Financial Performance - Quanex reported net sales of $452.5 million for Q2 2025, a 70.0% increase compared to $266.2 million in Q2 2024, primarily driven by the Tyman acquisition[4] - Gross margin for Q2 2025 was $131.4 million, representing a gross margin percentage of 29.0%, up from 24.9% in Q2 2024[2] - Adjusted EBITDA for the three months ended April 30, 2025, was $61.9 million, with an adjusted EBITDA margin of 13.7%[2] - The company achieved a net income of $20.5 million in Q2 2025, compared to $15.4 million in Q2 2024[2] - Reported net income for the quarter was $20,515 million, with diluted EPS of $0.44, compared to $15,377 million and $0.46 in the same quarter last year[35] - Adjusted net income reached $27,887 million, with adjusted EPS of $0.60, up from $24,041 million and $0.73 year-over-year[35] - EBITDA for the quarter was $60,113 million, with adjusted EBITDA of $61,913 million, reflecting a significant increase from $31,531 million and $40,024 million respectively in the prior year[35] - Net sales totaled $452,478 million, compared to $266,201 million in the same quarter last year, indicating a substantial growth[35] - Operating income for the quarter was $40,921 million, showing an increase from $20,637 million year-over-year[35] Debt and Liabilities - Quanex's total debt as of April 30, 2025, was $785.0 million, with a leverage ratio of Net Debt to LTM Adjusted EBITDA decreasing to 3.2x[5] - Total liabilities remained relatively stable at $1,306,603 thousand as of April 30, 2025, compared to $1,309,042 thousand on October 31, 2024[22] - Net Debt increased to $722,351 thousand as of April 30, 2025, from a net cash position of ($932) thousand in the prior year, indicating a significant shift in financial leverage[29] - The company’s total current liabilities decreased to $244,365 thousand as of April 30, 2025, from $272,867 thousand on October 31, 2024, a reduction of approximately 10.5%[22] Cash Flow and Capital Expenditures - Cash provided by operating activities for Q2 2025 was $28.5 million, while free cash flow was $13.6 million[2] - Cash provided by operating activities for the six months ended April 30, 2025, was $15,987 thousand, down 56.7% from $36,945 thousand in the prior year[28] - Free Cash Flow for the six months ended April 30, 2025, was negative at ($10,557) thousand, compared to positive $19,762 thousand for the same period in 2024[28] - Capital expenditures for the six months ended April 30, 2025, were $26,544 thousand, an increase of 54.5% compared to $17,183 thousand in the same period of 2024[24] - The company reported a decrease in cash, cash equivalents, and restricted cash by $38,198 thousand during the six months ended April 30, 2025, compared to a decrease of $2,325 thousand in the prior year[24] Integration and Strategic Initiatives - The integration of Tyman is ahead of schedule, with cost synergy targets increased to approximately $45 million[1] - The company is actively pursuing strategic initiatives, including potential acquisitions, to enhance its market position[35] - Future outlook includes continued focus on market expansion and new product development to drive revenue growth[35] Segment Performance - The company reported a decrease in net sales of 5.5% in its North American Fenestration segment for Q2 2025[4] - The North American fenestration segment generated net sales of $151.026 million for the three months ended April 30, 2025, down from $159.774 million in the same period of 2024[42] - The international fenestration segment in the EU reported net sales of $61.257 million for the three months ended April 30, 2025, compared to $56.583 million in the same period of 2024, showing a growth of 3.0%[42] Expenses and Charges - Selling, general and administrative expenses for the three months ended April 30, 2025, totaled $70.333 million, up from $34.707 million in the same period of 2024[39] - The company incurred restructuring charges of $936,000 during the three months ended April 30, 2025, reflecting ongoing operational adjustments[39] - Cost of sales was $321,096 million, leading to a gross margin that supports the overall profitability of the company[35] - Cost of sales for the six months ended April 30, 2025, was $628.824 million, compared to $387.686 million in the same period of 2024, indicating an increase of 62.1%[40] - The company reported a gross margin of $223.698 million for the six months ended April 30, 2025, with a gross margin percentage of 26.2%, compared to $117.670 million and 23.3% in the same period of 2024[40]

Core Insights - Quanex Building Products Corporation reported a significant increase in net sales for the second quarter of 2025, reaching $452.5 million, a 70% increase compared to $266.2 million in the same period of 2024, primarily driven by the Tyman acquisition [2][4] - The integration of Tyman is ahead of schedule, with the company now targeting approximately $45 million in cost synergies, up from the original target of $30 million [2][3] - The company anticipates continued seasonal demand growth through the summer, despite potential macroeconomic challenges [3][8] Financial Performance - Net sales for the six months ended April 30, 2025, were $852.5 million, compared to $505.4 million for the same period in 2024 [2][4] - Gross margin increased to $131.4 million, representing a gross margin percentage of 29.0%, up from 24.9% in the prior year [2][4] - Net income for the second quarter was $20.5 million, compared to $15.4 million in the same quarter of 2024 [2][4] Segment Performance - The North American Fenestration segment experienced a 5.5% decline in net sales, while the European Fenestration segment saw a 7.9% increase in net sales, excluding foreign exchange impacts [4] - The Tyman acquisition contributed $190.1 million to net sales during the second quarter of 2025 [4] Balance Sheet and Liquidity - As of April 30, 2025, total debt stood at $785 million, with a leverage ratio of Net Debt to LTM Adjusted EBITDA decreasing to 3.2x [5][6] - The company had liquidity of $289 million, consisting of $62.6 million in cash and availability under its Senior Secured Revolving Credit Facility [6] Share Repurchase Program - The company repurchased 1,259,407 shares for approximately $23.5 million at an average price of $18.66 per share during the second quarter [7] - Approximately $35.6 million remains under the existing share repurchase authorization [7] Outlook - Quanex reaffirms its guidance for fiscal 2025, estimating net sales of approximately $1.84 billion to $1.86 billion and Adjusted EBITDA of $270 million to $280 million [8]

Core Viewpoint - Quanex Building Products Corporation is actively engaging with institutional investors at the upcoming Wells Fargo Industrials & Materials Conference, indicating a focus on investor relations and potential growth opportunities [1]. Company Overview - Quanex is a global manufacturer with diverse capabilities across various end markets, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry [2]. - The company collaborates with leading OEMs to provide innovative solutions, showcasing its commitment to partnerships and technological advancements [2]. - Looking forward, Quanex aims to leverage its material science expertise and process engineering to expand into adjacent markets, indicating a strategic growth plan [2].

Core Points - Quanex Building Products Corporation plans to release its second quarter 2025 results on June 5, 2025, after market close [1] - A conference call is scheduled for June 6, 2025, at 11:00 a.m. ET to discuss the results, with a live audio webcast available on the company's website [2] - Quanex is a global manufacturer with capabilities across various end markets, focusing on innovative solutions in sectors such as windows, doors, and cabinetry [3] Company Overview - Quanex collaborates with leading OEMs to provide solutions in multiple markets, including solar and refrigeration [3] - The company aims to leverage its material science expertise to expand into adjacent markets in the future [3]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Quanex Building Products (NX) as a strong candidate for value investors due to its favorable valuation metrics [2][4][7] Company Overview - Quanex Building Products (NX) holds a Zacks Rank of 1 (Strong Buy) and has a Value grade of A, indicating it is considered a high-quality value stock [4][7] - The stock has a Forward P/E ratio of 6.74, significantly lower than the industry average of 15.41, suggesting it may be undervalued [4] - NX's Forward P/E has fluctuated between a high of 13.04 and a low of 5.76 over the past 12 months, with a median of 9.96 [4] Valuation Metrics - The P/S ratio for NX is 0.57, compared to the industry's average P/S of 1.6, reinforcing the notion of undervaluation [5] - NX has a P/CF ratio of 9.97, which is lower than the industry average of 12.51, indicating a solid cash outlook [6] - Over the past 52 weeks, NX's P/CF has ranged from a high of 15.86 to a low of 6.94, with a median of 9.10 [6] Investment Outlook - The combination of NX's strong earnings outlook and favorable valuation metrics positions it as an impressive value stock at the moment [7]

Core Viewpoint - Quanex Building Products (NX) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The change in a company's future earnings potential, as indicated by earnings estimate revisions, is strongly correlated with near-term stock price movements [3]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [3]. Company Performance and Outlook - The upgrade for Quanex suggests an improvement in the company's underlying business, which is expected to be reflected in higher stock prices [4]. - For the fiscal year ending October 2025, Quanex is projected to earn $2.55 per share, representing a year-over-year increase of 16.4% [7]. - Over the past three months, the Zacks Consensus Estimate for Quanex has risen by 12.8% [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [8][9].

Financial Performance - Net sales for the three months ended January 31, 2025, increased to $400,044,000, compared to $239,155,000 for the same period in 2024, representing a growth of 67.4%[12] - The company reported a net loss of $14,885,000 for the three months ended January 31, 2025, compared to a net income of $6,249,000 for the same period in 2024[12] - Comprehensive loss for the three months ended January 31, 2025, was $30,836,000, compared to comprehensive income of $12,330,000 for the same period in 2024[14] - Operating loss for the three months ended January 31, 2025, was $6,978,000, compared to an operating income of $7,917,000 for the same period in 2024[12] - Basic and diluted loss per common share for the three months ended January 31, 2025, was $(0.32), while basic earnings per common share for the same period in 2024 was $0.19[112] Assets and Liabilities - Total assets decreased to $2,220,489,000 as of January 31, 2025, down from $2,319,788,000 as of October 31, 2024, reflecting a decline of 4.3%[10] - Cash and cash equivalents decreased to $49,982,000 as of January 31, 2025, from $97,744,000 as of October 31, 2024, a decrease of 48.9%[10] - Total stockholders' equity decreased to $972,116,000 as of January 31, 2025, down from $1,010,746,000 as of October 31, 2024, a decline of 3.8%[10] - Long-term debt as of January 31, 2025, totaled $725,231,000, a decrease from $737,198,000 as of October 31, 2024[64] - The total debt decreased from $762,943,000 as of October 31, 2024, to $751,058,000 as of January 31, 2025[64] Cash Flow - Cash used for operating activities was $12,510,000 for the three months ended January 31, 2025, compared to cash provided of $3,854,000 for the same period in 2024[17] - Cash provided by operating activities decreased by $16.4 million for the three months ended January 31, 2025, compared to the same period in 2024[164] - Cash used for investing activities increased by $1.9 million for the three months ended January 31, 2025, primarily due to increased capital expenditures[165] - Cash used for financing activities increased by $12.9 million for the three months ended January 31, 2025, mainly due to long-term debt repayment and treasury share purchases[166] Segment Performance - The North American Fenestration segment reported sales of $134.3 million, down from $148.0 million, a decrease of 9.2% year-over-year[34] - The Tyman segment generated $175.7 million in sales, with no comparable sales in the prior year due to the acquisition completed on August 1, 2024[34] - The European Fenestration segment experienced a 2% decline in net sales to $48.5 million, attributed to weaker consumer confidence and negative foreign currency impacts[143] - The Tyman segment reported net sales of $175.7 million for the three months ended January 31, 2025, with an operating loss of $13.7 million[150] Expenses - Selling, general and administrative expenses increased by 106% to $66.7 million for the three months ended January 31, 2025, compared to $32.4 million in 2024[139] - The company incurred restructuring charges of $7,904,000 during the three months ended January 31, 2025[12] - Operating lease costs for the three months ended January 31, 2025, were $5,313,000, compared to $2,435,000 for the same period in 2024, reflecting a significant increase[55] Acquisitions and Investments - The acquisition of Tyman plc involved cash consideration of approximately $504.1 million and the issuance of 14,139,477 new Quanex common shares[39] - As of January 31, 2025, the preliminary purchase price allocation for the Tyman acquisition indicated net assets acquired valued at $848.6 million[44] - The company continues to evaluate business acquisitions to expand its manufacturing and distribution footprint and enhance product offerings[127] Credit Facilities and Debt - The Revolving Credit Facility was increased to an aggregate principal amount of $475 million as part of the amended credit agreement related to the Tyman acquisition[41] - The Amended Credit Agreement increased the senior secured revolving credit facility to an aggregate principal amount of $475 million and provides for a senior secured term loan A facility of $500 million[66] - As of January 31, 2025, the company had $705 million borrowings outstanding under the Facilities, with a weighted-average borrowing rate of 6.85% for the three months ended January 31, 2025[73] Stock and Shareholder Information - The company paid cash dividends of $3,812,000 during the three months ended January 31, 2025, maintaining a dividend of $0.08 per share[12] - The company had a beginning treasury stock balance of 4,014,431 shares as of November 1, 2024, which decreased to 3,983,606 shares by January 31, 2025[103] - During the three months ended January 31, 2025, the company repurchased 150,000 shares of common stock at an average price of $24.66, with $59,108,618 remaining under the stock repurchase program[194] Tax and Regulatory Matters - The estimated annual effective tax rates from continuing operations for the three months ended January 31, 2025 and 2024 were 25.3% and 20.8%, respectively[75] - The company recorded an income tax benefit of $5.1 million on a pre-tax loss of $19.9 million for the three months ended January 31, 2025, resulting in an effective tax rate of 25.3%[155] Internal Controls and Compliance - Tyman plc has been excluded from the management's assessment of internal controls over financial reporting as of January 31, 2025, due to its prior public listing and compliance with International Financial Reporting Standards[186] - The company is actively engaged in remediation efforts to address a material weakness related to the statement of cash flows, which includes enhanced review procedures and a structured non-cash transaction checklist[187][191] - Integration of internal controls for the recently acquired Tyman business is ongoing, with completion expected during fiscal 2025[189] Market and Economic Conditions - The company is monitoring the impacts of geopolitical tensions and global trade policies on its operations and supply chain[129] - The NAHB forecasted housing starts to be approximately 1.3 million in 2025, with a projected decrease of 2.5% in total window shipments for the same year[135]

Financial Data and Key Metrics Changes - The company reported net sales of $400 million for Q1 2025, a 67% increase from $239.2 million in Q1 2024, primarily driven by the Timon acquisition [16] - A net loss of $14.9 million or $0.32 per diluted share was reported for Q1 2025, compared to a net income of $6.2 million or $0.19 per diluted share in Q1 2024 [17] - Adjusted EBITDA for Q1 2025 was $38.5 million, nearly doubling from $19.3 million in the same period last year, with an adjusted EBITDA margin expansion of approximately 150 basis points year-over-year [19] Business Line Data and Key Metrics Changes - North American Fenestration segment net sales were $134.3 million, a decrease of 9.2% from $148 million in Q1 2024, with estimated volume decline of 8% [20] - European Fenestration segment generated revenue of $48.5 million, a 2% decrease from $49.4 million in Q1 2024, with adjusted EBITDA slightly declining to $9.9 million [21][22] - North American Cabinet Components segment reported net sales of $43.8 million, with a 3% volume decline and a 5% price increase [23] - Timon business reported net sales of $175.7 million for Q1 2025, with an adjusted EBITDA of $19 million, reflecting margin expansion due to cost synergies [25] Market Data and Key Metrics Changes - The company experienced a typical seasonal order cadence with a softer Q1 due to holidays and weather, alongside demand impacted by uncertainties regarding Fed interest rate movements and potential tariffs [10][12] - Customer conversations indicated a general sentiment of caution regarding new projects, influenced by macroeconomic uncertainties [11][70] Company Strategy and Development Direction - The company is focused on integrating Timon and achieving $30 million in run rate synergies by the end of year two, with plans to resegment the business into Hardware Solutions, Extruded Solutions, and Custom Solutions [7][8] - The operational focus will remain on safety culture, employee engagement, working capital improvements, and optimizing return on net assets to maximize cash flow generation [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year earnings guidance despite short-term market headwinds, citing the anticipated benefits of the Timon acquisition [14][42] - The company reaffirmed net sales guidance of approximately $1.84 to $1.86 billion and adjusted EBITDA guidance of $270 million to $280 million for fiscal 2025 [30] Other Important Information - Cash used for operating activities was $12.5 million for Q1 2025, compared to cash provided of $3.8 million in Q1 2024, impacted by the Timon acquisition [26] - The company has repaid $65 million of the $770 million borrowed for the Timon acquisition, with a leverage ratio of 2.2 times as of January 31, 2025 [27][28] Q&A Session Summary Question: Can you discuss the expected margin progress for the rest of the year? - Management indicated that gross margin should improve significantly for the rest of the year due to the PPA step-up related to the acquisition [35] Question: What factors contributed to the divergence in growth rates between the cabinets and fenestration businesses? - Management noted that weather had a significant impact, particularly in the window and door market, affecting demand [38] Question: How confident is the company in its full-year guidance? - Management expressed confidence in their projections, stating that they have a realistic view of the year and anticipate improvements in the back half [42] Question: Which segments are expected to drive improvement in the second half? - Management highlighted that the window and door segment is expected to see more seasonality, with the Timon business likely to contribute positively [50] Question: How does the company prioritize capital deployment between stock repurchase and debt repayment? - Management indicated that stock repurchase is currently a priority given market conditions, with ongoing evaluation of cash flow [55] Question: Which segment might be most impacted by tariffs? - Management suggested that the hardware business would likely be more directly impacted due to metal purchases, but they have protections in place [66] Question: What is the macro outlook based on customer conversations? - Management noted that customers are cautious due to uncertainties around tariffs and Fed actions, impacting consumer confidence [70]

Financial Performance - Quanex reported net sales of $400.0 million for Q1 2025, a 67.3% increase from $239.2 million in Q1 2024, primarily due to the Tyman acquisition[3] - The company incurred a net loss of $14.9 million in Q1 2025, compared to a net income of $6.2 million in Q1 2024, resulting in a diluted EPS of ($0.32)[2] - Net income for the three months ended January 31, 2025, was $6,249 thousand, compared to a net loss of $14,885 thousand for the same period in 2024[23] - The company reported a net loss of $14,885 thousand for the three months ended January 31, 2025, compared to a net income of $23,847 thousand in the same period last year[44] - EBITDA for the three months ended January 31, 2025, was $17,762 thousand, a decrease from $19,069 thousand in the prior year[44] - Adjusted EBITDA for Q1 2025 was $38.5 million, with an adjusted EBITDA margin of 9.6%, compared to $19.3 million and 8.1% in Q1 2024[2] - Adjusted EBITDA for the same period was $38,542 thousand, with an adjusted EBITDA margin of 9.6%[40] Debt and Liquidity - Quanex has repaid approximately $65 million of debt since the Tyman acquisition, with total debt standing at $764.3 million as of January 31, 2025[5] - The leverage ratio of net debt to LTM adjusted EBITDA improved slightly to 3.6x as of January 31, 2025[5] - Total debt increased significantly from $65,211 thousand in January 2024 to $764,306 thousand in January 2025, reflecting a substantial rise in leverage[28] - Net Debt as of January 31, 2025, was $714,324 thousand, compared to $20,789 thousand in January 2024, indicating a significant increase in financial obligations[28] - Quanex's liquidity was reported at $301.5 million, consisting of $50.0 million in cash and available credit[6] Sales and Revenue Segments - The North American Fenestration segment experienced a 9.2% decrease in net sales, while the North American Cabinet Components segment saw a 1.6% increase[4] - The company experienced a decrease in revenue from the NA Fenestration segment, with sales dropping from $147,995 thousand in 2024 to $134,333 thousand in 2025[43] - Net sales for the three months ended January 31, 2025, were $400,044 thousand, a significant increase of 67.3% compared to $239,155 thousand for the same period in 2024[44] Expenses and Cash Flow - Selling, general and administrative expenses increased to $66,650 thousand from $32,363 thousand year-over-year, reflecting a rise of 106.5%[44] - Free Cash Flow for the three months ended January 31, 2025, was $(24,134) thousand, a decrease from $(5,726) thousand in 2024[26] - Interest expense for the three months ended January 31, 2025, was $14,186 thousand, compared to $1,068 thousand in the same period last year[44] Capital Expenditures and Assets - Capital expenditures for the three months ended January 31, 2025, were $11,624 thousand, up from $9,580 thousand in the same period of 2024[24] - Total current assets decreased from $611,268 thousand to $547,621 thousand, a decline of approximately 10.4%[21] - Cash and cash equivalents at the end of the period were $55,468 thousand, a decrease from $102,995 thousand at the beginning of the period[24] - The company reported a decrease in accounts receivable by $30,330 thousand for the three months ended January 31, 2025, compared to a decrease of $18,147 thousand in 2024[24] Shareholder Returns - The company paid common stock dividends of $3,812 thousand during the three months ended January 31, 2025, compared to $2,645 thousand in 2024, reflecting an increase in shareholder returns[24] - The company repurchased 150,000 shares for approximately $3.7 million at an average price of $24.66 per share during Q1 2025[7] Tax and Restructuring - The company reported a tax benefit of $5,050 thousand for the three months ended January 31, 2025, compared to an expense of $1,642 thousand in the prior year[44] - The company incurred restructuring charges of $7,904 thousand related to severance and disposal of software during the three months ended January 31, 2025[41] Gross Margin - Gross margin improved to $92.3 million, representing a gross margin percentage of 23.1%, up from 21.5% in the previous year[2] - Gross margin for the same period was $92,316 thousand, representing a gross margin percentage of 23.1%, compared to $51,432 thousand and 21.5% in the prior year[40]

Margin Expansion Realized on Consolidated BasisResults Lifted by Contribution from Tyman AcquisitionRealization of Cost Synergies from Tyman Acquisition Progressing Well$65 Million of Debt Repaid Since Closing Tyman Acquisition HOUSTON, March 10, 2025 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended January 31, 2025. The Company reported the following selected financial results: Three Months Ended January ...