGHTS OF A SHAREHOLDER
. You shall not have the voting rights or any of the other rights, powers or privileges of a holder of the stock of the Company with respect to the PRSUs that are awarded hereby. Only after shares of Stock are issued in exchange for your rights under this Agreement will you have all of the rights of a shareholder with respect to such shares.
|
10.
|
RIGHTS TO RECEIVE DIVIDEND PAYMENTS
.
Cash dividends, stock, and any other property (other than cash) distributed as a dividend or otherwise with respect to any PRSU shall be accumulated, and shall be subject to restrictions and risk of forfeiture to the same extent as otherwise set forth in this Agreement. The combined value of any such distributions shall be paid to you at the time such restrictions and risk of forfeiture lapse.
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11.
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EMPLOYMENT RELATIONSHIP
.
For purposes of the Agreement, you shall be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group. The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan, and the Committee’s determination shall be final and binding on all persons.
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12.
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NOT AN EMPLOYMENT AGREEMENT
. This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between you and the Company or any Affiliate or guarantee the right to remain employed by the Company or any Affiliate for any specified term.
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13.
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SECURITIES ACT LEGEND
.
If you are or become an officer or affiliate of the Company under the Securities Act of 1933, you consent to the placing on any certificate for the shares of Stock of an appropriate legend restricting resale or other transfer of the shares except in accordance with such Act and all applicable rules thereunder.
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14.
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LIMIT OF LIABILITY
. Under no circumstances will the Company or an Affiliate be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.
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15.
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REGISTRATION
. The shares of Stock that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration Statement on Form S-8.
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16.
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SALE OF SECURITIES
. The shares of Stock that may be issued under this Agreement may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws. You also agree that (a) the Company may refuse to cause the transfer of the shares to be registered on the stock register of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable federal or state securities law and (b) the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the shares.
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17.
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REIMBURSEMENT OF EXECUTIVE COMPENSATION IN RESTATEMENT SITUATIONS
: To the extent permitted by law, and as determined by the Board in its judgment, the Company may require reimbursement of a portion of any payment to you under this Agreement when (a) the award payment was predicated upon the achievement of certain financial results that were subsequently the subject of a material restatement; and (b) a lower payment would have been made to you based upon the restated financial results. In each such instance, the Company will, to the extent practicable, seek to recover the amount by which your payment for the relevant period exceeded the lower payment that would have been made based on the restated financial results. No reimbursement shall be required if such material restatement was caused by or resulted from any change in accounting policy or rules.
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18.
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AGREEMENT TO REPAYMENT
OF PERFORMANCE BASED INCENTIVE COMPENSATION WHEN PAYMENTS ARE REQUIRED UNDER FEDERAL LAW OR THE RULES OF AN EXCHANGE
: Grantee acknowledges that the Company is a publicly-traded entity subject to the laws and regulations of the United States Securities and Exchange Commission, as well as the requirements of the New York Stock Exchange. The Grantee further acknowledges that the Company’s approved form agreements for performance-based incentive compensation granted to Grantee contain certain “clawback” terms and provisions. Grantee agrees to the terms and conditions of any policy adopted by the Company to comply with, or any decision of the Company to adhere to, any requirement or policy of the New York Stock Exchange (or any other exchange on which the securities of the Company are listed) pursuant to Section 10D of the Securities Exchange Act of 1934 (the “
Policy
”) from this point forward for any grants made previously or in the future. Section 10D provides for the recovery of incentive-based compensation that has been erroneously granted, earned, vested or paid because of one or more errors that are
material in the financial statements of the Company. To the extent such Policy requires the repayment or recovery of incentive-based compensation granted to, or earned or received by Grantee, or in which the Grantee vested, whether granted, vested, earned or
paid pursuant to any past or future award agreements or any other plan of incentive-based compensation maintained in the past or adopted in the future by the Company, Grantee agrees to the forfeiture, recovery or repayment of such amounts to the extent required by such Policy.
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19.
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EMPLOYER LIABLE FOR PAYMENT
.
Except as the Committee may determine otherwise in connection with a Change in Control, the Employer is liable for the payment of any amounts that become due under this Agreement.
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20.
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SECTION 409A OF THE INTERNAL REVENUE CODE
. This Agreement and all payments made hereunder, are intended to meet the short-term deferral exception described under section 1.409A-1(b)(4) of the applicable Treasury regulations, or otherwise comply with, Section 409A, and this Agreement shall be interpreted so as to effect that intent. By accepting this award, you acknowledge and agree that (a) you are not relying upon any written or oral statement or oral statement or representation of the Company, its Affiliates, or any of their respective employees, directors, officers, attorneys or agents (collectively, the
“
Company Parties
”
) regarding the tax effects associated with execution of this Agreement and the payment made
pursuant to the Plan, and (b) in deciding to enter into this Agreement, you are relying on your own judgment and the judgment of the professionals of your choice with whom you have consulted. By accepting this award, you thereby release, acquit and forever discharge the Company Parties from all actions, causes of actions, suits, debts, obligations, liabilities, claims, damages, losses, costs and expenses of any nature whatsoever, known or unknown, on account of, arising out of, or in any way related to the tax effects associated with the award and this Agreement.
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21.
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DELAYED PAYMENT IN CERTAIN CIRCUMSTANCES
. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IF YOU ARE A SPECIFIED EMPLOYEE (WITHIN THE MEANING OF SECTION 409A) AND THE COMPANY DETERMINES THAT A PAYMENT HEREUNDER IS NOT PERMITTED TO BE PAID ON THE DATE SPECIFIED WITHOUT THE IMPOSITION OF ADDITIONAL TAXES, INTEREST OR PENALTIES UNDER SECTION 409A, THEN NO PAYMENTS SHALL BE MADE TO YOU PURSUANT TO THIS AWARD DUE TO A SEPARATION FROM SERVICE FOR ANY REASON BEFORE THE EARLIER OF THE DATE THAT IS SIX MONTHS AND A DAY AFTER THE DATE ON WHICH YOU INCUR SUCH SEPARATION FROM SERVICE OR FIVE BUSINESS DAYS FOLLOWING THE DATE OF YOUR DEATH.
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22.
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PAYMENT TO RABBI TRUST IN CONNECTION WITH DELAYED PAYMENT
.
If the Company determines in its sole discretion that you are a Specified Employee as of any Payment Date and that
Section 409A
applies as set forth in this Agreement, then any such portion payable during the Six-Month Delay Period shall be transferred to a rabbi trust (which shall be a rabbi trust previously created by the Company that contains other amounts of deferred compensation payable by the Company or a rabbi trust created by the Company or its successor) as soon as administratively feasible following the occurrence of the event giving rise to your right to such payment, except to the extent such transfer would subject you to penalties under the funding restriction provisions of
Section 409A
, as amended by the Pension Protection Act of 2006, and such amounts (together with earnings thereon determined in accordance with the terms of the trust agreement) shall be transferred from the trust to you upon the earlier of (i) the expiration of the Six-Month Delay Period, or (ii) any other earlier date permitted under
Section 409A.
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23.
|
TAX-BASED PROGRAM CRITERIA
.
The Plan is designed to conform to the requirements of Section 162(m) of the Internal Revenue Code, which limits the amount the Company can deduct for non-performance-based compensation. Performance-based compensation meeting the requirements of the Internal Revenue Code is not subject to this limit. The award granted hereby is intended to meet these requirements so that the Company can deduct this element of compensation.
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24.
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FRACTIONAL SHARES PAID IN CASH.
In the event any share of Stock due hereunder is a fractional share, the Company shall pay the value of such fractional share in cash.
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25.
|
MISCELLANEOUS
. This Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any. In the event of a conflict between this Agreement and the Plan provisions, the Plan provisions will control. The term “
you
” and “
your
” refer to the Grantee named in this Agreement. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan. This Agreement shall be binding on all successors and assigns of the Company.
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SUBSIDIARIES OF QUANEX BUILDING PRODUCTS CORPORATION
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LOCATION OF INCORPORATION
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Quanex Homeshield, LLC
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Delaware
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Mikron Industries, Inc.
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Washington
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Mikron Washington, LLC
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Washington
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Quanex IG Systems, Inc.
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Ohio
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Edgetech Europe GmbH
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Germany
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Quanex Screens LLC
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Delaware
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Edgetech (UK) LTD.
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United Kingdom and Wales
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Flamstead Holdings Limited
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United Kingdom and Wales
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HL Plastics Ltd.
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United Kingdom and Wales
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Woodcraft Industries, Inc.
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Minnesota
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Brentwood Acquisition Corp.
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Minnesota
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Primewood, Inc.
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North Dakota
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1.
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I have reviewed this annual report on Form 10-K of Quanex Building Products Corporation (the Registrant);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting [as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)] for the Registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
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5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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/s/ WILLIAM C. GRIFFITHS
|
WILLIAM C. GRIFFITHS
|
Chairman of the Board, President and Chief Executive Officer
(Principal Executive Officer) |
1.
|
I have reviewed this annual report on Form 10-K of Quanex Building Products Corporation (the Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures [as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)] and internal control over financial reporting [as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)] for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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/
S
/ B
RENT
L. K
ORB
|
|
B
RENT
L. K
ORB
Senior Vice President – Finance and
Chief Financial Officer
(Principal Financial Officer)
|
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(a)
|
the Company’s Annual Report on Form 10-K for the fiscal year ended
October 31, 2017
as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
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(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/S/ WILLIAM C. GRIFFITHS
|
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/S/ BRENT L. KORB
|
WILLIAM C. GRIFFITHS
|
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BRENT L. KORB
|
Chairman of the Board, President and
Chief Executive Officer
|
|
Senior Vice President—Finance and
Chief Financial Officer
|