Nordson (NDSN) 10-Q2022 Q1 Quarterly report

Unless otherwise noted, all references to years relate to our fiscal year ending October 31.

However, for certain contracts related to the sale of customer-specific products within our Advanced Technology Solutions segment, revenue is recognized for these contracts over time as we satisfy performance obligations because of the continuous transfer of control to the customer. The continuous transfer of control to the customer occurs as we enhance assets that are customer controlled and we are contractually entitled to payment for work performed to date plus a reasonable margin.  

As control transfers over time for these products or services, revenue is recognized based on progress toward completion of the performance obligations. The selection method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We have elected to use the input method – costs incurred for these contracts because it best depicts the transfer of products or services to the customer based on incurring costs on the contract. Under this method, revenues are recorded proportionally as costs are incurred. Contract assets recognized are recorded in Prepaid expenses and other current assets and contract liabilities are recorded in Accrued liabilities in our Condensed Consolidated Balance Sheets and were not material at January 31, 2022 and October 31, 2021. Revenue recognized over time represented approximately 9% and 11% of our overall consolidated revenues at January 31, 2022 and 2021, respectively.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services.  Taxes, including sales and value add, that we collect concurrently with revenue-producing activities are excluded from revenue. As a practical expedient, we may exclude the assessment of whether goods or services are performance obligations, if they are immaterial in the context of the contract, and combine these with other performance obligations. While payment terms and conditions vary by contract type, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs as a significant portion of these costs are incurred prior to transfer of control to the customer. We have also elected to apply the practical expedient to expense sales commissions as they are incurred as the amortization period resulting from capitalizing the

costs is one year or less. These costs are recorded within Selling and administrative expenses in our Condensed Consolidated Statements of Income.

We disclose disaggregated revenues by operating segment and geography in accordance with the revenue standard and on the same basis used internally by the chief operating decision maker for evaluating performance of operating segments and for allocating resources. Refer to our Operating segments note for details.

Business acquisitions have been accounted for using the acquisition method, with the acquired assets and liabilities recorded at estimated fair value on the dates of acquisition. The cost in excess of the net assets of the business acquired is included in goodwill. Operating results since the respective dates of acquisitions are included in the Consolidated Statements of Income.

On November 1, 2021, we acquired 100% of NDC Technologies (NDC), a leading global provider of precision measurement solutions for in-line manufacturing process control. NDC's technology portfolio includes in-line measurement sensors, gauges and analyzers using near-infrared, laser, X-ray, optical and nucleonic technologies, as well as proprietary algorithms and software. We acquired NDC for an aggregate purchase price of $171,613, net of cash of approximately $7,533 and other working capital adjustments of $2,763, utilizing cash on hand. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $129,856 and identifiable intangible assets of $31,130 were recorded. The identifiable intangible assets consist primarily of $10,800 of tradenames (amortized over thirteen years), $10,000 of technology (amortized over seven years), $9,500 of customer relationships (amortized over four years) and $830 of non-compete agreements (amortized over three years). Goodwill associated with this acquisition of $73,300 is tax deductible. This acquisition is being reported in our Industrial Precision Solutions segment and the results of NDC are not material to our Consolidated Financial Statements. As of January 31, 2022, the purchase price allocation remains preliminary as we complete our assessments of intangible assets and income taxes.

Amortization expense for the three months ended January 31, 2022 and 2021 was $13,085 and $13,080, respectively. See Acquisitions Note for details regarding intangibles recorded due to the acquisition of NDC.

The components of net periodic pension cost other than service cost are included in Other – net in our Condensed Consolidated Statements of Income.

The components of other postretirement benefit costs for the three months ended January 31, 2022 and 2021 were:

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. The effective tax rate for the three months ended January 31, 2022 and 2021 was 20.8% and 20.7%, respectively.

Due to our share-based payment transactions, our income tax provision included a discrete tax benefit of $1,115 and $799 for the three months ended January 31, 2022 and 2021, respectively.

During the 2021 Annual Meeting of Shareholders, our shareholders approved the Nordson Corporation 2021 Stock Incentive and Award Plan (the “2021 Plan”) as the successor to the Amended and Restated 2012 Stock Incentive and Award Plan (the "2012 Plan"). The 2021 Plan provides for the granting of stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, cash awards and other stock or performance-based incentives. A maximum of 900 common shares were authorized for grant under the 2021 Plan plus the number of shares that remained available to be granted under the 2012 Plan. As of January 31, 2022, a total of 2,108 common shares were available to be granted under the 2021 Plan.

Nonqualified or incentive stock options may be granted to our employees and directors. Generally, options granted to employees may be exercised beginning one year from the date of grant at a rate not exceeding 25% per year and expire 10 years from the date of grant. Vesting accelerates upon a qualified termination in connection with a change in control. In the event of termination of employment due to early retirement or normal retirement at age 65, options granted within 12 months prior to termination are forfeited, and vesting continues post retirement for all other unvested options granted. In the event of disability or death, all unvested stock options granted within 12 months prior to termination fully vest. Termination for any other reason results in forfeiture of unvested options and vested options in certain circumstances. The amortized cost of options is accelerated if the retirement eligibility date occurs before the normal vesting date. Option exercises are satisfied through the issuance of treasury shares on a first-in, first-out basis. We recognized compensation expense related to stock options of $1,772 and $2,236 for the three months ended January 31, 2022 and 2021, respectively.

As of January 31, 2022, there was $12,692 of total unrecognized compensation cost related to unvested stock options. That cost is expected to be amortized over a weighted average period of approximately 1.2 years.

The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

The weighted-average expected volatility used to value the 2022 and 2021 options was 30.6% and 31.0%, respectively.

Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options. The risk-free interest rate was selected based upon yields of U.S. Treasury issues with a term equal to the expected life of the option being valued.

The weighted average grant date fair value of stock options granted during the three months ended January 31, 2022 and 2021 was $79.03 and $56.05, respectively.

The total intrinsic value of options exercised during the three months ended January 31, 2022 and 2021 was $6,961 and $5,435, respectively.

Cash received from the exercise of stock options for the three months ended January 31, 2022 and 2021 was $5,721 and $7,438, respectively.

For employee recipients, in the event of termination of employment due to early retirement with the consent of the Company, restricted shares and units granted within 12 months prior to termination are forfeited, and other restricted shares and units vest on a pro-rata basis, subject to the consent of the Compensation Committee. In the event of termination of employment due to normal retirement at age 65, restricted shares and units granted within 12 months prior to termination are forfeited, and, for other restricted shares and units, the restriction period applicable to restricted shares will lapse and the shares will vest and be transferable and all unvested units will become vested in full, subject to the consent of the Compensation Committee. In the event of a recipient's disability or death, all restricted shares and units granted within 12 months prior to termination fully vest. Termination for any other reason prior to the lapse of any restrictions or vesting of units results in forfeiture of the shares or units.

For non-employee directors, all restrictions lapse in the event of disability or death of the non-employee director. Termination of service as a director for any other reason within one year of date of grant results in a pro-rata vesting of shares or units.

As shares or units are issued, deferred stock-based compensation equivalent to the fair value on the date of grant is expensed over the vesting period.  

As of January 31, 2022, there was $1,101 of unrecognized compensation cost related to restricted shares. The cost is expected to be amortized over a weighted average period of 0.6 years. The amount charged to expense related to restricted shares during the three months ended January 31, 2022 and 2021 was $314 and $964, respectively, which included common share dividends of $5 and $18, respectively.

As of January 31, 2022, there was $16,216 of remaining expense to be recognized related to outstanding restricted share units, which is expected to be recognized over a weighted average period of 1.1 years. The amount charged to expense related to restricted share units during each of the three months ended January 31, 2022 and 2021 was $2,273 and $2,092, respectively.

Executive officers and selected other key employees are eligible to receive common share-based incentive awards. Payouts, in the form of unrestricted common shares, vary based on the degree to which corporate financial performance exceeds predetermined threshold, target and maximum performance goals over three-year performance periods. No payout will occur unless threshold performance is achieved.

The amount of compensation expense is based upon current performance projections and the percentage of the requisite service that has been rendered. The calculations are based upon the grant date fair value which is principally driven by the stock price on the date of grant or a Monte Carlo valuation for awards with market conditions. The per share values were $260.60 and $273.50 for 2022 and $202.50 for 2021. The amount charged to expense related to performance awards was $3,944 and $4,755 for the three months ended January 31, 2022 and 2021, respectively. As of January 31, 2022, there was $18,453 of unrecognized compensation cost related to performance share incentive awards.

Our executive officers and other highly compensated employees may elect to defer up to 100% of their base pay and cash incentive compensation, and for executive officers, up to 90% of their share-based performance incentive payout each year. Additional share units are credited for quarterly dividends paid on our common shares. Expense related to dividends paid under this plan for the three months ended January 31, 2022 and 2021 was $18 and $29, respectively.

Non-employee directors may defer all or part of their cash and equity-based compensation until retirement. Cash compensation may be deferred as cash or as share equivalent units. Deferred cash amounts are recorded as liabilities, and share equivalent units are recorded as equity. Additional share equivalent units are earned when common share dividends are declared.

The amount charged to expense related to director deferred compensation for the three months ended January 31, 2022 and 2021 was $76 and $62.

We offer warranties to our customers depending on the specific product and terms of the customer purchase agreement.  A typical warranty program requires that we repair or replace defective products within a specified time period (generally one year) from the date of delivery or first use. We record an estimate for future warranty-related costs based on actual historical return rates.  Based on analysis of return rates and other factors, the adequacy of our warranty provisions are adjusted as necessary. The liability for warranty costs is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.  

Following is a reconciliation of the product warranty liability for the three months ended January 31, 2022 and 2021:

We conduct business across 2 primary operating segments:  Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS). The composition of segments and measure of segment profitability is consistent with that used by our chief operating decision maker. The primary measure used by the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing performance is operating profit, which equals sales less cost of sales and certain operating expenses. Items below the operating profit line of the Condensed Consolidated Statements of Income (interest and investment income, interest expense and other income/expense) are excluded from the measure of segment profitability reviewed by our chief operating decision maker and are not presented by operating segment. The accounting policies of the segments are generally the same as those described in Note - Significant Accounting Policies.

The following table presents information about our segments:

The carrying amounts and fair values of financial instruments, other than cash and cash equivalents, receivables, and accounts payable, are shown in the table below. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term nature of these instruments.

We used the following methods and assumptions in estimating the fair value of financial instruments:

We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. We regularly use foreign currency forward contracts to reduce our risks related to most of these transactions. These contracts usually have maturities of 90 days or less and generally require us to exchange foreign currencies for U.S. dollars at maturity, at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in “Other – net” on the Condensed Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position.

For the three months ended January 31, 2022, we recognized a net loss of $3,598 on foreign currency forward contracts and a realized net gain of $3,962 from the change in fair value of balance sheet positions. For the three months ended January 31, 2021, we recognized a net gain of $9,342 on foreign currency forward contracts and a net loss of $12,102 from the change in fair value of balance sheet positions. The fair values of our foreign currency forward contract assets and liabilities are included in Receivable-net and Accrued liabilities, respectively, in our Consolidated Balance Sheets.

The following table summarizes, by currency, the foreign currency forward contracts outstanding at January 31, 2022 and 2021:

We are exposed to credit-related losses in the event of nonperformance by counterparties to financial instruments. These financial instruments include cash deposits and foreign currency forward contracts. We periodically monitor the credit ratings of these counterparties in order to minimize our exposure. Our customers represent a wide variety of industries and geographic regions. For the three months ended January 31, 2022 and 2021, there were no significant concentrations of credit risk.

We were in compliance with all covenants at January 31, 2022 and the amount we could borrow would not have been limited by any debt covenants.

We have voluntarily agreed with the City of New Richmond, Wisconsin and other potentially responsible parties to share costs associated with the remediation of the City of New Richmond municipal landfill (the Site) and the construction of a potable water delivery system serving the impacted area down gradient of the Site. At January 31, 2022 and October 31, 2021, our accrual for the ongoing operation, maintenance and monitoring obligation at the Site was $313 and $319, respectively. The liability for environmental remediation represents management’s best estimate of the probable and reasonably estimable undiscounted costs related to known remediation obligations. The accuracy of our estimate of environmental liability is affected by several uncertainties such as additional requirements that may be identified in connection with remedial activities, the complexity and evolution of environmental laws and regulations, and the identification of presently unknown remediation requirements. Consequently, our liability could be greater than our current estimate. However, we do not expect that the costs associated with remediation will have a material adverse effect on our financial condition or results of operations.

In December 2019, a novel strain of coronavirus (COVID-19) emerged and has since spread to other countries, including the United States. In March 2020, the World Health Organization declared COVID-19 as a pandemic (the COVID-19 pandemic). The COVID-19 pandemic, including multiple variants, has resulted in governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business interruptions and other measures.

Throughout the COVID-19 pandemic, we have supported, and continue to support, multiple “critical infrastructure” sectors by manufacturing materials and products needed for medical supply chains, packaging, transportation, energy, communications, and other critical infrastructure industries. We have benefited from our geographical and product diversification as the end markets we serve have remained resilient in response to the COVID-19 pandemic, and we continue to invest in the businesses, people, and strategies necessary to achieve our long-term priorities as we focus on driving profitable growth. We have continued to operate during the COVID-19 pandemic in all our production facilities, having taken the recommended public health measures to ensure worker and workplace safety. As a result, there have been unfavorable impacts on our manufacturing efficiencies. Additionally, we are taking steps to offset cost increases from COVID-19 pandemic-related supply chain disruptions.

We continue to actively monitor the rapidly evolving circumstances and impact of the COVID-19 pandemic, which has negatively disrupted, and may continue to negatively disrupt, our business and results of operations in the future. The full extent of the COVID-19 pandemic on our operations and the markets we serve remains highly uncertain and will depend largely on future developments related to the COVID-19 pandemic, including infection rates increasing or returning in various geographic areas, variations of COVID-19, the ultimate duration of the COVID-19 pandemic, actions by government authorities to contain the outbreak or treat its impact, such as reimposing previously lifted measures or putting in place additional restrictions, and the widespread distribution and acceptance of an effective vaccine, among other things. These developments are constantly evolving and cannot be accurately predicted.

A comprehensive discussion of the Company’s critical accounting policies and management estimates and significant accounting policies followed in the preparation of the financial statements is included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, 2021 (the 2021 Form 10-K). There have been no significant changes in critical accounting policies, management estimates or accounting policies followed since the year ended October 31, 2021.

Three months ended January 31, 2022

Worldwide sales for the three months ended January 31, 2022 were $609,166, an increase of 15.7% from sales of $526,566 for the comparable period of 2021. The increase consisted of a 16.0% increase in organic sales volume and a favorable net 1.6% increase due to acquisitions and divestitures, which was partially offset by an unfavorable effect from currency translation of 1.9%. The organic sales increase was driven by strong demand across most end markets.

Sales outside the United States accounted for 68.6% of our sales in the three months ended January 31, 2022 compared to 64.8% in the comparable period of 2021. On a geographic basis, sales in the United States were $191,377, an increase of 3.3% compared to 2021, consisting of a 2.8% increase in organic sales volume and a net 0.5% increase from acquisitions and divestitures. In the Asia Pacific region, sales were $187,721, an increase of 31.4% from 2021, consisting of an organic sales volume increase of 29.4% and a net 2.1% increase due to acquisitions and divestitures, partially offset by unfavorable currency effects of 0.1%. In Europe, sales were $155,985, an increase of 15.4% from 2021, consisting of an organic sales volume increase of 16.6% and a net 3.9% increase due to acquisitions and divestitures, offset by unfavorable currency effects of 5.1%. In the Americas region, sales were $48,525, an increase of 34.3% from 2021, consisting of an organic sales volume increase of 36.6%, partially offset by unfavorable currency effects of 1.4%, and a net decrease of 0.9% due to acquisitions and divestitures. In Japan, sales were $25,558, a decrease of 5.7% from 2021, consisting of an organic sales volume increase of 3.5% offset by unfavorable currency effects of 9.0% and a net 0.2% decrease due to acquisitions and divestitures.

Cost of sales for the three months ended January 31, 2022 were $269,032, up from $236,606 in the comparable period of 2021. Gross profit, expressed as a percentage of sales, increased to 55.8% from 55.1% in the comparable period of 2021. The 0.7 percentage point increase in gross margin was primarily driven by the divestiture of the screws and barrel product line, which contributed 1.1 percentage points, partially offset by inventory step-up amortization related to acquisition of NDC Technologies (NDC) in 2022.

Selling and administrative expenses for the three months ended January 31, 2022 were $184,274, up from $180,935 in the comparable period of 2021. The 1.8% increase was primarily driven by the first year effect of acquisitions, partially offset by favorable currency translation effects.

Interest expense for the three months ended January 31, 2022 was $5,650, compared to $6,932 in the comparable period of 2021. The decrease was due to lower average debt levels compared to the prior year period. Other income was $1,292 compared to other expense of $4,661 in the comparable period of 2021. Included in 2022 other income were pension income of $281 and $364 in foreign currency gains. Included in 2021 other expense were pension costs of $1,476 and $2,760 of foreign currency losses.

Net income for the three months ended January 31, 2022 was $120,409, or $2.05 per diluted share, compared to $77,582, or $1.32 per diluted share, in the same period of 2021. This represents a 55.2% increase in net income, and a 55.3% increase in diluted earnings per share.

Sales of the Industrial Precision Solutions segment were $323,933 in the three months ended January 31, 2022, an increase of 12.3% from sales in the comparable period of 2021 of $288,416. The increase was the result of an organic sales volume increase of 12.0% and a net acquisition/divestiture impact of 3.2%, partially offset by unfavorable currency effects that decreased sales by 2.9%. The organic sales volume increase was driven by continued demand in consumer non-durable and industrial end markets, particularly in Asia.

Income taxes

We record our interim provision for income taxes based on our estimated annual effective tax rate, as well as certain items discrete to the current period. Significant judgment is involved regarding the application of global income tax laws and regulations and when projecting the jurisdictional mix of income. We have considered several factors in determining the probability of realizing deferred income tax assets which include forecasted operating earnings, available tax planning strategies and the time period over which the temporary differences will reverse. We review our tax positions on a regular basis and adjust the balances as new information becomes available. The effective tax rate for the three months ended January 31, 2022 was 20.8% and 20.7%, respectively.

Foreign Currency Effects

In the aggregate, average exchange rates for 2022 used to translate international sales and operating results into U.S. dollars were generally unfavorable compared with average exchange rates existing during 2021. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which we operate. However, if transactions for the three months ended January 31, 2022 were translated at exchange rates in effect during the same period of 2021, we estimated that sales would have been approximately $9,800 higher while costs of sales and selling and administrative expenses would have been approximately $6,000 higher.

During the three months ended January 31, 2022, cash and cash equivalents decreased $129,433 as cash was used to fund the NDC acquisition, partially offset by cash generated from operations in the quarter. Cash provided by operations during this period was $118,087 compared to $143,289 for the three months ended January 31, 2021. Changes in operating assets and liabilities decreased cash by $29,217 in the three months ended January 31, 2022 compared to increasing cash by $16,152 in the comparable period of 2021, primarily related to investments in inventory.

Cash used in financing activities was $61,902 for the three months ended January 31, 2022, compared to $122,278 used in the comparable period of 2021. The three months ended January 31, 2021 included a repayment of long-term debt of $100,000. In the three months ended January 31, 2022, cash of $29,724 was used for dividend payments and cash of $35,002 was used for the purchase of treasury shares, compared to $22,672 and $5,310, respectively, in the comparable period of 2021.

The following is a summary of significant changes in balance sheet captions from October 31, 2021 to January 31, 2022. Inventories-net increased by $39,185 to meet expected demand and exiting backlog and as a result of the NDC acquisition. Goodwill increased by $129,856 due to the NDC acquisition. Accrued liabilities decreased by $42,747 due primarily to incentive compensation payments made in the quarter ending January 31, 2022.

We believe the combination of present capital resources, cash from operations and unused financing sources are more than adequate to meet cash requirements for 2022. There are no significant restrictions limiting the transfer of funds from international subsidiaries to the parent company. We were in compliance with all debt covenants at January 31, 2022. Refer to our Long-term debt footnote in the notes to our condensed consolidated financial statements for additional details regarding our debt outstanding.

Backlog entering the second quarter of fiscal year 2022 is over $900 million. The Company continues to see extended shipment request dates in conjunction with large orders from our customers in electronics, industrials, and medical end markets. Based on anticipated sales timing, supply chain constraints and labor availability, we expect fiscal 2022 second quarter sales growth to be in the range of 6% to 10% compared to fiscal 2021 second quarter, full-year revenue growth of 7% to 10% compared to fiscal year 2021 and earnings per share growth for the second quarter and fiscal year of 2022 compared to the same fiscal periods of 2021.

This Form 10-Q, particularly “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things,

income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in this annual report that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” use of the future tense and similar words or phrases. These statements reflect management’s current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions; financial and market conditions; currency exchange rates and devaluations; possible acquisitions including the Company’s ability to complete and successfully integrate acquisitions, including the integration of NDC; the Company’s ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current COVID-19 pandemic.

In light of these risks and uncertainties, actual events and results may vary significantly from those included in or contemplated or implied by such statements. Readers are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Factors that could cause actual results to differ materially from the expected results are discussed in Part I, Item 1A, Risk Factors in our 2021 Form 10-K.

Information regarding our financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed under Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our 2021 Form 10-K. The information disclosed has not changed materially in the interim period since then.

Our management with the participation of the principal executive officer (President and Chief Executive Officer) and principal financial officer (Executive Vice President, Chief Financial Officer) has reviewed and evaluated our disclosure controls and procedures (as defined in the Securities Exchange Act Rule 13a-15(e)) as of January 31, 2022. Based on that evaluation, our management, including the principal executive and financial officers, has concluded that our disclosure controls and procedures were effective as of January 31, 2022 in ensuring that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the three months ended January 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The following table summarizes common stock repurchased by the Company during the three months ended January 31, 2022: