NX Quanex Corp

Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2022.

The Company reported the following selected financial results:

	Three Months Ended July 31,				Nine Months Ended July, 31
($ in millions, except per share data)	2022		2021		2022		2021
Net Sales	$324.0		$279.9		$914.0		$780.4
Gross Margin	$72.6		$60.0		$201.0		$175.7
Gross Margin %	22.4%		21.4%		22.0%		22.5%
Net Income	$25.9		$13.6		$63.7		$36.0
Diluted EPS	$0.78		$0.41		$1.91		$1.08
Adjusted Net Income	$26.2		$14.2		$64.0		$37.8
Adjusted Diluted EPS	$0.79		$0.42		$1.92		$1.13
Adjusted EBITDA	$44.2		$32.9		$113.8		$89.5
Adjusted EBITDA Margin %	13.6%		11.8%		12.5%		11.5%
Cash Provided by Operating Activities	$51.7		$18.5		$49.9		$47.4
Free Cash Flow	$46.0		$12.3		$30.4		$31.4

(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, “We are proud of the results we posted for the third quarter, especially considering the ongoing inflationary challenges and macro-related uncertainties. Demand for our products held up nicely for most of the third quarter and results reflected the benefit from our pass-through pricing strategy; however, we did start to experience some softness in demand in Europe towards the end of July.

“Free Cash Flow increased significantly during the third quarter of this year compared to the same period last year. The improvement in Free Cash Flow was driven by a meaningful increase in net income. We were able to repay $25 million of bank debt and repurchase $5 million of our common stock during the quarter. Overall, our balance sheet and liquidity remain strong. We will continue to focus on generating cash, maintaining a healthy balance sheet, opportunistically repurchasing our stock and evaluating growth opportunities.” (See Non-GAAP Terminology Definitions and Disclaimers section and the reconciliation of Free Cash Flow to cash provided by operating activities for additional information)

Third Quarter 2022 Results Summary

Quanex reported net sales of $324.0 million during the three months ended July 31, 2022, which represents growth of 15.8% compared to $279.9 million for the same period of 2021. The increase was mostly attributable to higher prices related to the pass through of raw material cost inflation. More specifically, the Company realized net sales growth of 25.0% in its North American Fenestration segment, 17.0% in its North American Cabinet Components segment and 8.7% in its European Fenestration segment, excluding the foreign exchange impact. (See Sales Analysis table for additional information)

The increase in earnings for the three months ended July 31, 2022 was largely due to increased pricing and surcharges related to the pass through of raw material cost inflation and higher volumes in the North American Fenestration segment.

Balance Sheet & Liquidity Update

As of July 31, 2022, Quanex had total debt of $38.0 million and its leverage ratio of Net Debt to LTM Adjusted EBITDA improved to 0.1x.   (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

The Company’s liquidity increased to $332.0 million as of July 31, 2022, consisting of $50.0 million in cash on hand plus availability under its new Amended and Restated Senior Secured Revolving Credit Facility due 2027, less letters of credit outstanding.

Share Repurchases

Quanex’s Board authorized a $75 million share repurchase program in December of 2021. 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 Company repurchased 216,000 shares of common stock for approximately $5.0 million at an average price of $23.29 per share during the three months ended July 31, 2022. As of July 31, 2022, approximately $68.4 million remained under the existing share repurchase authorization.

Outlook

Mr. Wilson commented, “We are reaffirming guidance for fiscal 2022, which is based on our strong results year-to-date coupled with ongoing conversations with our customers. Overall, demand for our products is still relatively healthy, but in addition to the softness in Europe we are starting to see signs of softness in North America, mainly in our cabinet components business. For the fourth quarter of this year, we now expect ~15% revenue growth in our North American Fenestration segment and low-single digit revenue growth in our North American Cabinet Components segment. Due to continued softness in Europe and the foreign exchange impact, we expect revenue to decline by ~15% in our European Fenestration segment in the fourth quarter. As a reminder, on a consolidated basis, we guided to net sales of $1.18 billion to $1.2 billion, which we expect will generate approximately $150 million to $155 million in Adjusted EBITDA* in fiscal 2022.

Longer-term, the underlying fundamentals remain positive for the residential housing industry in North America and in the markets we serve in Europe. Our balance sheet is strong and we are well-positioned to weather any storm, and we are also prepared to execute on our plan and create further value for shareholders over time.”

*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.

Conference Call and Webcast Information

The Company has also scheduled a conference call for Friday, September 2, 2022 at 11:00 a.m. ET (10:00 a.m. CT) to discuss the release. A link to the live audio webcast will be available on Quanex’s website at http://www.quanex.com in the Investors section under Presentations & Events.

Participants can pre-register for the conference call using the following link: https://register.vevent.com/register/BIe64ac12abde44f549078e7b4a916e837

Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, it is recommended that participants dial into the conference call ten minutes ahead of the scheduled start time. A replay will be available for a limited time on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.

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 (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.  Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less cash and cash equivalents. 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. Quanex uses the Free Cash Flow metric to measure operational and cash management performance and assist with financial decision-making.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of the Company’s residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company’s financial and cash management performance. Quanex believes that the presented non-GAAP measures provide a consistent basis for comparison between periods and will assist investors in understanding the Company’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. Quanex 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, 2021, 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
		Three Months Ended July 31,								Nine Months Ended July, 31
		2022				2021				2022				2021
Net sales		$	324,037			$	279,877			$	913,970			$	780,381
Cost of sales			251,446				219,866				712,931				604,723
Selling, general and administrative			28,822				27,766				87,774				88,299
Restructuring charges			-				-				-				39
Depreciation and amortization			9,734				10,683				30,554				32,543
Operating income			34,035				21,562				82,711				54,777
Interest expense			(724	)			(597	)			(1,849	)			(1,988	)
Other, net			398				188				905				645
Income before income taxes			33,709				21,153				81,767				53,434
Income tax expense			(7,801	)			(7,474	)			(18,098	)			(17,352	)
Net income		$	25,908			$	13,679			$	63,669			$	36,082
Earnings per common share, basic		$	0.79			$	0.41			$	1.92			$	1.09
Earnings per common share, diluted		$	0.78			$	0.41			$	1.91			$	1.08
Weighted average common shares outstanding:
Basic			32,999				33,359				33,093				33,194
Diluted			33,173				33,650				33,256				33,518
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, 2022				October 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$	50,030			$	40,061
Accounts receivable, net			109,467				108,309
Inventories, net			138,237				92,529
Prepaid and other current assets			8,651				8,148
Total current assets			306,385				249,047
Property, plant and equipment, net			175,404				178,630
Operating lease right-of-use assets			45,722				52,708
Goodwill			141,249				149,205
Intangible assets, net			69,670				82,410
Other assets			5,177				5,323
Total assets		$	743,607			$	717,323
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	84,527			$	86,765
Accrued liabilities			51,453				56,156
Income taxes payable			13,709				6,038
Current maturities of long-term debt			1,070				846
Current operating lease liabilities			7,972				8,196
Total current liabilities			158,731				158,001
Long-term debt			55,458				52,094
Noncurrent operating lease liabilities			38,768				45,367
Deferred pension and postretirement benefits			4,498				4,737
Deferred income taxes			21,086				21,965
Other liabilities			14,929				15,377
Total liabilities			293,470				297,541
Stockholders’ equity:
Common stock			373				373
Additional paid-in-capital			251,359				254,162
Retained earnings			315,471				259,718
Accumulated other comprehensive loss			(41,365	)			(21,770	)
Treasury stock at cost			(75,701	)			(72,701	)
Total stockholders’ equity			450,137				419,782
Total liabilities and stockholders' equity		$	743,607			$	717,323

QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
	Nine Months Ended July, 31
	2022				2021
Operating activities:
Net income	$	63,669			$	36,082
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		30,554				32,543
Stock-based compensation		1,707				1,470
Deferred income tax		505				5,429
Other, net		2,647				5,485
Changes in assets and liabilities:
Increase in accounts receivable		(5,306	)			(8,277	)
Increase in inventory		(48,280	)			(32,113	)
Increase in other current assets		(824	)			(2,768	)
Increase in accounts payable		2,765				1,600
(Decrease) increase in accrued liabilities		(4,721	)			12,521
Increase (decrease) in income taxes payable		7,522				(5,158	)
Decrease in deferred pension and postretirement benefits		(239	)			(158	)
Increase in other long-term liabilities		32				962
Other, net		(177	)			(183	)
Cash provided by operating activities		49,854				47,435
Investing activities:
Capital expenditures		(19,488	)			(16,006	)
Proceeds from disposition of capital assets		134				3,138
Cash used for investing activities		(19,354	)			(12,868	)
Financing activities:
Borrowings under credit facilities		70,500				-
Repayments of credit facility borrowings		(70,500	)			(45,000	)
Debt issuance costs		(1,210	)			-
Repayments of other long-term debt		(1,301	)			(502	)
Common stock dividends paid		(7,916	)			(8,017	)
Issuance of common stock		502				16,272
Payroll tax paid to settle shares forfeited upon vesting of stock		(1,412	)			(492	)
Purchase of treasury stock		(6,600	)			(5,741	)
Cash used for financing activities		(17,937	)			(43,480	)
Effect of exchange rate changes on cash and cash equivalents		(2,594	)			955
Increase (decrease) in cash and cash equivalents		9,969				(7,958	)
Cash and cash equivalents at beginning of period		40,061				51,621
Cash and cash equivalents at end of period	$	50,030			$	43,663

QUANEX BUILDING PRODUCTS CORPORATION
FREE CASH FLOW AND NET DEBT 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 (used for) operating activities less capital expenditures.
	Three Months Ended July 31,						Nine Months Ended July, 31
	2022			2021			2022			2021
Cash provided by operating activities	51,735			18,475			$49,854			$47,435
Capital expenditures	(5,703	)		(6,207	)		(19,488	)		(16,006	)
Free Cash Flow	$46,032			$12,268			$30,366			$31,429
The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash.
	As of July 31,
	2022			2021
Revolving credit facility	$38,000			$58,000
Finance lease obligations	20,105			15,951
Total debt(1)	58,105			73,951
Less: Cash and cash equivalents	50,030			43,663
Net Debt	$8,075			$30,288
(1) Excludes outstanding letters of credit.

QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands, except per share data)
(Unaudited)
		Three Months Ended								Three Months Ended								Nine Months Ended								Nine Months Ended
Reconciliation of Adjusted Net Income and Adjusted EPS		July 31, 2022								July 31, 2021								July 31, 2022								July 31, 2021
		NetIncome				DilutedEPS				NetIncome				DilutedEPS				NetIncome				DilutedEPS				NetIncome				DilutedEPS
Net income as reported		$	25,908			$	0.78			$	13,679			$	0.41			$	63,669			$	1.91			$	36,082			$	1.08
Net income reconciling items from below		257				$	0.01			512				$	0.01			291				$	0.01			1,686				$	0.05
Adjusted net income and adjusted EPS		$	26,165			$	0.79			$	14,191			$	0.42			$	63,960			$	1.92			$	37,768			$	1.13
Reconciliation of Adjusted EBITDA		Three Months EndedJuly 31, 2022								Three Months EndedJuly 31, 2021								Nine Months EndedJuly 31, 2022								Nine Months EndedJuly 31, 2021
		Reconciliation								Reconciliation								Reconciliation								Reconciliation
Net income as reported		$	25,908							$	13,679							$	63,669							$	36,082
Income tax expense		7,801								7,474								18,098								17,352
Other, net		(398		)						(188		)						(905		)						(645		)
Interest expense		724								597								1,849								1,988
Depreciation and amortization		9,734								10,683								30,554								32,543
EBITDA		43,769								32,245								113,265								87,320
EBITDA reconciling items from below		419								682								550								2,160
Adjusted EBITDA		$	44,188							$	32,927							$	113,815							$	89,480
Reconciling Items		Three Months EndedJuly 31, 2022								Three Months EndedJuly 31, 2021								Nine Months EndedJuly 31, 2022								Nine Months EndedJuly 31, 2021
		Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items
Net sales		$	324,037			$ -				$	279,877			$ -				$	913,970			$ -				$	780,381			$ -
Cost of sales		251,446				-				219,866				(307		)	(1)	712,931				-				604,723				(307		)	(1)
Selling, general and administrative		28,822				(419		)	(2)	27,766				(375		)	(2)	87,774				(550		)	(2)	88,299				(1,814		)	(2)
Restructuring charges		-				-				-				-				-				-				39				(39		)	(3)
EBITDA		43,769				419				32,245				682				113,265				550				87,320				2,160
Depreciation and amortization		9,734				-				10,683				-				30,554				-				32,543				-
Operating income		34,035				419				21,562				682				82,711				550				54,777				2,160
Interest expense		(724		)		-				(597		)		-				(1,849		)		-				(1,988		)		-
Other, net		398				(82		)	(4)	188				79			(4)	905				(164		)	(4)	645				161			(4)
Income before income taxes		33,709				337				21,153				761				81,767				386				53,434				2,321
Income tax expense		(7,801		)		(80		)	(5)	(7,474		)		(249		)	(5)	(18,098		)		(95		)	(5)	(17,352		)		(635		)	(5)
Net income		$	25,908			$	257			$	13,679			$	512			$	63,669			$	291			$	36,082			$	1,686
Diluted earnings per share		$	0.78							$	0.41							$	1.91							$	1.08
(1) Loss on damage to a plant caused by flooding.
(2) Transaction and advisory fees, loss on the sale of a plant.
(3) Restructuring charges related to the closure of manufacturing plant facilities.
(4) Foreign currency transaction (gains) losses.
(5) Impact on a with and without basis.

QUANEX BUILDING PRODUCTS CORPORATION
SELECTED SEGMENT DATA
(In thousands)
(Unaudited)
This table provides gross margin, operating (loss) income, 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, 2022
Net sales		$	184,744			$	67,613			$	72,480			$	(800	)		$	324,037
Cost of sales			142,970				47,212				61,543				(279	)			251,446
Gross Margin			41,774				20,401				10,937				(521	)			72,591
Gross Margin %			22.6	%			30.2	%			15.1	%							22.4	%
Selling, general and administrative			14,644				8,256				5,335				587				28,822
Depreciation and amortization			4,044				2,327				3,273				90				9,734
Operating income (loss)			23,086				9,818				2,329				(1,198	)			34,035
Depreciation and amortization			4,044				2,327				3,273				90				9,734
EBITDA			27,130				12,145				5,602				(1,108	)			43,769
Transaction and advisory fees			-				-				-				419				419
Adjusted EBITDA		$	27,130			$	12,145			$	5,602			$	(689	)		$	44,188
Adjusted EBITDA Margin %			14.7	%			18.0	%			7.7	%							13.6	%
Three months ended July 31, 2021
Net sales		$	147,818			$	71,114			$	61,936			$	(991	)		$	279,877
Cost of sales			116,517				49,479				54,334				(464	)			219,866
Gross Margin			31,301				21,635				7,602				(527	)			60,011
Gross Margin %			21.2	%			30.4	%			12.3	%							21.4	%
Selling, general and administrative			13,428				7,525				5,130				1,683				27,766
Depreciation and amortization			4,571				2,646				3,390				76				10,683
Operating income (loss)			13,302				11,464				(918	)			(2,286	)			21,562
Depreciation and amortization			4,571				2,646				3,390				76				10,683
EBITDA			17,873				14,110				2,472				(2,210	)			32,245
Loss on the damage of a plant			-				307				-				-				307
Loss on sale of plant			375				-				-				-				375
Adjusted EBITDA		$	18,248			$	14,417			$	2,472			$	(2,210	)		$	32,927
Adjusted EBITDA Margin %			12.3	%			20.3	%			4.0	%							11.8	%
Nine months ended July 31, 2022
Net sales		$	509,283			$	199,954			$	207,711			$	(2,978	)		$	913,970
Cost of sales			396,505				138,147				179,791				(1,512	)			712,931
Gross Margin			112,778				61,807				27,920				(1,466	)			201,039
Gross Margin %			22.1	%			30.9	%			13.4	%							22.0	%
Selling, general and administrative			43,099				24,160				15,823				4,692				87,774
Depreciation and amortization			12,221				7,418				10,653				262				30,554
Operating income (loss)			57,458				30,229				1,444				(6,420	)			82,711
Depreciation and amortization			12,221				7,418				10,653				262				30,554
EBITDA			69,679				37,647				12,097				(6,158	)			113,265
Transaction and advisory fees			-				-				-				550				550
Adjusted EBITDA		$	69,679			$	37,647			$	12,097			$	(5,608	)		$	113,815
Adjusted EBITDA Margin %			13.7	%			18.8	%			5.8	%							12.5	%
Nine months ended July 31, 2021
Net sales		$	422,077			$	181,862			$	179,492			$	(3,050	)		$	780,381
Cost of sales			328,278				122,631				155,370				(1,556	)			604,723
Gross Margin			93,799				59,231				24,122				(1,494	)			175,658
Gross Margin %			22.2	%			32.6	%			13.4	%							22.5	%
Selling, general and administrative			38,944				21,559				15,372				12,424				88,299
Restructuring charges			39				-				-				-				39
Depreciation and amortization			14,528				7,771				9,965				279				32,543
Operating income (loss)			40,288				29,901				(1,215	)			(14,197	)			54,777
Depreciation and amortization			14,528				7,771				9,965				279				32,543
EBITDA			54,816				37,672				8,750				(13,918	)			87,320
Loss on the damage of a plant			-				307				-				-				307
Loss on sale of plant			375				-				-				1,439				1,814
Restructuring charges			39				-				-				-				39
Adjusted EBITDA		$	55,230			$	37,979			$	8,750			$	(12,479	)		$	89,480
Adjusted EBITDA Margin %			13.1	%			20.9	%			4.9	%							11.5	%

QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)
		Three Months Ended July 31,								Nine Months Ended July, 31
		2022				2021				2022				2021
NA Fenestration:
	United States - fenestration	$	162,215			$	129,291			$	447,425			$	369,809
	International - fenestration		10,722				9,581				30,952				25,756
	United States - non-fenestration		8,324				5,853				22,117				17,543
	International - non-fenestration		3,483				3,093				8,789				8,969
		$	184,744			$	147,818			$	509,283			$	422,077
EU Fenestration:(1)
	International - fenestration	$	49,041			$	54,883			$	148,525			$	147,072
	International - non-fenestration		18,572				16,231				51,429				34,790
		$	67,613			$	71,114			$	199,954			$	181,862
NA Cabinet Components:
	United States - fenestration	$	4,857			$	3,240			$	13,288			$	9,711
	United States - non-fenestration		66,758				57,418				191,908				168,308
	International - non-fenestration		865				1,278				2,515				1,473
		$	72,480			$	61,936			$	207,711			$	179,492
Unallocated Corporate & Other:
	Eliminations	$	(800	)		$	(991	)		$	(2,978	)		$	(3,050	)
		$	(800	)		$	(991	)		$	(2,978	)		$	(3,050	)
Net Sales		$	324,037			$	279,877			$	913,970			$	780,381
(1) Reflects reduction of $8.9 million and $11.7 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2022, respectively.