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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:BasisOfAccounting-->
<!-- xbrl,ns -->
<!-- xbrl,nx -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt"><b></b>
<b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 1 — BASIS OF PRESENTATION </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The accompanying unaudited consolidated financial statements for NCI Building Systems, Inc. and its
subsidiaries (the “Company,” “we,” “us,” and “our”) have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, the unaudited consolidated financial statements included herein
contain all adjustments necessary to fairly present our financial position, results of operations
and cash flows for the periods indicated. Such adjustments, other than nonrecurring adjustments
that have been separately disclosed, are of a normal, recurring nature. Operating results for the
fiscal three and nine month periods ended July 31, 2011 are not necessarily indicative of the
results that may be expected for the fiscal year ending October 30, 2011. Our sales and earnings
are subject to both seasonal and cyclical trends and are influenced by general economic conditions,
interest rates, the price of steel relative to other building materials, the level of
nonresidential construction activity, roof repair and retrofit demand and the availability and cost
of financing for construction projects.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We use a four-four-five week calendar each quarter with our year end on the Sunday closest to
October 31. The year end for fiscal 2011 is October 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain reclassifications have been made to prior period amounts in our Consolidated Balance Sheets
and Consolidated Statements of Operations to conform to the current presentation. These
reclassifications include the reclassification of shares of our common stock, par value $0.01 (the
“Common Stock”), to redeemable common stock. See Note 11 — Redeemable Common Stock. The net effect
of these reclassifications was not material to our consolidated financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For further information, refer to the consolidated financial statements and footnotes thereto
included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2010 filed with
the Securities and Exchange Commission (the “SEC”) on December 22, 2010.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - us-gaap:DescriptionOfNewAccountingPronouncementsNotYetAdopted-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) (“ASU 2011-04”). The
amendments to this update provide a uniform framework for applying the principles of fair value
measurement and include (i) amendments that clarify the Board’s intent about the application of
existing fair value measurement and disclosure requirements and (ii) amendments that change a
particular principle or requirement for measuring fair value or for disclosing information about
fair value measurements. These amendments do not require additional fair value measurements. We
will adopt ASU 2011-04 in our second fiscal quarter ended April 29, 2012. We do not believe the
adoption of ASU 2011-04 will have a material impact on our consolidated financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220) (“ASU 2011-05”) which
amends its guidance on the presentation of comprehensive income to increase the prominence of items
reported in other comprehensive income. The new guidance requires that all components of
comprehensive income in stockholders’ equity be presented either in a single continuous statement
of comprehensive income or in two separate but consecutive statements. This amendment is to be
applied retrospectively. We will adopt ASU 2011-05 in our first quarter of fiscal 2013 and its
adoption will not have any impact on our consolidated financial
statements.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 3 - ncs:PlantRestructuringAndAssetImpairmentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 3 — PLANT RESTRUCTURING AND ASSET IMPAIRMENTS </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As a result of the market downturn which began in fiscal 2008, we implemented a phased process to
resize and realign our manufacturing operations. The purpose of these activities was to close some
of our least efficient facilities and to retool certain of these facilities to allow us to better
utilize our assets and expand into new markets or better provide products to our customers, such as
insulated panel systems.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As a result of actions taken in our restructuring, certain facilities in our engineered building
systems and metal components segments are being actively marketed for sale and have been classified
as held for sale in the Consolidated Balance Sheets. During the first
quarter of fiscal 2010, we recorded an additional $1.0 million impairment for one of our facilities
in the engineered building systems segment related to facilities classified as held for sale as a
result of deteriorating market conditions. In determining the impairment, the fair value of assets
was determined based on prices of similar assets in similar condition, adjusted for their remaining
useful life. We plan to sell these facilities within the next 12 months. In addition, during the
three and nine month periods ended August 1, 2010, we incurred $0.6 million and $1.9 million,
respectively, in restructuring costs primarily related to idle facility costs. We did not incur
significant similar costs related to our restructuring in the three or nine month periods ended
July 31, 2011 and do not expect to incur significant similar
costs resulting from this restructuring
plan in the future. However, we did record a $0.6 million recovery in the three and nine month
periods ended July 31, 2011 as a result of a legal settlement for a closed facility.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 4 - us-gaap:CashAndCashEquivalentsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 4 — RESTRICTED CASH </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On May 21, 2009, we entered into a cash collateral agreement with our agent bank to obtain letters
of credit secured by cash collateral. The restricted cash is invested in a cash bank account
securing our agent bank. As of July 31, 2011 and October 31, 2010, we had restricted cash in the
amount of $2.8 million as collateral related to our $2.7 million of letters of credit. Restricted
cash is classified as a current asset as the underlying letters of credit expire by October 2011.
The letters of credit have either automatically renewed or will be renewed upon expiration.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 5 — INVENTORIES </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The components of inventory are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">86,422</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">56,834</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process and finished goods
</div></td>
<td> </td>
<td> </td>
<td align="right">29,902</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,552</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">116,324</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">81,386</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 6 — SHARE-BASED COMPENSATION </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Our 2003 Long-Term Stock Incentive Plan (“Incentive Plan”) is an equity-based compensation plan
that allows us to grant a variety of types of awards, including stock options, restricted stock,
restricted stock units, stock appreciation rights, performance share awards, phantom stock awards
and cash awards. As of July 31, 2011 and August 1, 2010, and for all periods presented, our
share-based awards under this plan have consisted of restricted stock grants and stock option
grants, none of which can be settled through cash payments. Both our stock options and restricted
stock awards are subject only to vesting requirements based on continued employment at the end of a
specified time period and typically vest over four years or earlier upon death, disability or a
change of control. However, our annual restricted stock awards also vest upon retirement and, only
in the case of certain special one-time restricted stock awards, a portion vest on termination
without cause or for good reason, as defined by the agreements governing such awards.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of each option award is estimated as of the date of grant or the remeasurement date
using a Black-Scholes-Merton option pricing formula. Expected volatility is based on normalized
historical volatility of our stock over a preceding period commensurate with the expected term of
the option and adjusted to exclude the increased volatility associated with the refinancing the
Company experienced in fiscal 2009 because this volatility is not relevant to the expected future
volatility of the stock. The risk-free rate for the expected term of the option is based on the
U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield was not
considered in the option pricing formula since we do not currently pay dividends on our Common
Stock and have no current plans to do so in the future. We have estimated a forfeiture rate of 10%
for our non-officers and 0% for our officers in our calculation of share-based compensation expense
for the three and nine month periods ended July 31, 2011 and August 1, 2010. These estimates are
based on historical forfeiture behavior exhibited by our employees.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average assumptions for the equity awards granted on December 14, 2010 and December
11, 2009 are noted in the following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 14, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 11, 2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">51.53</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">46.05</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected term (in years)
</div></td>
<td> </td>
<td> </td>
<td align="right">5.75</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.75</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.21</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.44</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Prior to March 5, 2010, the Company did not have sufficient common shares available to settle the
restricted stock and stock option awards, and thus, we classified a portion of the awards as
liability awards in accordance with ASC Subtopic 718-10, Compensation-
Stock Compensation (“ASC 718-10”). ASC 718-10 requires that liability awards be remeasured at fair
value at each reporting date with changes in fair value recognized in earnings. On March 5, 2010,
the Company effected a reverse stock split at an exchange ratio of 1-for-5 (the “Reverse Stock
Split”) which caused the shares to become available and resulted in all restricted stock and stock
option awards being classified as equity awards. As such, on March 5, 2010, all liability awards
were reclassified to equity awards and remeasured using a valuation date of March 5, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average assumptions for the liability awards at the December 11, 2009 grant date and
the subsequent reclassification to equity awards remeasured on March 5, 2010 are noted in the
following table:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 5, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 11, 2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">47.01</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">46.05</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected term (in years)
</div></td>
<td> </td>
<td> </td>
<td align="right">5.52</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.75</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.49</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.44</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the nine month period ended July 31, 2011 and August 1, 2010, we granted 121,669 and
1,781,729 stock options, respectively, and the weighted average grant-date fair value of options
granted was $5.78 and $4.29, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of restricted stock awards classified as equity awards is based on the Company’s
stock price as of the date of grant. During the nine months ended July 31, 2011 and August 1, 2010,
we granted restricted stock awards with a fair value of $6.2 million or 515,053 shares and $13.7
million or 1,498,718 shares, respectively. The total recurring pre-tax share-based compensation
cost that has been recognized in results of operations was $1.7 million and $1.4 million for the
three months ended July 31, 2011 and August 1, 2010, respectively, and $5.1 million and $3.6
million for the nine months ended July 31, 2011 and August 1, 2010, respectively. Of these amounts,
$1.7 million and $1.4 million for the three months ended July 31, 2011 and August 1, 2010,
respectively, and $4.9 million and $3.5 million for the nine months ended July 31, 2011 and August
1, 2010, respectively, were included in engineering, selling, general and administrative expenses,
with the remaining costs in each period in cost of sales. As of both July 31, 2011 and August 1,
2010, we do not have any amounts capitalized for share-based compensation cost in inventory or
similar assets. The total income tax benefit recognized in results of operations for share-based
compensation arrangements was $0.7 million and $0.5 million for the three months ended July 31,
2011 and August 1, 2010, respectively, and $2.0 million and $1.4 million for the nine months ended
July 31, 2011 and August 1, 2010, respectively. As of July 31, 2011 and August 1, 2010, there was
approximately $19.9 million and $19.6 million, respectively, of total unrecognized compensation
cost related to share-based compensation arrangements and this cost is expected to be recognized
over a weighted-average remaining period of 3.0 years and 3.8 years, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">There were no options exercised during the first nine months of each of fiscal 2011 and fiscal
2010.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 7 — LOSS PER COMMON SHARE </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Basic loss per common share is computed by dividing net loss allocated to common shares by the
weighted average number of common shares outstanding. Diluted loss per common share considers the
dilutive effect of common stock equivalents. The reconciliation of the numerator and denominator
used for the computation of basic and diluted loss per common share is as follows (in thousands,
except per share data):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Numerator for Basic and Diluted Loss
Per Common Share</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net loss allocated to common shares (1)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,077</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16,519</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(43,067</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(292,671</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Denominator for Basic and Diluted Loss
Per Common Share</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average common shares
outstanding for basic and diluted loss
per share
</div></td>
<td> </td>
<td> </td>
<td align="right">18,467</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,274</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,292</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,184</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic and Diluted loss per common share
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.71</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(0.90</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2.35</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16.10</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Participating securities consist of the holders of the Convertible Preferred Stock, as
defined below, and the unvested restricted Common Stock related to our Incentive Plan.
Participating securities do not have a contractual obligation to share in losses;
therefore, no losses were allocated in any periods presented above. These participating
securities will be allocated earnings when applicable.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We calculate earnings per share using the “two-class” method, whereby unvested share-based payment
awards that contain non-forfeitable rights to dividends or dividend equivalents are “participating
securities” and, therefore, these participating securities are treated as a separate class in
computing earnings per share. The calculation of earnings per share for Common Stock presented here
excludes the income, if any, attributable to the unvested restricted stock awards and our Series B
Cumulative Convertible Participating Preferred Stock (“Convertible Preferred Stock,” and shares
thereof, “Preferred Shares”) from the numerator and excludes the dilutive impact of those shares
from the denominator. There was no income amount attributable to unvested restricted stock or
Preferred Shares for the three and nine month periods ended July 31, 2011 and August 1, 2010 as the
restricted stock and Preferred Shares do not share in the net losses. However, in periods of net
income, a portion of this income will be allocable to the restricted stock and Preferred Shares. As
of July 31, 2011 and October 31, 2010, the Preferred Shares were convertible into 45.7 million and
44.3 million shares of Common Stock, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For both the three and nine month periods ended July 31, 2011 and August 1, 2010, all options and
unvested restricted shares were anti-dilutive and, therefore, not included in the diluted loss per
common share calculation.
</div>
</div>
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<!-- Begin Block Tagged Note 8 - us-gaap:ProductWarrantyDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 8 — WARRANTY </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We sell weathertightness warranties to our customers for protection from leaks in our roofing
systems related to weather. These warranties range from two years to 20 years. We sell two types of
warranties, standard and Single Source™, and three grades of coverage for each. The type and
grade of coverage determines the price to the customer. For standard warranties, our responsibility
for leaks in a roofing system begins after 24 consecutive leak-free months. For Single Source™
warranties, the roofing system must pass our inspection before warranty coverage will be issued.
Inspections are typically performed at three stages of the roofing project: (i) at the project
start-up; (ii) at the project mid-point; and (iii) at the project completion. These inspections are
included in the cost of the warranty. If the project requires or the customer requests additional
inspections, those inspections are billed to the customer. Upon the sale of a warranty, we record
the resulting revenue as deferred warranty revenue, which is included in other accrued expenses in
our Consolidated Balance Sheets. We recognize deferred warranty revenue over the warranty coverage
period in a manner that matches our estimated expenses relating to the warranty. Additionally, we
maintain an accrued warranty at Robertson-Ceco II Corporation (“RCC”) in which the balance was $3.1
million at both July 31, 2011 and October 31, 2010, respectively. RCC’s accrued warranty programs
have similar terms and characteristics to our other warranty programs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table represents the rollforward of our acquired accrued warranty obligation and
deferred warranty revenue activity for each of the fiscal nine months ended (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Beginning balance</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,977</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,116</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Warranties sold
</div></td>
<td> </td>
<td> </td>
<td align="right">2,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,028</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Revenue recognized
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,205</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,024</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Costs incurred
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(313</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(309</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(119</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Ending balance</b>
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17,544</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,688</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<!-- Begin Block Tagged Note 9 - us-gaap:LongTermDebtTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 9 — LONG-TERM DEBT AND NOTE PAYABLE </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Debt is comprised of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amended Credit Agreement (due April 2014, interest at 8.0%)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">131,056</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">136,305</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset-Based Lending Facility (due April 2014, interest at 4.75%)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">131,056</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136,305</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Current portion of long-term debt
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total long-term debt, less current portion
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">131,056</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">136,305</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Amended Credit Agreement</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On October 20, 2009, we entered into the Amended Credit Agreement (the “Amended Credit Agreement”),
pursuant to which we repaid $143.3 million of the $293.3 million in principal amount of term loans
outstanding under such credit agreement and modified
the terms and maturity of the remaining $150.0 million balance. The terms of the term loan require
quarterly principal payments in an amount equal to 0.25% of the principal amount of the term loan
then outstanding as of the last day of each calendar quarter and a final payment of approximately
$136.3 million at maturity on April 20, 2014. We made a mandatory prepayment on the Amended Credit
Agreement in May 2010 in connection with our tax refund resulting from the carry back of the 2009
net operating loss. In June 2011, March 2011 and December 2010, we made optional prepayments in the
amount of $1.5 million, $1.0 million and $2.8 million, respectively. These prepayments are allowed
to be applied against the remaining required quarterly principal payments, and as a result, we are
not required to make any additional quarterly principal payments for the remaining term of the term
loan, although we intend to continue to make voluntary prepayments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Company’s obligations under the Amended Credit Agreement and any interest rate protection
agreements or other permitted hedging agreement entered into with any lender under the Amended
Credit Agreement are irrevocably and unconditionally guaranteed on a joint and several basis by
each direct and indirect domestic subsidiary of the Company (other than any domestic subsidiary
that is a foreign subsidiary holding company or a subsidiary of a foreign subsidiary).
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The obligations under the Amended Credit Agreement and under any permitted hedging agreement and
the guarantees thereof are secured by (i) all of the capital stock and other equity interests of
all direct domestic subsidiaries owned by the Company and the guarantors, (ii) up to 65% of the
capital stock of certain direct foreign subsidiaries of the Company or any guarantor (it being
understood that a foreign subsidiary holding company or a domestic subsidiary of a foreign
subsidiary is considered a foreign subsidiary for these purposes) and (iii) substantially all other
tangible and intangible assets owned by the Company and each guarantor, including liens on material
real property, in each case to the extent permitted by applicable law and subject to certain
enumerated exceptions. The liens securing the obligations under the Amended Credit Agreement, the
permitted hedging agreements and the guarantees thereof are first in priority (as between the
Amended Credit Agreement and the Asset-Based Lending Facility (the “ABL Facility”)) with respect to
stock, material real property and assets other than accounts receivable, inventory, certain deposit
accounts, associated intangibles and certain other specified assets of the Company and the
guarantors. Such liens are second in priority (as between the Amended Credit Agreement and the ABL
Facility) with respect to accounts receivable, inventory, associated intangibles and certain other
specified assets of the Company and the guarantors.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Amended Credit Agreement contains a number of covenants that, among other things, limit or
restrict our ability to dispose of assets, incur additional indebtedness, incur guarantee
obligations, prepay other indebtedness, make dividends and other restricted payments, create liens,
make investments, make acquisitions, engage in mergers, change the nature of our business and
engage in certain transactions with affiliates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Amended Credit Agreement has no financial covenants until October 30, 2011 (subject to
prepayment deferrals as noted below), at which time our consolidated leverage ratio of net
indebtedness to EBITDA must be no more than 5 to 1. Net indebtedness is defined as consolidated
debt less the lesser of unrestricted cash or $50 million. This ratio steps down by 0.25 each
quarter until October 28, 2012 at which time the maximum ratio is 4 to 1. The ratio continues to
step down by 0.125 each quarter until November 3, 2013 to a ratio of 3.5 to 1, which remains the
maximum ratio for each fiscal quarter thereafter. We will, however, not be subject to this
financial covenant with respect to a specified period if certain prepayments or repurchases of the
term loans under the Amended Credit Agreement are made prior to the specified period. Based on our
prepayments made through July 31, 2011, including the mandatory prepayment in connection with our
tax refund, the leverage ratio covenant has been effectively deferred until the first quarter of
fiscal 2013. At July 31, 2011 and October 31, 2010, our Amended Credit Agreement did not require
any financial covenant compliance.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Term loans under the Amended Credit Agreement may be repaid at any time, without premium or penalty
but subject to customary LIBOR breakage costs. We also have the ability to repurchase a portion of
the term loans under the Amended Credit Agreement, subject to certain terms and conditions set
forth in the Amended Credit Agreement. In addition, the Amended Credit Agreement requires mandatory
prepayment and reduction in an amount equal to:
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>the net cash proceeds of (1) certain asset sales, (2) certain debt offerings and (3) certain
insurance recovery and condemnation events; and</td>
</tr>
</table>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>50% of annual excess cash flow (as defined in the Amended Credit Agreement) for any fiscal
year ending on or after October 31, 2010, unless a specified leverage ratio target is met.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Amended Credit Agreement limits our ability to pay cash dividends on or prior to October 31,
2010 after which time we are permitted to pay dividends in an amount not to exceed the available
amount (as defined in the Amended Credit Agreement). The available amount is defined as the sum of
50% of the cumulative consolidated net income from August 2, 2009 to the end of the most recent
fiscal quarter, plus net proceeds of property or assets received as capital contributions, less the
sum of all dividends, payments
or other distributions of such available amounts, in each case subject to certain adjustments and
exceptions as specified in the Amended Credit Agreement. In the absence of accumulated earnings,
cash dividends and other cash restricted payments are limited to $14.5 million in the aggregate
during the term of the loan of which we used $11.0 million as of July 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The term loan under the Amended Credit Agreement bears interest, at our option, at either LIBOR or
Base Rate plus an applicable margin. To date, we have selected LIBOR interest rates. Overdue
amounts will bear interest at a rate that is 2% higher than the rate otherwise applicable. “Base
Rate” is defined as the highest of (i) the Wells Fargo Bank, National Association prime rate, (ii)
the overnight Federal Funds rate plus 0.5%, and (iii) 3%. “LIBOR” is defined as the applicable
London interbank offered rate (not to be less than 2%) adjusted for reserves. The applicable margin
until October 30, 2011 will be 5.00% on Base Rate loans and 6.00% on LIBOR loans under the Amended
Credit Agreement.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>ABL Facility</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On October 20, 2009, the subsidiaries of the Company, NCI Group, Inc. and RCC and the Company
entered into the ABL Facility pursuant to a loan and security agreement that provided for a $125.0
million asset-based loan facility. The ABL Facility allows us an aggregate maximum borrowing of up
to $125.0 million. Borrowing availability under the ABL Facility is determined by a monthly
borrowing base collateral calculation that is based on specified percentages of the value of
qualified cash, eligible inventory and eligible accounts receivable, less certain reserves and
subject to certain other adjustments. At July 31, 2011 and October 31, 2010, our excess
availability under the ABL Facility was $104.5 million and $73.8 million, respectively. The ABL
Facility has a maturity of April 20, 2014 and includes borrowing capacity of up to $25 million for
letters of credit and up to $10 million for swingline borrowings. Under the ABL Facility, there
were no amounts of borrowings outstanding at both July 31, 2011 and October 31, 2010. In addition,
at July 31, 2011 and October 31, 2010, standby letters of credit totaling approximately $6.4
million and $8.1 million, respectively, were issued under the ABL Facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On December 3, 2010, we finalized an amendment of our ABL Facility that reduces the unused
commitment fee from 1% or 0.75% based on the average daily balance of loans and letters of credit
obligations outstanding to an annual rate of 0.5%. The calculation is determined on the amount by
which the maximum credit exceeds the average daily principal balance of outstanding loans and
letter of credit obligations. Additional customary fees in connection with the ABL Facility also
apply. In addition, the amendment reduced the effective interest rate on borrowings, if any, by
nearly 40% or 175 basis points. It also relaxes the prohibitions against making restricted payments
or paying cash dividends, including on the Convertible Preferred Stock, to allow, in the aggregate,
up to $6.5 million of restricted payments or cash dividends each calendar quarter, provided certain
excess availability conditions or certain other excess availability conditions and a fixed charge
coverage ratio under the ABL Facility are satisfied.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The obligations of the borrowers under the ABL Facility are guaranteed by us and each direct and
indirect domestic subsidiary of the Company (other than any domestic subsidiary that is a foreign
subsidiary holding company or a subsidiary of a foreign subsidiary) that is not a borrower under
the ABL Facility. Our obligations under certain specified bank products agreements are guaranteed
by each borrower and each other direct and indirect domestic subsidiary of the Company and the
other guarantors. These guarantees are made pursuant to a guarantee agreement, dated as of October
20, 2009, entered into by the Company and each other guarantor with Wells Fargo Foothill, LLC, as
administrative agent.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The obligations under the ABL Facility and the guarantees thereof are secured by a first priority
lien on our accounts receivable, inventory, certain deposit accounts, associated intangibles and
certain other specified assets of the Company and a second priority lien on the assets securing the
term loans under the Amended Credit Agreement on a first-lien basis, in each case subject to
certain exceptions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The ABL Facility contains a number of covenants that, among other things, limit or restrict our
ability to dispose of assets, incur additional indebtedness, incur guarantee obligations, engage in
sale and leaseback transactions, prepay other indebtedness, modify organizational documents and
certain other agreements, create restrictions affecting subsidiaries, make dividends and other
restricted payments, create liens, make investments, make acquisitions, engage in mergers, change
the nature of our business and engage in certain transactions with affiliates.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Under the ABL Facility, a “Dominion Event” occurs if either an event of default is continuing or
excess availability falls below certain levels, during which period, and for certain periods
thereafter, the administrative agent may apply all amounts in the Company’s, the borrowers’ and the
other guarantors’ concentration accounts to the repayment of the loans outstanding under the ABL
Facility, subject to the Intercreditor Agreement. In addition, during such Dominion Event, we are
required to make mandatory payments on our ABL
Facility upon the occurrence of certain events, including the sale of assets and the issuance of
debt, in each case subject to certain limitations and conditions set forth in the ABL Facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The ABL Facility includes a minimum fixed charge coverage ratio of one to one, which will apply if
we fail to maintain at least $15 million of minimum borrowing capacity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Loans under the ABL Facility bear interest, at our option, as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     (1) Base Rate loans at the Base Rate plus a margin. The margin ranges from 1.50% to 2.00%
depending on the quarterly average excess availability under such facility, and
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">     (2) LIBOR loans at LIBOR plus a margin. The margin ranges from 2.50% to 3.00% depending on
the quarterly average excess availability under such facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During an event of default, loans under the ABL Facility will bear interest at a rate that is 2%
higher than the rate otherwise applicable. “Base Rate” is defined as the higher of the Wells Fargo
Bank, N.A. prime rate and the overnight Federal Funds rate plus 0.5% and “LIBOR” is defined as the
applicable London interbank offered rate adjusted for reserves.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Deferred Financing Costs</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At July 31, 2011 and October 31, 2010, the unamortized balance in deferred financing costs was
$12.7 million and $16.2 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Insurance Note Payable</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The note payable is related to financed insurance premiums. As of July 31, 2011 and October 31,
2010, we had outstanding a note payable in the amount of $0.7 million and $0.3 million,
respectively. Insurance premium financings are generally secured by the unearned premiums under
such policies.
</div>
</div>
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<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 10 — SERIES B CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>The CD&R Equity Investment</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On August 14, 2009, the Company entered into an Investment Agreement (as amended, the “Investment
Agreement”), by and between the Company and Clayton, Dubilier & Rice Fund VIII, L.P. (“CD&R Fund
VIII”), pursuant to which the Company agreed to issue and sell to CD&R Fund VIII, and CD&R Fund
VIII agreed to purchase from the Company, for an aggregate purchase price of $250 million (less
reimbursement to CD&R Fund VIII or direct payment to its service providers of up to $14.5 million
in the aggregate of transaction expenses and a deal fee, paid to Clayton, Dubilier & Rice, Inc.,
the manager of CD&R Fund VIII, of $8.25 million), 250,000 shares of Convertible Preferred Stock.
Pursuant to the Investment Agreement, on October 20, 2009 (the “Closing Date”), the Company issued
and sold to CD&R Fund VIII and CD&R Friends & Family Fund VIII, L.P. (the “CD&R Funds”), and the
CD&R Funds purchased from the Company, an aggregate of 250,000 Preferred Shares, representing
approximately 39.2 million shares of Common Stock or 68.4% of the voting power and Common Stock of
the Company on an as-converted basis as of the Closing Date (such purchase and sale, the “CD&R
Equity Investment”). At July 31, 2011, the CD&R Funds own 69.5% of the voting power and Common
Stock of the Company on an as-converted basis.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Certain Terms of the Convertible Preferred Stock</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In connection with the consummation of the CD&R Equity Investment, on October 19, 2009 we filed the
Certificate of Designations of the Convertible Preferred Stock (the “Certificate of Designations”),
setting forth the terms, rights, powers, and preferences, and the qualifications, limitations and
restrictions thereof, of the Convertible Preferred Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Liquidation Value. </i>Each Preferred Share has an initial liquidation preference of $1,000.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Rank. </i>The Convertible Preferred Stock ranks senior as to dividend rights, redemption payments and
rights upon liquidation to the Common Stock and each other class or series of our equity
securities, whether currently issued or to be issued in the future, that by its terms ranks junior
to the Convertible Preferred Stock, and junior to each class or series of equity securities of the
Company, whether currently issued or issued in the future, that by its terms ranks senior to the
Convertible Preferred Stock. We have no outstanding
securities ranking senior to the Convertible Preferred Stock. Pursuant to the Certificate of
Designations, the issuance of any senior securities of the Company requires the approval of the
holders of the Convertible Preferred Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Dividends. </i>Dividends on the Convertible Preferred Stock are payable, on a cumulative daily basis,
as and if declared by the board of directors, at a rate per annum of 12% of the sum of the
liquidation preference of $1,000 per Preferred Share plus accrued and unpaid dividends thereon or
at a rate per annum of 8% of the sum of the liquidation preference of $1,000 per Preferred Share
plus any accrued and unpaid dividends thereon if paid in cash on the dividend payment date on which
such dividends would otherwise compound. If dividends are not paid on the dividend payment date,
either in cash or in kind, such dividends compound on the dividend payment date. Members of the
board of directors who are not affiliated with the CD&R Funds have the right to choose whether such
dividends are paid in cash or in-kind, subject to the conditions of the Amended Credit Agreement
and ABL Facility which restricts the Company’s ability to pay cash dividends until the first
quarter of fiscal 2011 under the Amended Credit Agreement and until October 20, 2010 under the ABL
Facility. In addition, the Company’s Amended Credit Agreement currently restricts the payment of
cash dividends to 50% of cumulative earnings beginning with the fourth quarter of 2009, and in the
absence of accumulated earnings, cash dividends and other cash restricted payments are limited to
$14.5 million in the aggregate during the term of the loan of which we used $11.0 million as of
July 31, 2011. The Company’s ABL Facility, among other potentially available baskets, permits the
Company to pay cash dividends, including on the Convertible Preferred Stock, up to $6.5 million
each calendar quarter, provided certain excess availability conditions or certain other excess
availability conditions and a fixed charge coverage ratio under the ABL Facility are satisfied.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">If, at any time after the 30-month anniversary of the Closing Date of October 20, 2009, the trading
price of the Common Stock exceeds 200% of the initial conversion price of the Convertible Preferred
Stock ($6.3740, as adjusted for any stock dividends, splits, combinations or similar events) for
each of 20 consecutive trading days (the “Dividend Rate Reduction Event”), the dividend rate
(excluding any applicable adjustments as a result of a default) will become 0.00%. However, this
does not preclude the payment of default dividends after the 30-month anniversary of the Closing
Date. As a result of certain restrictions on dividend payments in the Company’s Amended Credit
Agreement and ABL Facility, the dividends for each quarter of fiscal 2010 were paid in-kind, at a
pro rata rate of 12% per annum. See Note 9—Long-term Debt for more information on our Amended
Credit Agreement and ABL Facility.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At any time prior to the Dividend Rate Reduction Event, if dividends are not declared in cash on
the applicable dividend declaration date, the rate at which such dividends are payable will be at
least 12% per annum. Prior to the vote of the Dividend Payment Committee, the Company is obligated
to the 12% dividend rate. Therefore, the Company accrues dividends daily based on the 12% rate and
if and when the Company determines the dividends will be paid in cash on the applicable dividend
declaration date, the Company will record a subsequent benefit of the excess 4% accrual upon the
board’s declaration of such cash dividend and reverse the beneficial conversion feature charge
associated with such accrual.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The dividend rate will increase by up to 6% per annum above the rates described in the preceding
paragraph upon and during certain defaults specified in the Certificate of Designations involving
the Company’s failure to have a number of authorized and unissued shares of Common Stock reserved
and available sufficient for the conversion of all outstanding Preferred Shares. The Company
currently has sufficient authorized, unissued and reserved shares of Common Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On the Dividend Payment Committee date, the Company has the right to choose whether dividends are
paid in cash or in-kind. However, the first dividend payment which was scheduled to be paid on
December 15, 2009 in the amount of $4.6 million, was required to be paid in cash by the Certificate
of Designations but could not be paid in cash based on the terms of our Amended Credit Agreement
and ABL Facility which restricted the Company’s ability to pay cash dividends until the first
quarter of fiscal 2011 and until October 20, 2010, respectively. As a result, the dividend for the
period up to the December 15, 2009 dividend payment date compounded at a rate of 12% per annum. We
currently cannot pay this dividend in cash because the Company’s Amended Credit Agreement currently
restricts the payment of cash dividends to 50% of cumulative earnings beginning with the fourth
quarter of 2009, and in the absence of accumulated earnings, cash dividends and other cash
restricted payments are limited to $14.5 million in the aggregate during the term of the loan of
which we used $11.0 million as of July 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition to any dividends declared and paid as described in the preceding paragraphs, holders of
the outstanding Preferred Shares also have the right to participate equally and ratably, on an
as-converted basis, with the holders of shares of Common Stock in all cash dividends and
distributions paid on the Common Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On June 15, 2011, the Dividend Payment Committee of the board of directors declared and paid to the
holders of Convertible Preferred Stock, the CD&R Funds, a dividend of 8,416.9531 shares of
Convertible Preferred Stock for the period from March 16, 2011 to June 15, 2011.
</div>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">On March 15, 2011, the Dividend Payment Committee of the board of directors declared and paid to
the holders of Convertible Preferred Stock, the CD&R Funds, a $5.5 million cash dividend at a pro
rata rate of 8% per annum. As a result of paying an 8% cash dividend, we recorded a dividend
accrual reversal of $2.7 million in the second quarter of fiscal 2011 related to dividends accrued
in excess of 8% between December 16, 2010 and March 15, 2011. In addition, we reversed the related
beneficial conversion feature previously recorded of $8.2 million in the second quarter of fiscal
2011 related to the paid-in-kind dividends accrued between December 16, 2010 and March 15, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Similarly, on December 15, 2010, the Dividend Payment Committee of the board of directors declared
and paid to the holders of Convertible Preferred Stock, the CD&R Funds, a $5.55 million cash
dividend at a pro rata rate of 8% per annum. As a result of paying an 8% cash dividend, we recorded
a dividend accrual reversal of $2.5 million in the first quarter of fiscal 2011 related to
dividends accrued in excess of 8% between September 16, 2010 and December 15, 2010. In addition, we
reversed the related beneficial conversion feature previously recorded of $5.1 million in the first
quarter of fiscal 2011 related to the paid-in-kind dividends accrued between September 16, 2010 and
December 15, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Convertibility and Anti-Dilution Adjustments. </i>To the extent that we have authorized but unissued
shares of Common Stock, holders of Preferred Shares have the right, at any time and from time to
time, at their option, to convert any or all of their Preferred Shares, in whole or in part, into
fully paid and non-assessable shares of the Company’s Common Stock at the conversion price set
forth in the Certificate of Designations. The number of shares of Common Stock into which a
Preferred Share is convertible is determined by dividing the sum of the liquidation preference of
$1,000 per Preferred Share and the accrued and unpaid dividends of such share as of the time of
conversion by the conversion price in effect at the time of conversion.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The initial conversion price of the Convertible Preferred Stock was equal to $6.3740, as adjusted
for the Reverse Stock Split. The conversion price is subject to adjustment as set forth in the
Certificate of Designations and is subject to customary anti-dilution adjustments, including stock
dividends, splits, combinations or similar events and issuance of our Common Stock at a price below
the then-current market price and, within the first three years after the Closing Date, issuances
of our Common Stock below the then applicable conversion price.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Milestone Redemption Right. </i>The Company has the right, at any time on or after the tenth
anniversary of the Closing Date, to redeem in whole, but not in part, all then-issued and
outstanding shares of Convertible Preferred Stock in accordance with the procedures set forth in
the Certificate of Designations. Any holder of Convertible Preferred Stock has the right, at any
time on or after the tenth anniversary of the Closing Date, to require that the Company redeem all,
but not less than all, of its shares of Convertible Preferred Stock in accordance with the
procedures set forth in the Certificate of Designations. In each case, such right (the “Milestone
Redemption Right”), is exercisable at a redemption price for each Preferred Share equal to the sum
of the liquidation preference of $1,000 per Preferred Share and the accrued and unpaid dividends of
such share as of the time of redemption.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Change of Control Redemption Right. </i>Upon certain change of control events specified in the
Certificate of Designations, including certain business combinations involving the Company and
certain changes to the beneficial ownership of the voting power of the Company, so long as the CD&R
Funds do not own 45% or more of the voting power of the Company and directors designated by the
CD&R Funds are not entitled to cast a majority of the total number of votes that can be cast by the
Company’s board of directors or by the directors constituting the quorum approving or recommending
such change of control event, holders of Preferred Shares are able to require redemption by the
Company, in whole but not in part, of the Convertible Preferred Stock (1) if redeemed after the
fourth anniversary of the Closing Date, at a purchase price equal to the sum of the liquidation
value of such Preferred Shares and the accrued and unpaid dividends thereon as of the redemption
date or (2) if redeemed prior to the fourth anniversary of the Closing Date, at a purchase price
equal to the sum of (a) the liquidation value of such Preferred Shares plus the accrued and unpaid
dividends thereon as of the redemption date and (b) a make-whole premium equal to the net present
value of the sum of all dividends that would otherwise be payable on and after the redemption date,
to and including such fourth anniversary date, assuming that such dividends are paid in cash. In
addition, upon change of control events pursuant to the Amended Credit Agreement or the ABL
Facility, holders of Preferred Shares are able to require redemption by the Company, in whole but
not in part, of the Convertible Preferred Stock, at a purchase price equal to 101% of the sum of
the liquidation value of such Preferred Shares and the accrued and unpaid dividends thereon as of
the redemption date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the event of a merger or other business combination resulting in a change of control in which
the holders of shares of our Common Stock receive cash or securities of an unaffiliated entity as
consideration for such shares, if the holder of Preferred Shares does not exercise the change of
control redemption right described in the paragraph above or is not entitled to the change of
control redemption right in connection with such event, such holder will be entitled to receive,
pursuant to such merger or business combination, the consideration such holder would have received
for its Preferred Shares had it converted such shares immediately prior to the merger or business
combination transaction. In the event of a merger or other business combination not resulting in a
change of control in which
the holders of shares of our Common Stock receive cash or securities of an unaffiliated entity as
consideration for such shares, holders of Convertible Preferred Stock shall have the option to
exchange their Preferred Shares for shares of the surviving entity’s capital stock having terms,
preferences, rights, privileges and powers no less favorable than the terms, preferences, rights,
privileges and powers under the Certificate of Designations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Vote. </i>Holders of Preferred Shares generally are entitled to vote with the holders of the shares of
our Common Stock on all matters submitted for a vote of holders of shares of the Company’s Common
Stock (voting together with the holders of shares of our Common Stock as one class) and are
entitled to a number of votes equal to the number of shares of Common Stock issuable upon
conversion of such holder’s Preferred Shares (without any limitations based on our authorized but
unissued shares of the Company’s Common Stock) as of the applicable record date for the
determination of stockholders entitled to vote on such matters.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Certain matters require the approval of the holders of a majority of the outstanding Preferred
Shares, voting as a separate class, including (1) amendments or modifications to the Company’s
Certificate of Incorporation, by-laws or the Certificate of Designations, that would adversely
affect the terms or the powers, preferences, rights or privileges of the Convertible Preferred
Stock, (2) authorization, creation, increase in the authorized amount of, or issuance of any class
or series of senior securities or any security convertible into, or exchangeable or exercisable
for, shares of senior securities and (3) any increase or decrease in the authorized number of
Preferred Shares or the issuance of additional Preferred Shares.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, in the event that the Company fails to fulfill its obligations to redeem the
Convertible Preferred Stock in accordance with the terms of the Certificate of Designations
following the exercise of the Milestone Redemption Right or change of control redemption rights
described above, until such failure is remedied, certain additional actions of the Company shall
require the approval of the holders of a majority of the outstanding Preferred Shares, voting as a
separate class, including the adoption of an annual budget, the hiring and firing, or the changing
of the compensation, of executive officers and the commitment, resolution or agreement to effect
any business combination.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Restriction on Dividends on Junior Securities. </i>The Company is prohibited from (i) paying any
dividend with respect to our Common Stock or other junior securities, except for ordinary cash
dividends in which the Convertible Preferred Stock participates and which are declared, paid or set
aside after the base dividend rate for the Convertible Preferred Stock has been reduced to 0.00% as
described above and dividends payable solely in shares of our Common Stock or other junior
securities, or (ii) repurchasing or redeeming any shares of our Common Stock or other junior
securities, unless, in each case, we have sufficient access to lawful funds immediately following
such action such that we would be legally permitted to redeem in full all Preferred Shares then
outstanding.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Accounting for Convertible Preferred Stock</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The Convertible Preferred Stock balance and changes in the carrying amount of the Convertible
Preferred Stock are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Dividends</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Convertible</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>and</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Preferred</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Accretion</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Stock</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance as of October 31, 2010
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">256,870</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accretion
</div></td>
<td> </td>
<td> </td>
<td align="right">680</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued paid-in-kind dividends(1)
</div></td>
<td> </td>
<td> </td>
<td align="right">8,051</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reversal of additional 4% accrued dividends(2)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,501</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,230</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payment of cash dividend(3)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,550</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance as of January 30, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">257,550</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accretion
</div></td>
<td> </td>
<td> </td>
<td align="right">680</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued paid-in-kind dividends(1)
</div></td>
<td> </td>
<td> </td>
<td align="right">8,325</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reversal of additional 4% accrued dividends(4)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,745</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,260</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payment of cash dividend(5)
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,489</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance as of May 1, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">258,321</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accretion
</div></td>
<td> </td>
<td> </td>
<td align="right">680</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued paid-in-kind dividends(1)
</div></td>
<td> </td>
<td> </td>
<td align="right">8,496</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,176</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance as of July 31, 2011</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">267,497</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Dividends are accrued at the 12% rate on a daily basis until the dividend declaration date.</td>
</tr>
<tr style="font-size: 6pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(2)</td>
<td> </td>
<td>The reversal of the additional 4% accrued dividends relates to the period from September 16,
2010 to December 15, 2010.</td>
</tr>
<tr style="font-size: 6pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(3)</td>
<td> </td>
<td>The payment of the December 15, 2010 cash dividend relates to the period from September 16,
2010 to December 15, 2010.</td>
</tr>
<tr style="font-size: 6pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(4)</td>
<td> </td>
<td>The reversal of the additional 4% accrued dividends relates to the period from December 16,
2010 to March 15, 2011.</td>
</tr>
<tr style="font-size: 6pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(5)</td>
<td> </td>
<td>The payment of the March 15, 2011 cash dividend relates to the period from December 16, 2010
to March 15, 2011.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with ASC Topic 815, <i>Derivatives and Hedging</i>, and ASC Topic 480, <i>Distinguishing
Liabilities from Equity, </i>we classified the Convertible Preferred Stock as mezzanine equity because
the Convertible Preferred Stock (1) can be settled in cash or shares of our Common Stock, (2)
contains change of control rights allowing for early redemption, and (3) contains Milestone
Redemption Rights which allow the Convertible Preferred Stock to remain outstanding without a
stated maturity date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the Certificate of Designations, which is the underlying contract of the Convertible
Preferred Stock, includes features that are required to be bifurcated and recorded at fair value.
We classified the Convertible Preferred Stock as an equity host contract because of (1) the voting
rights, (2) the participating dividends on Common Stock and mandatory, cumulative preferred stock
dividends, and (3) the Milestone Redemption Right which allows the Convertible Preferred Stock to
remain outstanding without a stated maturity date. We then determined that the conditions resulting
in the application of the default dividend rate are not clearly and closely related to this equity
host contract and we bifurcated and separately recorded these features at fair value. See Note
12-Derivative Instruments and Hedging Strategy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Because the dividends accrue and accumulate on a daily basis and the amount payable upon redemption
of the Convertible Preferred Stock is the liquidation preference plus accrued and unpaid dividends,
accrued dividends are recorded into Convertible Preferred Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In accordance with ASC Subtopic 470-20, <i>Debt with Conversion and Other Options</i>, the Convertible
Preferred Stock contains a beneficial conversion feature because it was issued with an initial
conversion price of $6.3740 (as adjusted for the Reverse Stock Split) and the closing stock price
per share of Common Stock just prior to the execution of the CD&R Equity Investment was $12.55 (as
adjusted for the Reverse Stock Split). The intrinsic value of the beneficial conversion feature
cannot exceed the issuance proceeds of the Convertible Preferred Stock less the cash paid for the
deal fee paid to the CD&R Funds manager in connection with the CD&R Equity Investment, and thus was
$241.4 million as of October 20, 2009. At July 31, 2011 and October 31, 2010, all of the
potentially 45.7 million and 44.3 million shares of Common Stock, respectively, issuable upon
conversion of the Preferred Shares, which includes paid-in-kind dividends, were authorized and
unissued.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of July 31, 2011 and October 31, 2010, the Preferred Shares were convertible into 45.7 million
and 44.3 million shares of Common Stock, respectively, at an initial conversion price of $6.3740
(as adjusted for the Reverse Stock Split). On March 5, 2010, the Company effected the Reverse Stock
Split in which every five shares of Common Stock, that were issued and outstanding were
automatically combined into one issued and outstanding share of Common Stock. As a result of the
Reverse Stock Split on March 5, 2010, we recorded a beneficial conversion feature charge in the
amount of $230.7 million in the second quarter of fiscal 2010 related to the availability of shares
of Common Stock into which the CD&R Funds may convert their Preferred Shares. In addition, we
recorded a $6.5 million and $4.6 million beneficial conversion feature charge, prior to any
applicable reversal, in the three month periods ended July 31, 2011 and August 1, 2010,
respectively, and a $21.4 million and $15.4 million beneficial conversion feature charge, prior to
any applicable reversal, in the nine month periods ended July 31, 2011 and August 1, 2010,
respectively, related to dividends that have accrued and are convertible into shares of Common
Stock. In addition, we expect to recognize additional beneficial conversion feature charges on
paid-in-kind dividends to the extent that the Preferred Shares are accrued with a conversion price
below the prevailing fair market value of our Common Stock. Our policy is to recognize beneficial
conversion feature charges on paid-in-kind dividends based on a daily dividend recognition and the
daily closing stock price of our Common Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At any time prior to the Dividend Rate Reduction Event, if dividends are not paid in cash on the
applicable dividend payment date, the rate at which such dividends are payable will be at least 12%
per annum. Therefore, we accrue dividends daily based on the 12% rate and if and when we determine
the dividends will be paid in cash on the applicable dividend payment date, we will record a
subsequent benefit of the excess 4% accrual upon our board’s declaration of such cash dividend and
reverse the beneficial conversion feature charge associated with such accrual. However, we
currently cannot pay dividends in cash because the Company’s Amended Credit
Agreement currently restricts the payment of cash dividends to 50% of cumulative earnings beginning
with the fourth quarter of 2009, and in the absence of accumulated earnings, cash dividends and
other cash restricted payments are limited to $14.5 million in the aggregate during the term of the
loan of which we used $11.0 million as of July 31, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Our aggregate liquidation preference plus accrued dividends of the Convertible Preferred Stock at
July 31, 2011 and October 31, 2010 are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>October 31,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liquidation preference
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">280,920</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">272,503</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued cash and Convertible Preferred Stock dividends
</div></td>
<td> </td>
<td> </td>
<td align="right">10,111</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,983</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">291,031</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">282,486</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At July 31, 2011 and October 31, 2010, we had 280,920 and 272,503 Preferred Shares outstanding.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - ncs:RedeemableCommonStockTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 18pt"><u><b>NOTE 11 — REDEEMABLE COMMON STOCK</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Under federal securities laws, shares of the Company’s Common Stock purchased on behalf of
participants in the Company’s 401(k) Profit Sharing Plan (the “Plan”) are required to be registered
with the SEC or sold in transactions that are exempt from registration under the Securities Act of
1933. On February 7, 2011, the Company discovered that it inadvertently issued more shares of the
Company’s Common Stock in connection with the Plan than had been registered with the SEC. As a
result, certain participants in the Plan may bring claims against the Company for rescission or
damages in respect of the unregistered shares for an amount equal to the purchase price for the
shares (or if the shares have been disposed of, to receive damages with respect to any loss on such
disposition) plus interest, less income, from the date of purchase, although the Company believes
that such claims would be time barred. Moreover, even if such claims were allowed, the Company
believes that the statute of limitations applicable to any such claims would be one year under the
federal securities laws, and that the statute of limitations with respect to the inadvertent
issuances that occurred prior to August 1, 2010 has expired. Accordingly, at July 31, 2011,
approximately 0.1 million shares ($1.1 million) of the Company’s Common Stock were classified
outside stockholders’ equity as redeemable common stock because of the potential rescission rights.
With respect to unregistered Company Common Stock, it was determined the potential damage claims
were related to purchases made under the Plan between August 1, 2010 and February 15, 2011. The
redeemable common stock will be reclassified into permanent equity upon the expiration of the
potential rescission rights associated with those common shares. We may also be subject to civil
and other penalties by regulatory authorities as a result of the failure to register. We believe
that the potential negative impact on our Consolidated Statements of Operations will not be
material.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 18pt"><u><b>NOTE 12 — DERIVATIVE INSTRUMENTS AND HEDGING STRATEGY </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Foreign Currency Risk</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We are exposed to foreign currency risk associated with fluctuations in the foreign currency
exchange rates on certain purchase orders denominated in a foreign currency related to the purchase
of certain equipment. On March 17, 2011, we entered into a three month forward contract to pay $1.1
million and receive €0.8 million on June 15, 2011, and on March 18, 2011, we entered into a five
month forward contract to pay $1.5 million and receive €1.0 million on August 15, 2011 (“Foreign
Currency Contract I”). We designated the Foreign Currency Contract I as a cash flow hedge. The fair
value of the Foreign Currency Contract I as of July 31, 2011 was an asset of $0.02 million and is
included in prepaid expenses and other in the Consolidated Balance Sheets. The fair value of the
Foreign Currency Contract I takes into consideration the current creditworthiness of us or the
counterparty, as applicable. Accumulated other comprehensive income will amortize over the life of
the equipment purchased.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">On July 11, 2011, we entered into two additional forward contracts to pay $0.6 million and receive
€0.4 million on February 3, 2012, and to pay $1.4 million and receive €1.0 million on November 4,
2011 (“Foreign Currency Contract II”). We designated the Foreign Currency Contract II as a cash
flow hedge. The fair value of the Foreign Currency Contract II as of July 31, 2011 was an asset of
$0.04 million and is included in prepaid expenses and other in the Consolidated Balance Sheets. The
fair value of the Foreign Currency Contract II takes into consideration the current
creditworthiness of us or the counterparty, as applicable. Accumulated other comprehensive income
will amortize over the life of the equipment purchased.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Interest Rate Risk</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We are exposed to interest rate risk associated with fluctuations in the interest rates on our
variable interest rate debt. We previously managed this risk by entering into a forward interest
rate swap agreement (“Swap Agreement”) hedging a portion of our then $400 million Credit Agreement.
The Swap Agreement expired on June 17, 2010 and, therefore, there was no remaining notional amount
outstanding on July 31, 2011 and October 31, 2010. At inception, we designated the Swap Agreement
as a cash flow hedge. The fair value of the Swap Agreement excludes accrued interest and takes into
consideration current interest rates and current creditworthiness of us or the counterparty, as
applicable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">During the fourth quarter of fiscal 2009, in connection with our refinancing and Amended Credit
Agreement, we modified the terms of our credit agreement to include a 2% LIBOR minimum market
interest rate. At that time, based on the current expected LIBOR rates over the remaining term of
the Swap Agreement, the forecasted market rate interest payments had effectively converted to fixed
rate interest payments making the Swap Agreement both ineffective and the underlying hedged cash
flow no longer probable. Therefore, all subsequent changes in fair market value were recorded
directly to earnings. During the three and nine month periods ended August 1, 2010, we reduced
interest expense by $0.4 million and $1.2 million, respectively, as a result of the changes in fair
value of the hedge.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Embedded Derivative Bifurcated From Convertible Preferred Stock (See Note 10)</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The terms of the Convertible Preferred Stock include a default dividend rate of 3% per annum if we
fail to (1) pay holders of Convertible Preferred Stock, in cash on an as-converted basis, dividends
paid on shares of our Common Stock; (2) following the date that there are no Convertible Notes
outstanding, as defined in the Certificate of Designations, pay, in cash or in kind, any dividend
(other than dividends payable pursuant to the preceding clause (1)) payable to holders of Preferred
Shares pursuant to the Certificate of Designations, on the applicable quarterly dividend payment
date; (3) after June 30, 2010, reserve and keep available for issuance the number of shares of our
Common Stock equal to 110% of the number of shares of Common Stock issuable upon conversion of all
outstanding shares of Convertible Preferred Stock; (4) maintain the listing of our Common Stock on
the New York Stock Exchange or another U.S. national securities exchange; (5) comply with our
obligations to convert the Convertible Preferred Stock in accordance with our obligations under the
Certificate of Designations; (6) redeem the Convertible Preferred Stock in compliance with the
Certificate of Designations; or (7) comply with any dividend payment restrictions with respect to
junior securities dividends. If, at a time when a 3% per annum default dividend rate is in effect
after June 30, 2011, we fail to reserve and keep available authorized common shares pursuant to the
terms of the Certificate of Designations the default dividend rate shall increase to 6% until such
default is no longer continuing. The default dividend represents an embedded derivative which is
bifurcated from the CD&R Equity Investment host contract (i.e., the Certificate of Designations).
See Note 10-Series B Cumulative Convertible Participating Preferred Stock for further discussion of
the Convertible Preferred Stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">To determine the Level 3 fair value of the embedded derivative, we used a probability-weighted
discounted cash flow model and assigned probabilities for each qualified default event. We
originally recorded the fair value of the embedded derivative in the amount of $1.0 million at
November 1, 2009 in other accrued liabilities on the Consolidated Balance Sheets. The majority of
the value of the derivative was derived from the default dividend rate. On December 14, 2009, the
CD&R Funds, our majority equity holders expressed their intention to vote in favor of the proposed
Reverse Stock Split, which became effective on March 5, 2010. Based upon these events we
reevaluated the assigned probabilities used previously in the probability-weighted discounted cash
flow model. As a result, we recorded a $0.9 million decrease in fair value of the embedded
derivative during the nine months ended August 1, 2010 which was recorded in other income and
expense during the nine month period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At July 31, 2011 and October 31, 2010, the fair value carrying amount of our derivative instrument
was recorded as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="25%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Asset Derivatives</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivative
designated as hedging
instrument under ASC 815:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency contracts
</div></td>
<td> </td>
<td colspan="3" align="left">Prepaid expenses and other</td>
<td> </td>
<td align="left">$</td>
<td align="right">56</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">At July 31, 2011 and October 31, 2010, the fair value carrying amount of our derivative instrument
was recorded as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="54%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="20%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Liability Derivatives</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance Sheet</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Location</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Derivative not
designated as
hedging instruments
under ASC 815:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Embedded derivative
</div></td>
<td> </td>
<td colspan="3" align="left">Other long-term liabilities</td>
<td> </td>
<td align="left">$</td>
<td align="right">85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">104</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The effect of our derivative instrument on the Consolidated Statements of Operations for the three
and nine months ended July 31, 2011 and August 1, 2010 was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Amount of (Loss) Gain Recognized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Amount of (Loss) Gain Recognized</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>in OCI on Derivative</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>in OCI on Derivative</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center"><b>Derivative in ASC 815 Cash</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Flow Hedging Relationship</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency contracts
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(40</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The effect of derivative instruments not designated as hedging instruments on the Consolidated
Statements of Operations for the three and nine month periods ended July 31, 2011 and August 1,
2010 was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Amount of Income Recognized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Amount of Income Recognized</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>in Income (Loss) on</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>in Income (Loss) on</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center"><b>Derivatives Not Designated</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Derivatives</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Derivatives</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Location of Income</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center"><b>as Hedging Instruments</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 0px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Recognized in Income</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Under ASC 815</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>(Loss) on Derivatives</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate contract
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">413</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,248</td>
<td> </td>
<td> </td>
<td colspan="3" align="left">Interest expense</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Embedded derivative
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">930</td>
<td> </td>
<td> </td>
<td colspan="3" align="left">Other income, net</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The maximum length of time over which we are hedging our exposure to the variability of future cash
flows related to fluctuations in the foreign currency exchange rates on certain purchase orders
denominated in a foreign currency is through February 2012. Over the next 12 months, we expect to
reclassify an immaterial amount of deferred gains from accumulated other comprehensive income to
depreciation expense. We will recognize depreciation expense over the depreciable life of the fixed
asset to which the purchase orders relate.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 13 — FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Fair Value of Financial Instruments</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable
approximate fair value as of July 31, 2011 and October 31, 2010 because of the relatively short
maturity of these instruments. The fair values of the remaining financial instruments not currently
recognized at fair value on our Consolidated Balance Sheets at the respective fiscal period ends
were (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Carrying</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amended Credit Agreement
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">131,056</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">129,745</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">136,305</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">132,046</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair value of the Amended Credit Agreement was based on recent trading activities of comparable
market instruments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b><i>Fair Value Measurements</i></b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">ASC Subtopic 820-10, <i>Fair Value Measurements and Disclosures</i>, requires us to use valuation
techniques to measure fair value that maximize the use of observable inputs and minimize the use of
unobservable inputs. These inputs are prioritized as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active
markets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for
similar assets or liabilities or market-corroborated inputs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Level 3: Unobservable inputs for which there is little or no market data and which require us
to develop our own assumptions about how market participants would price the assets or liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following is a description of the valuation methodologies used for assets and liabilities
measured at fair value. There have been no changes in the methodologies used at July 31, 2011 and
October 31, 2010.
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Money market: </i>Money market funds have original maturities of three months or less. The
original cost of these assets approximates fair value due to their short-term maturity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Mutual funds: </i>Mutual funds are valued at the closing price reported in the active market in
which the mutual fund is traded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Assets held for sale: </i>Assets held for sale are valued based on current market conditions,
prices of similar assets in similar condition and expected proceeds from the sale of the assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Foreign currency contract: </i>The fair value of the foreign currency derivative is based on a
market approach and takes into consideration current foreign currency exchange rates and current
creditworthiness of us or the counterparty, as applicable.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Deferred compensation plan liability: </i>Deferred compensation plan liability comprises of
phantom investments in the deferred compensation plan and is valued at the closing price reported
in the active market in which the money market, mutual fund or NCI stock phantom investments are
traded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     <i>Embedded derivative: </i>The embedded derivative value is based on an income approach in which we
used a probability-weighted discounted cash flow model and assigned probabilities for each
qualified default event.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes information regarding our financial assets and liabilities that are
measured at fair value as of July 31, 2011 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 1</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 2</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Short-term investments in deferred compensation plan(1):
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Money market
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">205</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">205</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Mutual funds — Growth
</div></td>
<td> </td>
<td> </td>
<td align="right">692</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">692</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Mutual funds — Blend
</div></td>
<td> </td>
<td> </td>
<td align="right">1,782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,782</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Mutual funds — Foreign blend
</div></td>
<td> </td>
<td> </td>
<td align="right">780</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">780</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Mutual funds — Fixed income
</div></td>
<td> </td>
<td> </td>
<td align="right">597</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">597</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total short-term investments in deferred compensation plan
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,056</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,056</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency contracts
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,804</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,804</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,056</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,860</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,916</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred compensation plan liability
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,308</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,308</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Embedded derivative
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(85</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(85</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,308</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(85</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,393</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Unrealized holding gains (losses) for the three months ended July 31, 2011 and August 1, 2010
were $(0.2) million and $(0.1) million, respectively. Unrealized holding gains (losses) for
the nine months ended July 31, 2011 and August 1, 2010 were $0.1 million and $0.2 million,
respectively. These unrealized holding gains (losses) are primarily offset by changes in the
deferred compensation plan liability.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the activity in Level 3 financial instruments during the nine months
ended July 31, 2011 and August 1, 2010 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>August 1,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning balance
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(104</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,041</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unrealized gains (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">930</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Ending balance
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(85</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(111</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000"> 
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(1)</td>
<td> </td>
<td>Unrealized gains on the embedded derivative are recorded in other income, net in the
Consolidated Statements of Operations during the nine months ended July 31, 2011 and August 1,
2010.</td>
</tr>
</table>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 14 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 14 — INCOME TAXES </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The reconciliation of income tax computed at the statutory tax rate to the effective income tax
rate is as follows:
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>August 1,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>August 1,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Statutory federal income tax rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">State income taxes
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14.2</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35.3</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.1</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.0</td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Canada valuation allowance
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.0</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">3.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.4</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.4</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-deductible expenses
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.7</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.9</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2.7</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1.2</td>
<td nowrap="nowrap">)%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Recognition of tax benefit previously
deemed to be uncertain
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7.3</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.3</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.7</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5.8</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.7</td>
<td nowrap="nowrap">)%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.8</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.1</td>
<td nowrap="nowrap">%</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Effective tax rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.3</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">33.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In assessing the realizability of deferred tax assets, we must consider whether it is more likely
than not that some portion or all of the deferred tax assets will not be realized. We consider all
available evidence in determining whether a valuation allowance is required. Such evidence includes
the scheduled reversal of deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment, and judgment is required in considering the relative
weight of negative and positive evidence. As of July 31, 2011, we expect to fully utilize the net
U.S. deferred tax assets of $12.2 million against future operating income. However, in the event
our expectations of future operating results change, a valuation allowance may be required on our
existing unreserved net U.S. deferred tax assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The total amount of unrecognized tax benefit at July 31, 2011 and October 31, 2010 was $0.3 million
and $0.7 million, respectively, all of which would impact our effective tax rate if recognized. We
do not anticipate any material change in the total amount of unrecognized tax benefits to occur
within the next twelve months.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 15 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 15 — COMPREHENSIVE INCOME (LOSS)</b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Comprehensive loss consists of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,593</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3,299</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,361</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21,441</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange translation gain (loss) and other, net of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">199</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive
income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,570</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3,289</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,389</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21,242</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Accumulated other comprehensive loss consists of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>July 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>August 1,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign exchange translation adjustments
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">524</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">590</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Defined benefit pension plan actuarial losses
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,524</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,250</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign currency derivative
</div></td>
<td> </td>
<td> </td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,965</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,660</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A summary of the components of other comprehensive income (loss) and the related tax effects for
each of the periods presented is as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended August 1, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Before-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Tax (Expense)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Net-of-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Before-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Tax (Expense)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Net-of-Tax</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>or Benefit</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>or Benefit</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign
exchange
translation loss
and other
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">10</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Gain in fair value
of foreign currency
derivative
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(65</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">25</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(40</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other Comprehensive
(income) loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(48</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">25</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(23</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">10</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended August 1, 2010</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Before-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Tax (Expense)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Net-of-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Before-Tax</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Tax (Expense)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Net-of-Tax</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>or Benefit</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>or Benefit</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Amount</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Foreign
exchange
translation (gain)
loss and other
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(63</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(63</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">199</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Loss in fair value
of foreign currency
derivative
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">56</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other Comprehensive
(income) loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">197</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">199</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 16 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 16 — BUSINESS SEGMENTS </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We have aggregated our operations into three reportable segments based upon similarities in product
lines, manufacturing processes, marketing and management of our businesses: metal coil coating;
metal components; and engineered building systems. All business segments operate primarily in the
nonresidential construction market. Sales and earnings are influenced by general economic
conditions, the level of nonresidential construction activity, metal roof repair and retrofit
demand and the availability and terms of financing available for construction. Products of our
business segments use similar basic raw materials. The metal coil coating segment consists of
cleaning, treating, painting and slitting continuous steel coils before the steel is fabricated for
use by construction and industrial users. The metal components segment products include metal roof
and wall panels, doors, metal partitions, metal trim, insulated panels and other related
accessories. The engineered building systems segment includes the manufacturing of main frames,
Long Bay(R) Systems and value added engineering and drafting, which are typically not part of metal
components or metal coil coating products or services. The reporting segments follow the same
accounting policies used for our consolidated financial statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We evaluate a segment’s performance based primarily upon operating income before corporate
expenses. Intersegment sales are recorded based on standard material costs plus a standard markup
to cover labor and overhead and consist of: (i) hot-rolled, light gauge painted and slit material
and other services provided by the metal coil coating segment to both the engineered building
systems and metal components segments; (ii) building components provided by the metal components
segment to the engineered building systems segment; and (iii) structural framing provided by the
engineered building systems segment to the metal components segment.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Corporate assets consist primarily of cash but also include deferred financing costs, deferred
taxes and property, plant and equipment associated with our headquarters in Houston, Texas. These
items (and income and expenses related to these items) are not allocated to the segments.
Unallocated expenses include interest income, interest expense and refinancing costs and other
(expense) income.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table represents sales, operating income and total assets attributable to these
business segments for the periods indicated (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Fiscal Nine Months Ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>August 1, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total sales:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal coil coating
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">54,472</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">51,200</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">144,673</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">134,990</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal components
</div></td>
<td> </td>
<td> </td>
<td align="right">116,050</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115,507</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">309,730</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">297,382</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Engineered building systems
</div></td>
<td> </td>
<td> </td>
<td align="right">155,046</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141,446</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">386,248</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">356,787</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Intersegment sales
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(63,430</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(162,862</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(160,087</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total sales
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">262,138</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">245,292</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">677,789</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">629,072</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>External sales:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal coil coating
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,821</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,885</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">53,999</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,789</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal components
</div></td>
<td> </td>
<td> </td>
<td align="right">93,001</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">89,417</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">249,630</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">233,931</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Engineered building systems
</div></td>
<td> </td>
<td> </td>
<td align="right">149,316</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">137,990</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">374,160</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">347,352</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total sales
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">262,138</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">245,292</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">677,789</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">629,072</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Operating income (loss):</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal coil coating
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,201</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,041</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,412</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal components
</div></td>
<td> </td>
<td> </td>
<td align="right">6,545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,567</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,298</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,971</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Engineered building systems
</div></td>
<td> </td>
<td> </td>
<td align="right">7,877</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,112</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,313</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,579</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13,072</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,580</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(39,063</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(36,617</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Total operating income (loss)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">6,569</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,076</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,411</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(20,813</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Unallocated other expense
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,976</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,596</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,745</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,164</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Income (loss) before income taxes
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,593</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(3,520</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(20,156</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(32,977</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>July 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>October 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal coil coating
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">64,015</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">57,137</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Metal components
</div></td>
<td> </td>
<td> </td>
<td align="right">185,399</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">167,542</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Engineered building systems
</div></td>
<td> </td>
<td> </td>
<td align="right">214,128</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">208,232</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate
</div></td>
<td> </td>
<td> </td>
<td align="right">96,403</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">127,613</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">559,945</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">560,524</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 17 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE 17 — CONTINGENCIES </b></u>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">We were engaged in a lawsuit that was originally filed by us on August 8, 2008 in state
district court in Houston, Texas, with one of our direct customers and 14 of its end-user customers
regarding alleged leaks from our roofing panels. We sought to recover approximately $0.4
million owed for materials that were delivered to our direct customer as well as attorneys’ fees
and expenses in the lawsuit. In response to the lawsuit, our direct
customer asserted various counterclaims
and that it was entitled to actual damages in the amount of
approximately $3.2 million plus attorneys’ fees and punitive damages. During fiscal 2010 and into
the first quarter of fiscal 2011, the end-users of our roofing panels intervened in the lawsuit and
asserted various claims against us and that they were collectively entitled
to actual damages in the amount of approximately $12 million plus attorneys’ fees and punitive
damages.
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<div align="left" style="font-size: 10pt; margin-top: 6pt">Trial began on July 5, 2011 and concluded on July 21, 2011. On July 22, 2011, a jury returned a
verdict on all counts in favor of the Company. Additionally, the jury found in favor of the Company
on our direct customer’s claims for breach of contract, breach of implied warranties, fraud,
violations of the Texas Deceptive Trade Practices Act, tortious interference, business
disparagement, strict products liability, and negligent design, manufacture and marketing. Further,
the jury found in favor of the Company on the end-users’ claims for breach of implied warranties,
violations of the Texas Deceptive Trade Practices Act, strict products liability and negligent
design, manufacturing and marketing. On August 26, 2011, the district court judge entered final
judgment against our direct customer awarding the Company approximately (i) $0.4 million owed for
materials that were delivered but not paid by our direct customer, (ii) approximately $0.3 million
in attorneys’ fees, (iii) approximately $0.2 million in prejudgment interest, and (iv) up to $0.125
million in the event this lawsuit is appealed. As of the time of this filing, no appeal has been
filed by our direct customer or the end-users.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">From time to time, we and/or our subsidiaries become involved in various legal proceedings and
contingencies, considered to be in the ordinary course of business. While we are not able to
predict whether we will incur any liability in excess of insurance coverage or to accurately
estimate the damages, or the range of damages, if any, that we might incur in connection with these
legal proceedings, we believe these legal proceedings and claims will not have a material adverse
effect on our business, consolidated financial position or results of operations.
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<div align="left" style="font-size: 10pt; margin-top: 6pt"><u><b>NOTE
18 — SUBSEQUENT EVENT</b></u>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">On September 6, 2011, we entered into a Waiver and Consent with the CD&R Funds, under which (1)
the CD&R Funds, as the holders of all of our issued and outstanding Convertible Preferred Stock, agreed
to accept a paid-in-kind dividend on their Preferred Shares in respect of the quarterly dividend payment
period ending September 15, 2011 computed at the rate of 8% per annum, rather than the 12% per annum
provided for in the Certificate of Designations applicable to the Preferred Shares, and (2) the Company
waived its right under the Stockholders Agreement with the CD&R Funds to issue up to $5 million worth
of its Common Stock without the consent of the CD&R Funds during the remainder of its fiscal year
ending October 30, 2011, other than certain employee related share issuances. In view of the Waiver and
Consent, the Dividend Payment Committee of the board of directors is expected to declare and direct the
payment of the September 15, 2011 dividend on the Preferred Shares in kind at the reduced rate of 8% per
annum. As a result of accruing the dividend at the stated 12% rate,
and subsequently agreeing to the lower 8% rate, we will
record a dividend accrual reversal of $1.4 million in the fourth
quarter of fiscal 2011 related to dividends accrued between June 16,
2011 and July 31, 2011. Similarly, we will record a beneficial
conversion feature reversal of $1.1 million in the fourth quarter of
fiscal 2011 related to beneficial conversion feature charges between
June 16, 2011 and July 31, 2011.
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<div align="left" style="font-size: 10pt; margin-top: 6pt">The Waiver and Consent does not extend to dividends on the Convertible Preferred Stock accruing after
September 15, 2011 or restrict our issuance of Common Stock after October 30, 2011.
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