Balance Sheet & Liquidity Remain Strong
Repaid $78 Million of Bank Debt
Over 50% Increase in Cash Provided by Operations
Margin Expansion Realized in EU Fenestration Segment
Management Remains Optimistic on Recovery

HOUSTON, Sept. 03, 2020 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2020.

The Company reported the following selected financial results:

  Three Months Ended July 31, Nine Months Ended July 31,
   2020   2019   2020   2019 
Net Sales $212.1  $238.5  $596.2  $653.5 
Gross Margin $49.7  $57.1  $126.6  $142.2 
Gross Margin %  23.4%   23.9%   21.2%   21.8% 
Net Income (Loss) $10.8  $11.8  $16.3   ($15.8) 
Diluted EPS $0.33  $0.36  $0.50   ($0.48) 
         
Adjusted Net Income $11.1  $13.7  $18.7  $17.8 
Adjusted Diluted EPS $0.34  $0.41  $0.57  $0.54 
Adjusted EBITDA $27.7  $32.8  $65.2  $68.2 
Adjusted EBITDA Margin %  13.1%   13.7%   10.9%   10.4% 
         
Cash Provided by Operating Activities$45.1  $29.9  $47.6  $30.0 
Free Cash Flow $40.7  $25.9  $26.9  $13.1 
         
(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table Selected Segment Data table and Free Cash Flow Reconciliation table for additional information)
         

George Wilson, President and Chief Executive Officer, stated, “Despite the impact from the COVID-19 pandemic, third quarter results proved better than we expected and exceeded the guidance we provided on our last earnings call.  Volumes increased steadily throughout the quarter, especially in Europe, and we remain optimistic on the recovery.  We continue to focus on managing working capital and generating cash.  As a result, we realized an increase of over 50% in cash provided by operating activities as compared to the same period of 2019.  We were also able to repay $78 million of bank debt during the quarter, $50 million of which was drawn as a precautionary measure in response to the pandemic, and our leverage ratio of Net Debt to LTM Adjusted EBITDA improved to a level below where we ended fiscal 2019.  We have worked tirelessly over the past several years to make sure we have a flexible capital structure and a strong balance sheet, which has left our Company well positioned to navigate the challenges presented by the COVID-19 pandemic.”

Consistent with most companies, we withdrew guidance for fiscal 2020 in March due to the uncertainty surrounding the COVID-19 pandemic.  Our results have been negatively impacted by the pandemic; however, we continue to be positively surprised by the pace at which demand for our products has returned. As such, we are now comfortable providing full year 2020 guidance of $832 million to $837 million in net sales and $97 million to $102 million in Adjusted EBITDA*.  (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

*When Quanex provides expectations for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures is generally not available without unreasonable effort.  Certain items required for such a reconciliation are outside of the Company’s control and/or cannot be reasonably predicted or estimated, such as the provision for income taxes.

Third Quarter 2020 Results Summary  

The decrease in net sales during the third quarter of 2020 was largely attributable to softer demand related to the COVID-19 pandemic.  The Company’s two manufacturing facilities in the UK were shut down in compliance with government orders on March 25, 2020, and manufacturing operations at those plants did not restart until mid-to-late May.  However, volume across all segments increased significantly in June and net sales in July exceeded prior year on a consolidated basis. (See Sales Analysis table for additional information)

The decrease in reported earnings was primarily due to reduced operating leverage as a result of softer volumes related to the pandemic.    

Balance Sheet & Liquidity Update

As of July 31, 2020, the Company’s leverage ratio of Net Debt to LTM Adjusted EBITDA improved to 1.1x.  Quanex expects to exit fiscal 2020 with a leverage ratio of Net Debt to LTM Adjusted EBITDA at or below 1.0x.   (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

The Company’s liquidity increased to $223.2 million as of July 31, 2020, consisting of $41.1 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2023, less letters of credit outstanding.

Share Repurchases

Quanex’s Board of Directors authorized a $60 million share repurchase program in September of 2018.  Repurchases under this program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors.  The program does not have an expiration date or a limit on the number of shares that may be repurchased.  The Company did not repurchase any shares of common stock during the three months ended July 31, 2020.  As of July 31, 2020, approximately $11.7 million remained under the existing share repurchase authorization.  

Recent Events

Quanex’s Board of Directors declared a quarterly cash dividend of $0.08 per share on the Company’s common stock, payable September 30, 2020, to shareholders of record on September 16, 2020.

Conference Call and Webcast Information

The Company has scheduled a conference call for Friday, September 4, 2020, at 11:00 a.m. ET (10:00 a.m. CT).  To participate in the conference call dial (877) 388-2139 for domestic callers and (541) 797-2983 for international callers, in both cases using the conference passcode 6194308, and ask for the Quanex call a few minutes prior to the start time.  A link to the live audio webcast will also be available on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.  A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through September 11, 2020.  To access the replay dial (855) 859-2056 for domestic callers and (404) 537-3406 for international callers, in both cases referencing conference passcode 6194308. 

About Quanex

Quanex Building Products Corporation is an industry-leading manufacturer of components sold to Original Equipment Manufacturers (OEMs) in the building products industry.  Quanex designs and produces energy-efficient fenestration products in addition to kitchen and bath cabinet components.  For more information contact Scott Zuehlke, Senior Vice President, Chief Financial Officer & Treasurer, at 713-877-5327 or scott.zuehlke@quanex.com.

Non-GAAP Terminology Definitions and Disclaimers

Adjusted Net Income (Loss) (defined as net income further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges, asset impairment charges, other net adjustments related to foreign currency transaction gain/loss and effective tax rates reflecting impacts of adjustments on a with and without basis) and Adjusted EPS are non-GAAP financial measures that Quanex believes provide a consistent basis for comparison between periods and more accurately reflects operational performance, as they are not influenced by certain income or expense items not affecting ongoing operations. EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) and Adjusted EBITDA (defined as EBITDA further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges and asset impairment charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making.  The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating Quanex’s leverage.  In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company’s credit agreement.  Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of Quanex’s residual cash flow available for discretionary expenditures.  The Company believes that the presented non-GAAP measures provide a consistent basis for comparison between periods, and will assist investors in understanding Quanex’s financial performance when comparing results to other investment opportunities.  The presented non-GAAP measures may not be the same as those used by other companies.  The Company does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP. 

Forward Looking Statements

Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the following: impacts from public health issues (including pandemics, such as the recent COVID-19 pandemic) on the economy and the demand for Quanex’s products, the Company’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex’s industry, and the Company’s future growth, including any guidance discussed in this press release.  The statements and guidance set forth in this release are based on current expectations.  Actual results or events may differ materially from this release.  For a complete discussion of factors that may affect Quanex’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019, and the Company’s Quarterly Reports on Form 10-Q under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”.  Any forward-looking statements in this press release are made as of the date hereof, and Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.


QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)

  Three Months Ended July 31, Nine Months Ended July 31,
   2020   2019   2020   2019 
         
Net sales $212,096  $238,461  $596,168  $653,472 
Cost of sales  162,427   181,357   469,586   511,292 
Selling, general and administrative  21,973   25,718   62,818   77,466 
Restructuring charges  73   94   477   281 
Depreciation and amortization  11,060   12,182   35,851   37,158 
Asset impairment charges  -   -   -   29,978 
Operating income (loss)  16,563   19,110   27,436   (2,703)
Interest expense  (1,165)  (2,570)  (4,310)  (7,614)
Other, net  (220)  259   116   461 
Income (loss) before income taxes  15,178   16,799   23,242   (9,856)
Income tax expense  (4,345)  (4,958)  (6,898)  (5,926)
Net income (loss) $10,833  $11,841  $16,344  $(15,782)
         
Earnings (loss) per common share, basic $0.33  $0.36  $0.50  $(0.48)
Earnings (loss) per common share, diluted $0.33  $0.36  $0.50  $(0.48)
         
Weighted average common shares outstanding:        
Basic  32,610   32,899   32,716   32,984 
Diluted  32,739   33,162   32,845   32,984 
         
Cash dividends per share $0.08  $0.08  $0.24  $0.24 
         

QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 July 31, 2020 October 31, 2019
ASSETS   
Current assets:   
Cash and cash equivalents$41,073  $30,868 
Accounts receivable, net 84,479   82,946 
Inventories, net 63,939   67,159 
Prepaid and other current assets 7,930   9,353 
Total current assets 197,421   190,326 
Property, plant and equipment, net 186,830   193,600 
Operating lease right-of-use assets 49,644   - 
Goodwill 146,932   145,563 
Intangible assets, net 96,957   107,297 
Other assets 9,007   8,324 
Total assets$686,791  $645,110 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$58,676  $63,604 
Accrued liabilities 33,916   39,221 
Income taxes payable 6,350   6,183 
Current maturities of long-term debt 690   746 
Current operating lease liabilities 7,307   - 
Total current liabilities 106,939   109,754 
Long-term debt 152,062   156,414 
Noncurrent operating lease liabilities 42,740   - 
Deferred pension and postretirement benefits 11,375   13,322 
Deferred income taxes 20,507   19,363 
Other liabilities 13,230   16,070 
Total liabilities 346,853   314,923 
Stockholders’ equity:   
Common stock 373   374 
Additional paid-in-capital 253,144   254,673 
Retained earnings 193,989   185,703 
Accumulated other comprehensive loss (28,819)  (33,817)
Treasury stock at cost (78,749)  (76,746)
Total stockholders’ equity 339,938   330,187 
Total liabilities and stockholders' equity$686,791  $645,110 
    

QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)

 Nine Months Ended July 31,
  2020   2019 
Operating activities:   
Net income (loss)$16,344  $(15,782)
Adjustments to reconcile net income (loss) to cash provided by operating activities:   
Depreciation and amortization 35,851   37,158 
Stock-based compensation 513   1,424 
Deferred income tax 438   1,930 
Asset impairment charge -   29,978 
Other, net 762   1,724 
Changes in assets and liabilities:   
(Increase) decrease in accounts receivable (1,852)  323 
Decrease (increase) in inventory 3,553   (14,747)
Decrease (increase) in other current assets 1,218   (1,022)
(Decrease) increase in accounts payable (1,878)  1,562 
Decrease in accrued liabilities (7,611)  (15,366)
Increase in income taxes payable 107   396 
Increase in deferred pension and postretirement benefits 573   2,351 
Decrease in other long-term liabilities (181)  (143)
Other, net (276)  250 
Cash provided by operating activities 47,561   30,036 
Investing activities:   
Capital expenditures (20,673)  (16,984)
Proceeds from disposition of capital assets 131   315 
Cash used for investing activities (20,542)  (16,669)
Financing activities:   
Borrowings under credit facilities 114,500   66,500 
Repayments of credit facility borrowings (119,000)  (84,000)
Repayments of other long-term debt (791)  (1,102)
Common stock dividends paid (7,910)  (7,990)
Issuance of common stock 2,954   2,710 
Payroll tax paid to settle shares forfeited upon vesting of stock (454)  (330)
Purchase of treasury stock (6,693)  (6,336)
Cash used for financing activities (17,394)  (30,548)
Effect of exchange rate changes on cash and cash equivalents 580   (1,171)
Increase (decrease) in cash and cash equivalents 10,205   (18,352)
Cash and cash equivalents at beginning of period 30,868   29,003 
Cash and cash equivalents at end of period$41,073  $10,651 
    

QUANEX BUILDING PRODUCTS CORPORATION
FREE CASH FLOW RECONCILIATION
(In thousands)
(Unaudited)

The following table reconciles the Company's calculation of Free Cash Flow, a non-GAAP measure, to its most directly comparable GAAP measure. The Company defines Free Cash Flow as cash provided by operating activities less capital expenditures.

  Three Months Ended July 31, Nine Months Ended July 31,
   2020   2019   2020   2019 
Cash provided by operating activities $45,089  $29,893  $47,561  $30,036 
Capital expenditures  (4,360)  (3,962)  (20,673)  (16,984)
Free Cash Flow $40,729  $25,931  $26,888  $13,052 
                 

QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands, except per share data)
(Unaudited)

 Reconciliation of Adjusted Net Income and Adjusted EPS Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
 July 31, 2020  July 31, 2019  July 31, 2020  July 31, 2019 
  Net Income Diluted EPS  Net Income Diluted EPS  Net Income Diluted EPS  Net (Loss) Income Diluted EPS 
Net income (loss) as reported $10,833  $0.33   $11,841  $0.36   $16,344  $0.50   $(15,782) $(0.48) 
Reconciling items from below  280   0.01    1,809   0.05    2,387   0.07    33,595   1.02  
Adjusted net income and adjusted EPS $11,113  $0.34   $13,650  $0.41   $18,731  $0.57   $17,813  $0.54  
                     
Reconciliation of Adjusted EBITDA Three Months Ended
July 31, 2020
  Three Months Ended
July 31, 2019
  Nine Months Ended
July 31, 2020
  Nine Months Ended
July 31, 2019
 
  Reconciliation    Reconciliation    Reconciliation    Reconciliation   
Net income (loss) as reported $10,833     $11,841     $16,344     $(15,782)   
Income tax expense  4,345      4,958      6,898      5,926    
Other, net  220      (259)     (116)     (461)   
Interest expense  1,165      2,570      4,310      7,614    
Depreciation and amortization  11,060      12,182      35,851      37,158    
EBITDA  27,623      31,292      63,287      34,455    
Reconciling items from below  73      1,495      1,875      33,777    
Adjusted EBITDA $27,696     $32,787     $65,162     $68,232    
                     
Reconciling Items Three Months Ended
July 31, 2020
  Three Months Ended
July 31, 2019
  Nine Months Ended
July 31, 2020
  Nine Months Ended
July 31, 2019
 
  Income Statement Reconciling Items  Income Statement Reconciling Items  Income Statement Reconciling Items  Income Statement Reconciling Items 
Net sales $212,096  $-   $238,461  $-   $596,168  $-   $653,472  $-  
Cost of sales  162,427   -    181,357   -    469,586   -    511,292   -  
Selling, general and administrative  21,973   -    25,718   (1,401)(1)  62,818   (1,398)(1)  77,466   (3,518)(1)
Restructuring charges  73   (73)(2)  94   (94)(2)  477   (477)(2)  281   (281)(2)
Asset impairment charges  -   -    -   -    -   -    29,978   (29,978)(3)
EBITDA  27,623   73    31,292   1,495    63,287   1,875    34,455   33,777  
Depreciation and amortization  11,060   -    12,182   -    35,851   (968)(4)  37,158   -  
Operating income (loss)  16,563   73    19,110   1,495    27,436   2,843    (2,703)  33,777  
Interest expense  (1,165)  -    (2,570)  -    (4,310)  -    (7,614)  -  
Other, net  (220)  458 (5)  259   (112)(5)  116   390 (5)  461   (67)(5)
Income (loss) before income taxes  15,178   531    16,799   1,383    23,242   3,233    (9,856)  33,710  
Income tax expense  (4,345)  (251)(6)  (4,958)  426 (6)  (6,898)  (846)(6)  (5,926)  (115)(6)
Net income (loss) $10,833  $280   $11,841  $1,809   $16,344  $2,387   $(15,782) $33,595  
                     
Diluted earnings (loss) per share $0.33     $0.36     $0.50     $(0.48)   
                     
                     
(1) Transaction and advisory fees, $1.3 million related to executive severance charges in the nine months ended 2020, $1.2 million of executive severance charges in the three and nine months ended 2019, and $1.2 million of severance charges related to a reorganization in the nine months ended 2019. 
(2) Restructuring charges relate to the closure of manufacturing plant facilities.                    
(3) Asset impairment charges relate to goodwill impairment in the North American Cabinet Components segment.                
(4) Accelerated depreciation related to the closure of a North American Cabinet Components plant. 
(5) Foreign currency transaction losses (gains).                    
(6) Impact on a with and without basis. 
                     

QUANEX BUILDING PRODUCTS CORPORATION
SELECTED SEGMENT DATA
(In thousands)
(Unaudited)

This table provides gross margin, operating income (loss), EBITDA, and Adjusted EBITDA by reportable segment. Non-operating expense and income tax expense are not allocated to the reportable segments.
  NA Fenestration EU Fenestration NA Cabinet
Components
 Unallocated
Corp & Other
 Total
Three months ended July 31, 2020          
Net sales $122,386  $38,265  $51,925  $(480) $212,096 
Cost of sales  92,639   25,845   44,218   (275)  162,427 
Gross Margin  29,747   12,420   7,707   (205)  49,669 
Gross Margin %  24.3%  32.5%  14.8%    23.4%
Selling, general and administrative  11,922   4,748   4,634   669   21,973 
Restructuring charges  71   -   2   -   73 
Depreciation and amortization  5,371   2,307   3,264   118   11,060 
Operating income (loss)  12,383   5,365   (193)  (992)  16,563 
Depreciation and amortization  5,371   2,307   3,264   118   11,060 
EBITDA  17,754   7,672   3,071   (874)  27,623 
Restructuring charges  71   -   2   -   73 
Adjusted EBITDA $17,825  $7,672  $3,073  $(874) $27,696 
Adjusted EBITDA Margin %  14.6%  20.0%  5.9%    13.1%
           
Three months ended July 31, 2019          
Net sales $136,259  $44,326  $58,689  $(813) $238,461 
Cost of sales  101,693   30,708   49,389   (433)  181,357 
Gross Margin  34,566   13,618   9,300   (380)  57,104 
Gross Margin %  25.4%  30.7%  15.8%    23.9%
Selling, general and administrative  11,950   6,038   4,484   3,246   25,718 
Restructuring charges  94   -   -   -   94 
Depreciation and amortization  6,578   2,213   3,258   133   12,182 
Operating income (loss)  15,944   5,367   1,558   (3,759)  19,110 
Depreciation and amortization  6,578   2,213   3,258   133   12,182 
EBITDA  22,522   7,580   4,816   (3,626)  31,292 
Transaction and advisory fees  -   -   -   250   250 
Severance charges  -   -   -   1,151   1,151 
Restructuring charges  94   -   -   -   94 
Adjusted EBITDA $22,616  $7,580  $4,816  $(2,225) $32,787 
Adjusted EBITDA Margin %  16.6%  17.1%  8.2%    13.7%
           
Nine months ended July 31, 2020          
Net sales $341,432  $104,230  $152,634  $(2,128) $596,168 
Cost of sales  266,489   72,055   132,259   (1,217)  469,586 
Gross Margin  74,943   32,175   20,375   (911)  126,582 
Gross Margin %  21.9%  30.9%  13.3%    21.2%
Selling, general and administrative  34,962   15,990   13,468   (1,602)  62,818 
Restructuring charges  228   -   249   -   477 
Depreciation and amortization  18,311   7,045   10,139   356   35,851 
Operating income (loss)  21,442   9,140   (3,481)  335   27,436 
Depreciation and amortization  18,311   7,045   10,139   356   35,851 
EBITDA  39,753   16,185   6,658   691   63,287 
Transaction and advisory fees  -   -   -   55   55 
Executive severance charges  -   -   -   1,343   1,343 
Restructuring charges  228   -   249   -   477 
Adjusted EBITDA $39,981  $16,185  $6,907  $2,089  $65,162 
Adjusted EBITDA Margin %  11.7%  15.5%  4.5%    10.9%
           
Nine months ended July 31, 2019          
Net sales $360,654  $121,203  $175,377  $(3,762) $653,472 
Cost of sales  278,877   84,139   150,944   (2,668)  511,292 
Gross Margin  81,777   37,064   24,433   (1,094)  142,180 
Gross Margin %  22.7%  30.6%  13.9%    21.8%
Selling, general and administrative  37,240   17,444   13,914   8,868   77,466 
Restructuring charges  281   -   -   -   281 
Depreciation and amortization  20,208   6,669   9,902   379   37,158 
Asset impairment charges  -   -   29,978   -   29,978 
Operating income (loss)  24,048   12,951   (29,361)  (10,341)  (2,703)
Depreciation and amortization  20,208   6,669   9,902   379   37,158 
EBITDA  44,256   19,620   (19,459)  (9,962)  34,455 
Asset impairment charges  -   -   29,978   -   29,978 
Transaction and advisory fees  -   -   -   1,217   1,217 
Severance related to reorganization  -   -   -   2,301   2,301 
Restructuring charges  281   -   -   -   281 
Adjusted EBITDA $44,537  $19,620  $10,519  $(6,444) $68,232 
Adjusted EBITDA Margin %  12.3%  16.2%  6.0%    10.4%
           

QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)

   Three Months Ended  Nine Months Ended
  July 31, 2020 July 31, 2019 July 31, 2020 July 31, 2019
         
NA Fenestration:       
 United States - fenestration$109,455  $119,481  $302,094  $312,509 
 International - fenestration 6,696   7,172   19,284   23,474 
 United States - non-fenestration 4,845   3,982   13,779   12,290 
 International - non-fenestration 1,390   5,624   6,275   12,381 
  $122,386  $136,259  $341,432  $360,654 
EU Fenestration (1):       
 International - fenestration$31,904  $36,342  $87,732  $102,038 
 International - non-fenestration 6,361   7,984   16,498   19,165 
  $38,265  $44,326  $104,230  $121,203 
NA Cabinet Components:       
 United States - fenestration$2,666  $3,561  $8,461  $9,909 
 United States - non-fenestration 48,849   54,512   142,838   163,694 
 International - non-fenestration 410   616   1,335   1,774 
  $51,925  $58,689  $152,634  $175,377 
Unallocated Corporate & Other:       
 Eliminations$(480) $(813) $(2,128) $(3,762)
  $(480) $(813) $(2,128) $(3,762)
         
Net Sales$212,096  $238,461  $596,168  $653,472 
         
(1) Reflects reduction of $0.4 million and $1.6 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2020, respectively.

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