Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Quanex Building Products Corporation and its officers or directors, following disappointing financial results that led to a significant drop in stock price [1][3]. Financial Performance - On September 4, 2025, Quanex reported non-GAAP earnings per share of $0.69 for Q3 2025, which was $0.15 below consensus estimates [3]. - The company's stock price fell by $2.73, or 13.06%, closing at $18.18 per share on September 5, 2025, in response to the earnings miss [3]. Challenges Faced - The CEO of Quanex highlighted several challenges, including the need to re-segment the business, macroeconomic uncertainty, low consumer confidence, and operational issues related to the legacy Tyman window and door hardware business in Mexico [3].

Core Viewpoint - The Portnoy Law Firm has initiated an investigation into possible securities fraud involving Quanex Building Products Corporation, potentially leading to a class action lawsuit for investors who have incurred losses [1][3]. Group 1: Investigation Details - The investigation is centered on whether Quanex and its board of directors violated federal securities laws and breached fiduciary duties to shareholders by failing to secure the best possible consideration for shareholders and not disclosing all material information necessary for proper assessment of the proposed merger [3]. Group 2: Investor Actions - Investors who have lost money on their investment in Quanex are encouraged to contact attorney Lesley F. Portnoy for a complimentary case evaluation and to discuss their legal rights [2][4].

PART I. FINANCIAL INFORMATION [Item 1: Financial Statements (Unaudited)](index=4&type=section&id=Item%201%3A%20Financial%20Statements%20(Unaudited)) Presents unaudited condensed consolidated financial statements and notes for periods ended July 31, 2025, and October 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's financial position, including assets, liabilities, and equity, at specific reporting dates **Condensed Consolidated Balance Sheets (in thousands):** | Item | July 31, 2025 | October 31, 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :-------------- | :--------------- | :---------- | :--------- | | Cash and cash equivalents | $66,272 | $97,744 | $(31,472) | -32.2% | | Total current assets | $583,324 | $611,268 | $(27,944) | -4.6% | | Goodwill | $271,459 | $574,711 | $(303,252) | -52.8% | | Intangible assets, net | $558,768 | $597,909 | $(39,141) | -6.5% | | **Total assets** | **$1,972,677** | **$2,319,788** | **$(347,111)** | **-15.0%** | | Total current liabilities | $264,693 | $272,867 | $(8,174) | -3.0% | | Long-term debt | $695,605 | $737,198 | $(41,593) | -5.6% | | Total liabilities | $1,255,286 | $1,309,042 | $(53,756) | -4.1% | | Retained earnings | $148,795 | $430,405 | $(281,610) | -65.4% | | **Total stockholders' equity** | **$717,391** | **$1,010,746** | **$(293,355)** | **-29.0%** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Summarizes the company's revenues, expenses, and net income or loss over specific reporting periods **Condensed Consolidated Statements of Income (in thousands, except per share amounts):** | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net sales | $495,273 | $280,345 | $1,347,795 | $785,701 | | Cost of sales (excluding D&A) | $357,305 | $209,441 | $986,129 | $597,127 | | Selling, general and administrative | $71,270 | $36,509 | $208,253 | $103,579 | | Restructuring charges | $1,367 | $0 | $10,207 | $0 | | Depreciation and amortization | $33,882 | $10,953 | $77,814 | $32,999 | | Asset impairment charges | $302,284 | $0 | $302,284 | $0 | | Operating (loss) income | $(270,835) | $23,442 | $(236,892) | $51,996 | | Interest expense | $(14,218) | $(878) | $(42,344) | $(2,896) | | Other, net | $855 | $9,474 | $1,925 | $10,520 | | (Loss) income before income taxes | $(284,198) | $32,038 | $(277,311) | $59,620 | | Income tax benefit (expense) | $8,191 | $(6,688) | $6,934 | $(12,644) | | **Net (loss) income** | **$(276,007)** | **$25,350** | **$(270,377)** | **$46,976** | | (Loss) earnings per common share (Basic & Diluted) | $(6.04) | $0.77 | $(5.83) | $1.43 (Basic), $1.42 (Diluted) | | Cash dividends per share | $0.08 | $0.08 | $0.24 | $0.24 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents the total comprehensive income, including net income and other comprehensive income items, for the reporting periods **Condensed Consolidated Statements of Comprehensive Income (in thousands):** | Item | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net (loss) income | $(276,007) | $25,350 | $(270,377) | $46,976 | | Foreign currency translation (loss) gain, net of tax | $(3,467) | $4,500 | $15,927 | $8,010 | | Other comprehensive (loss) income, net of tax | $(3,467) | $4,500 | $15,927 | $8,010 | | **Comprehensive (loss) income** | **$(279,474)** | **$29,850** | **$(254,450)** | **$54,986** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines the cash inflows and outflows from operating, investing, and financing activities for the reporting periods **Condensed Consolidated Statements of Cash Flows (Nine Months Ended July 31, in thousands):** | Activity | 2025 | 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :------- | :------- | :---------- | :--------- | | Cash provided by operating activities | $76,643 | $83,333 | $(6,690) | -8.0% | | Cash used for investing activities | $(40,635) | $(23,320) | $(17,315) | 74.2% | | Cash used for financing activities | $(87,379) | $(25,456) | $(61,923) | 243.2% | | Effect of exchange rate changes on cash, cash equivalents and restricted cash | $16,302 | $935 | $15,367 | 1643.5% | | (Decrease) increase in cash, cash equivalents and restricted cash | $(35,069) | $35,492 | $(70,561) | -198.8% | | Cash, cash equivalents and restricted cash at end of period | $67,926 | $93,966 | $(26,040) | -27.7% | [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) Details changes in the company's equity accounts, including common stock, retained earnings, and treasury stock, over the reporting period **Condensed Consolidated Statement of Stockholders' Equity (Nine Months Ended July 31, 2025, in thousands):** | Item | October 31, 2024 Balance | Net Loss | Foreign Currency Translation Adjustment | Common Dividends | Purchase of Treasury Stock | Stock-Based Compensation Activity | July 31, 2025 Balance | | :------------------------------------------ | :----------------------- | :--------- | :-------------------------------------- | :--------------- | :------------------------- | :-------------------------------- | :---------------------- | | Common Stock | $513 | — | — | — | — | $(1) | $512 | | Additional Paid-in Capital | $701,008 | — | — | — | — | $(1,902) | $699,106 | | Retained Earnings | $430,405 | $(270,377) | — | $(11,233) | — | — | $148,795 | | Accumulated Other Comprehensive Loss | $(46,428) | — | $15,927 | — | — | — | $(30,501) | | Treasury Stock | $(74,752) | — | — | — | $(29,248) | $3,479 | $(100,521) | | **Total Stockholders' Equity** | **$1,010,746** | **$(270,377)** | **$15,927** | **$(11,233)** | **$(29,248)** | **$1,576** | **$717,391** | - Total stockholders' equity decreased by **$293,355K** from October 31, 2024, to July 31, 2025, primarily due to a net loss of **$(270,377)K** and treasury stock purchases of **$(29,248)K**, partially offset by foreign currency translation adjustments of **$15,927K**[18](index=18&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Nature of Operations and Basis of Presentation](index=10&type=section&id=1.%20Nature%20of%20Operations%20and%20Basis%20of%20Presentation) Describes the company's business, operating segments, and the accounting principles used in preparing the financial statements - Quanex Building Products Corporation is a leading manufacturer and component supplier to OEMs in various industries, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets[21](index=21&type=chunk) - The company operates through three reportable business segments: Hardware Solutions, Extruded Solutions, and Custom Solutions[21](index=21&type=chunk) - The accompanying interim unaudited condensed consolidated financial statements are prepared pursuant to SEC rules and U.S. GAAP, with certain information condensed or omitted[23](index=23&type=chunk) - Revenue from product sales is recognized at a point in time when control is transferred to the customer, generally upon shipment[27](index=27&type=chunk) **Net Sales by Segment (Three Months Ended July 31, in thousands):** | Segment | 2025 | 2024 | Change ($K) | Change (%) | | :-------------------- | :----- | :----- | :---------- | :--------- | | Hardware Solutions | $227,116 | $75,460 | $151,656 | 201% | | Extruded Solutions | $174,427 | $134,552 | $39,875 | 30% | | Custom Solutions | $102,264 | $72,667 | $29,597 | 41% | | Unallocated Corporate & Other (Eliminations) | $(8,534) | $(2,334) | $(6,200) | 266% | | **Total Net Sales** | **$495,273** | **$280,345** | **$214,928** | **77%** | **Net Sales by Segment (Nine Months Ended July 31, in thousands):** | Segment | 2025 | 2024 | Change ($K) | Change (%) | | :-------------------- | :----------- | :--------- | :---------- | :--------- | | Hardware Solutions | $614,791 | $204,127 | $410,664 | 201% | | Extruded Solutions | $478,024 | $379,860 | $98,164 | 26% | | Custom Solutions | $284,809 | $208,201 | $76,608 | 37% | | Unallocated Corporate & Other (Eliminations) | $(29,829) | $(6,487) | $(23,342) | 360% | | **Total Net Sales** | **$1,347,795** | **$785,701** | **$562,094** | **72%** | - Restructured reportable operating segments during the three months ended July 31, 2025, to integrate the acquisition of Tyman plc[38](index=38&type=chunk) - Incurred **$1.4 million** (3 months) and **$10.2 million** (9 months) in restructuring charges, primarily for workforce alignment costs[38](index=38&type=chunk) - A goodwill impairment test, triggered by the restructuring, resulted in an asset impairment of **$302.3 million** during the three months ended July 31, 2025[39](index=39&type=chunk) [2. Acquisition](index=13&type=section&id=2.%20Acquisition) Details the acquisition of Tyman plc, including the purchase price allocation and pro forma financial impacts - Completed the acquisition of Tyman plc on August 1, 2024, for **14,139,477** newly issued Quanex common shares and approximately **$504.1 million** in cash[40](index=40&type=chunk) - An Amended Credit Agreement became effective on August 1, 2024, increasing the senior secured revolving credit facility to **$475 million** and providing a **$500 million** senior secured term loan A facility[41](index=41&type=chunk)[42](index=42&type=chunk) - Measurement period adjustments resulted in a **$4.1 million** reduction in the preliminary goodwill initially recognized for the Tyman acquisition[44](index=44&type=chunk) **Final Purchase Price Allocation for Tyman Acquisition (in thousands):** | Net assets acquired | Final Purchase Price Allocation | | :-------------------------- | :---------------------------- | | Accounts receivable | $99,574 | | Inventories | $211,331 | | Prepaid and other assets | $19,762 | | Property, plant and equipment | $157,851 | | Operating lease right-of-use assets | $65,414 | | Goodwill | $380,941 | | Intangible assets | $539,285 | | Accounts payable | $(67,364) | | Accrued liabilities | $(41,958) | | Long-term debt | $(300,684) | | Operating lease liabilities | $(66,228) | | Deferred income taxes | $(138,808) | | Other liabilities | $(10,502) | | **Net assets acquired** | **$848,614** | **Pro Forma Results (Nine Months Ended July 31, 2024, in thousands, except per share amounts):** | Metric | Pro Forma | Reported | | :-------------------- | :---------- | :--------- | | Net sales | $1,395,632 | $785,701 | | Net income | $48,846 | $46,976 | | Basic earnings per share | $1.04 | $1.43 | | Diluted earnings per share | $1.03 | $1.42 | [3. Inventories](index=15&type=section&id=3.%20Inventories) Provides a breakdown of inventory components, including raw materials, finished goods, and work in process **Inventories (in thousands):** | Category | July 31, 2025 | October 31, 2024 | Change ($K) | Change (%) | | :---------------------- | :-------------- | :--------------- | :---------- | :--------- | | Raw materials | $88,257 | $81,330 | $6,927 | 8.5% | | Finished goods and work in process | $181,374 | $192,448 | $(11,074) | -5.8% | | Supplies and other | $2,591 | $1,772 | $819 | 46.2% | | **Total** | **$272,222** | **$275,550** | **$(3,328)** | **-1.2%** | [4. Leases](index=15&type=section&id=4.%20Leases) Outlines the company's lease accounting policies, including right-of-use assets, lease liabilities, and lease costs - The company recognizes right-of-use (ROU) assets and lease liabilities for operating and finance leases with contractual terms greater than 12 months[51](index=51&type=chunk) **Lease-Related Assets and Liabilities (in thousands):** | Category | July 31, 2025 | October 31, 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :-------------- | :--------------- | :---------- | :--------- | | Operating lease right-of-use assets | $147,829 | $126,715 | $21,114 | 16.7% | | Finance lease assets | $71,521 | $67,046 | $4,475 | 6.7% | | **Total lease assets** | **$219,350** | **$193,761** | **$25,589** | **13.2%** | | Current operating lease liabilities | $15,243 | $12,475 | $2,768 | 22.2% | | Current maturities of long-term debt (Finance) | $4,257 | $3,688 | $569 | 15.4% | | Noncurrent operating lease liabilities | $138,246 | $117,560 | $20,686 | 17.6% | | Long-term debt (Finance) | $56,769 | $56,988 | $(219) | -0.4% | | **Total lease liabilities** | **$214,515** | **$190,711** | **$23,804** | **12.5%** | **Components of Lease Costs (Three Months Ended July 31, in thousands):** | Category | 2025 | 2024 | Change ($K) | Change (%) | | :---------------------- | :----- | :----- | :---------- | :--------- | | Operating lease cost | $8,112 | $3,722 | $4,390 | 118% | | Finance lease cost (Amortization) | $1,697 | $1,237 | $460 | 37.2% | | Finance lease cost (Interest) | $992 | $839 | $153 | 18.2% | | Variable lease costs | $899 | $523 | $376 | 71.9% | | **Total lease cost** | **$11,700** | **$6,321** | **$5,379** | **85.1%** | - Weighted-average remaining lease term for operating leases is **11.5 years** (both 2025 and 2024), and for financing leases is **15.4 years** (2025) vs **16.3 years** (2024)[57](index=57&type=chunk) - Weighted-average discount rate for operating leases increased to **5.56%** (2025) from **5.31%** (2024), and for financing leases to **4.90%** (2025) from **4.84%** (2024)[57](index=57&type=chunk) [5. Property, Plant and Equipment](index=18&type=section&id=5.%20Property%2C%20Plant%20and%20Equipment) Details the net carrying amount of property, plant, and equipment, along with depreciation and impairment information **Property, Plant and Equipment, Net (in thousands):** | Category | July 31, 2025 | October 31, 2024 | Change ($K) | Change (%) | | :-------------------------- | :-------------- | :--------------- | :---------- | :--------- | | Property, plant and equipment, net | $405,510 | $402,466 | $3,044 | 0.8% | - Depreciation expense for the three months ended July 31, 2025, was **$21.6 million**, up from **$8.1 million** in the prior year[58](index=58&type=chunk) - For the nine months, it was **$48.2 million**, up from **$24.0 million**[58](index=58&type=chunk) - A one-time depreciation charge of **$7.3 million** was recorded during the three months ended July 31, 2025, due to push-down accounting related to the Tyman acquisition[58](index=58&type=chunk) - No impairment charges related to property, plant and equipment or intangible assets were recorded for the periods ended July 31, 2025, and October 31, 2024[60](index=60&type=chunk)[67](index=67&type=chunk) [6. Goodwill and Intangible Assets](index=18&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) Provides information on goodwill carrying amounts, impairment charges, and amortizable intangible assets **Goodwill Carrying Amount (Nine Months Ended July 31, 2025, in thousands):** | Item | Amount | | :-------------------------- | :------- | | Beginning balance as of November 1, 2024 | $574,711 | | Measurement period adjustments | $(3,989) | | Goodwill impairment charge | $(302,284) | | Foreign currency translation adjustment | $3,021 | | **Balance as of July 31, 2025** | **$271,459** | - A non-cash goodwill impairment charge of **$302.3 million** was recognized during the three months ended July 31, 2025, due to a prolonged decline in market price and high industry uncertainty[63](index=63&type=chunk)[64](index=64&type=chunk) - The impairment charge affected Hardware Solutions (**$163.2 million**), Extruded Solutions (**$54.9 million**), and Custom Solutions (**$84.2 million**)[119](index=119&type=chunk) **Amortizable Intangible Assets (in thousands):** | Category | July 31, 2025 Gross Carrying Amount | July 31, 2025 Accumulated Amortization | October 31, 2024 Gross Carrying Amount | October 31, 2024 Accumulated Amortization | | :-------------------------- | :---------------------------------- | :------------------------------------- | :----------------------------------- | :-------------------------------------- | | Customer relationships | $506,524 | $134,838 | $512,131 | $112,748 | | Trademarks and trade names | $240,667 | $56,947 | $243,434 | $47,685 | | Patents and other technology | $26,050 | $22,688 | $25,164 | $22,387 | | **Total** | **$773,241** | **$214,473** | **$780,729** | **$182,820** | - Amortization expense for intangible assets was **$12.3 million** (3 months) and **$29.4 million** (9 months) for 2025, significantly higher than **$2.8 million** and **$9.0 million** in 2024[66](index=66&type=chunk) [7. Debt and Finance Lease Obligations](index=20&type=section&id=7.%20Debt%20and%20Finance%20Lease%20Obligations) Details the company's long-term debt, finance lease obligations, and compliance with debt covenants **Long-term Debt (in thousands):** | Category | July 31, 2025 | October 31, 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :-------------- | :--------------- | :---------- | :--------- | | Term Loan A Facility | $475,000 | $493,750 | $(18,750) | -3.8% | | Revolving Credit Facility | $197,500 | $222,500 | $(25,000) | -11.2% | | Finance lease obligations and other | $61,194 | $60,676 | $518 | 0.9% | | Unamortized deferred financing fees | $(11,776) | $(13,983) | $2,207 | -15.8% | | **Total debt** | **$721,918** | **$762,943** | **$(41,025)** | **-5.4%** | | Less: Current maturities of long-term debt | $26,313 | $25,745 | $568 | 2.2% | | **Long-term debt (non-current)** | **$695,605** | **$737,198** | **$(41,593)** | **-5.6%** | - The Amended Credit Agreement, effective August 1, 2024, increased the Revolving Credit Facility to **$475 million** and established a **$500 million** Term Loan A Facility, both maturing on August 1, 2029[70](index=70&type=chunk) - As of July 31, 2025, **$672.5 million** in borrowings were outstanding under the Facilities, accruing interest at **6.96%** per annum, with **$271.4 million** available for use[77](index=77&type=chunk) - The weighted-average borrowing rate for the nine months ended July 31, 2025, was **6.81%**, up from **6.69%** in the prior year[77](index=77&type=chunk) - The company was in compliance with its debt covenants as of July 31, 2025[77](index=77&type=chunk) [8. Retirement Plans](index=21&type=section&id=8.%20Retirement%20Plans) Reports on the company's retirement plan liabilities, specifically the non-qualified deferred compensation plan - The liability associated with the non-qualified deferred compensation plan decreased to approximately **$4.1 million** as of July 31, 2025, from **$4.7 million** as of October 31, 2024[78](index=78&type=chunk) [9. Income Taxes](index=21&type=section&id=9.%20Income%20Taxes) Discusses the company's income tax benefit/expense, effective tax rate, and valuation allowances - The estimated annual effective income tax rate for the nine months ended July 31, 2025, was **2.5%**, a significant decrease from **21.2%** in 2024[79](index=79&type=chunk) - The primary discrete item affecting the 2025 effective rate was a **$10.8 million** benefit related to the goodwill impairment[79](index=79&type=chunk) - The company maintains valuation allowances for certain state net operating losses (**$0.2 million**) and capital losses (**$3.5 million**) as of July 31, 2025[80](index=80&type=chunk) [10. Contingencies](index=22&type=section&id=10.%20Contingencies) Outlines potential liabilities from environmental matters and legal claims, assessing their financial impact - The company is not currently involved in any material environmental remediation matters and does not expect to incur material expenses or capital expenditures related to environmental matters in fiscal 2025[82](index=82&type=chunk)[83](index=83&type=chunk) - The company is party to multiple claims related to alleged defects in a commercial sealant product from the 2000s but believes the eventual outcome will not have a material adverse effect on its financial condition, results of operations, or cash flows[85](index=85&type=chunk) [11. Fair Value Measurement of Assets and Liabilities](index=22&type=section&id=11.%20Fair%20Value%20Measurement%20of%20Assets%20and%20Liabilities) Explains how fair values are determined for various financial instruments and assets, including derivatives - Carrying amounts for cash, cash equivalents, accounts receivable, accounts payable, and variable rate debt approximate fair value due to their short-term maturity or frequent re-pricing[87](index=87&type=chunk) - Recognized a net gain of **$0.3 million** from forward foreign exchange contracts during the nine months ended July 31, 2025, with no outstanding contracts as of that date[89](index=89&type=chunk) - Subscribed to BOPREAL bonds, resulting in approximately **$2.6 million** in USD proceeds during the three months ended July 31, 2025, with no outstanding bonds as of that date[90](index=90&type=chunk) [12. Stock-Based Compensation](index=23&type=section&id=12.%20Stock-Based%20Compensation) Details the stock-based compensation expense, restricted stock awards, and treasury share repurchases **Total Stock-Based Compensation Expense (in thousands):** | Period | 2025 | 2024 | Change ($K) | Change (%) | | :-------------------------- | :----- | :----- | :---------- | :--------- | | Three Months Ended July 31 | $1,800 | $1,277 | $523 | 41.0% | | Nine Months Ended July 31 | $3,556 | $5,346 | $(1,790) | -33.5% | - Restricted stock awards granted during the nine months ended July 31, 2025, totaled **107,682 shares** with a weighted-average grant date fair value of **$29.19** per share[94](index=94&type=chunk) - As of July 31, 2025, total unrecognized compensation cost for unamortized restricted stock awards was **$3.7 million**, expected to be recognized over a weighted-average vesting period of **2.0 years**[94](index=94&type=chunk) - The company repurchased **1,509,407 treasury shares** during the nine months ended July 31, 2025[109](index=109&type=chunk) [13. Other, net](index=26&type=section&id=13.%20Other%2C%20net) Summarizes various non-operating income and expense items, including foreign currency impacts and interest income **Other, net (in thousands):** | Category | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Nine Months Ended July 31, 2025 | Nine Months Ended July 31, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Foreign currency transaction gains (losses) | $949 | $(38) | $118 | $(94) | | Foreign currency derivative gains (losses) | $(546) | $9,200 | $289 | $9,200 | | Pension service (costs) benefit | $(50) | $0 | $(39) | $903 | | Interest income | $591 | $300 | $1,678 | $772 | | Other | $(89) | $12 | $(121) | $(261) | | **Total Other, net** | **$855** | **$9,474** | **$1,925** | **$10,520** | [14. Segment Information](index=27&type=section&id=14.%20Segment%20Information) Provides financial data by reportable segment, including net sales and operating income, reflecting recent restructuring - During the third quarter of 2025, the company restructured its reportable segments from four to three: Hardware Solutions, Extruded Solutions, and Custom Solutions, with prior period amounts recast[111](index=111&type=chunk)[112](index=112&type=chunk) **Operating (Loss) Income by Segment (Three Months Ended July 31, in thousands):** | Segment | 2025 | 2024 | Change ($K) | Change (%) | | :-------------------- | :--------- | :--------- | :---------- | :--------- | | Hardware Solutions | $(157,445) | $8,237 | $(165,682) | -2011% | | Extruded Solutions | $(24,867) | $20,654 | $(45,521) | -220% | | Custom Solutions | $(76,093) | $1,924 | $(78,017) | -4055% | | Unallocated Corporate & Other | $(12,430) | $(7,373) | $(5,057) | 69% | | **Total Operating (Loss) Income** | **$(270,835)** | **$23,442** | **$(294,277)** | **-1255%** | **Operating (Loss) Income by Segment (Nine Months Ended July 31, in thousands):** | Segment | 2025 | 2024 | Change ($K) | Change (%) | | :-------------------- | :--------- | :--------- | :---------- | :--------- | | Hardware Solutions | $(160,550) | $15,940 | $(176,490) | -1107% | | Extruded Solutions | $14,155 | $54,404 | $(40,249) | -74% | | Custom Solutions | $(68,973) | $1,695 | $(70,668) | -4169% | | Unallocated Corporate & Other | $(21,524) | $(20,043) | $(1,481) | 7% | | **Total Operating (Loss) Income** | **$(236,892)** | **$51,996** | **$(288,888)** | **-556%** | - Goodwill impairment losses totaling **$302.3 million** were recognized, with **$163.2 million** pertaining to Hardware Solutions, **$54.9 million** to Extruded Solutions, and **$84.2 million** to Custom Solutions[119](index=119&type=chunk) [15. Earnings Per Share](index=31&type=section&id=15.%20Earnings%20Per%20Share) Presents basic and diluted earnings per common share, along with weighted-average shares outstanding **Earnings Per Common Share:** | Period | 2025 (Basic & Diluted) | 2024 (Basic) | 2024 (Diluted) | | :-------------------------- | :----------------------- | :------------- | :------------- | | Three Months Ended July 31 | $(6.04) | $0.77 | $0.77 | | Nine Months Ended July 31 | $(5.83) | $1.43 | $1.42 | - Weighted-average common shares outstanding (basic) for the nine months ended July 31, 2025, increased to **46,395 thousand** from **32,857 thousand** in 2024[122](index=122&type=chunk) - Anti-dilutive restricted stock award equivalents for the three and nine months ended July 31, 2025, were **37,142** and **21,538**, respectively[122](index=122&type=chunk) [16. New Accounting Guidance](index=32&type=section&id=16.%20New%20Accounting%20Guidance) Discusses recently issued accounting pronouncements and their potential impact on the company's financial statements - The company did not adopt any new accounting pronouncements during the three and nine months ended July 31, 2025[123](index=123&type=chunk) - The company is currently evaluating the potential impact of new FASB guidance on 'Expense Disaggregation Disclosures' (effective after Dec 15, 2026), 'Improvements to Income Tax Disclosures' (effective after Dec 15, 2024), and 'Improvements to Reportable Segment Disclosures' (effective after Dec 15, 2023)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on financial performance, condition, and outlook, including impacts of acquisitions, restructuring, and market dynamics [Our Business](index=35&type=section&id=Our%20Business) Describes the company's core operations, market position, and strategic objectives for growth - Quanex is a leading manufacturer and component supplier to OEMs in window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets[134](index=134&type=chunk) - The business is organized into three reportable segments: Hardware Solutions, Extruded Solutions, and Custom Solutions, following a recent restructuring[134](index=134&type=chunk)[136](index=136&type=chunk) - The company aims to invest in organic growth and evaluate strategic acquisitions to expand its footprint, product offerings, and market leadership[135](index=135&type=chunk) [Recent Transactions and Events](index=35&type=section&id=Recent%20Transactions%20and%20Events) Highlights significant corporate activities, including segment restructuring, acquisitions, and geopolitical monitoring - A restructuring of reportable operating segments during the three months ended July 31, 2025, triggered a **$302.3 million** goodwill impairment charge[137](index=137&type=chunk) - The acquisition of Tyman plc was completed on August 1, 2024, involving **14,139,477** new Quanex shares and approximately **$504.1 million** in cash[139](index=139&type=chunk) - The company is monitoring geopolitical tensions and military conflicts (e.g., Ukraine and Gaza) for potential impacts on commodity prices, supply chains, and product demand[140](index=140&type=chunk)[141](index=141&type=chunk) [Market Overview and Outlook](index=36&type=section&id=Market%20Overview%20and%20Outlook) Analyzes key market drivers, industry forecasts, and commodity price trends affecting the company's operations - North American residential remodeling and replacement (R&R) and new home construction activity are the primary drivers of operating results[142](index=142&type=chunk) - NAHB forecasted calendar-year housing starts to be approximately **1.4 million** for 2025, 2026, and 2027[143](index=143&type=chunk) - Ducker forecast indicates total window shipments are expected to decrease **4.3%** in 2025 and **1.5%** in 2026[143](index=143&type=chunk) - Commodities like PVC, titanium dioxide, petroleum products, stainless steel, zinc, aluminum, and wood are subject to pricing fluctuations, with price adjusters in place for most customers to mitigate long-term exposure[144](index=144&type=chunk) [Results of Operations (Three Months Ended July 31, 2025 Compared to Three Months Ended July 31, 2024)](index=37&type=section&id=Results%20of%20Operations%20(Three%20Months%20Ended%20July%2031%2C%202025%20Compared%20to%20Three%20Months%20Ended%20July%2031%2C%202024)) Compares the company's financial performance for the three months ended July 31, 2025, against the same period in 2024 **Consolidated Financial Performance (Three Months Ended July 31, in thousands):** | Metric | 2025 | 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :--------- | :--------- | :---------- | :--------- | | Net sales | $495,273 | $280,345 | $214,928 | 77% | | Operating (loss) income | $(270,835) | $23,442 | $(294,277) | -1255% | | Net (loss) income | $(276,007) | $25,350 | $(301,357) | -1189% | - Net sales increased by **$214.9 million** (**77%**) primarily due to the Tyman acquisition[146](index=146&type=chunk) - Operating income shifted from a gain of **$23.4 million** to a loss of **$(270.8) million**, largely due to **$302.3 million** in asset impairment charges[146](index=146&type=chunk) - Interest expense increased by **$13.3 million** (**1,519%**) due to higher borrowings[146](index=146&type=chunk)[161](index=161&type=chunk) - Income tax shifted from an expense of **$6.7 million** to a benefit of **$8.2 million**, driven by the asset impairment charges[146](index=146&type=chunk)[162](index=162&type=chunk) [Hardware Solutions](index=37&type=section&id=Hardware%20Solutions%20(3%20months)) Analyzes the financial performance of the Hardware Solutions segment, including sales growth and operating income changes - Net sales increased by **$151.7 million** (**201%**) to **$227.1 million**, primarily driven by the Tyman acquisition (**$150.8 million**)[147](index=147&type=chunk) - Operating income shifted from **$8.2 million** to a loss of **$(157.4) million**, mainly due to a **$163.2 million** goodwill impairment charge[147](index=147&type=chunk)[150](index=150&type=chunk) [Extruded Solutions](index=38&type=section&id=Extruded%20Solutions%20(3%20months)) Examines the financial performance of the Extruded Solutions segment, focusing on sales and operating income fluctuations - Net sales increased by **$39.9 million** (**30%**) to **$174.4 million**, primarily due to the Tyman acquisition (**$39.9 million**)[151](index=151&type=chunk) - Operating income shifted from **$20.7 million** to a loss of **$(24.9) million**, mainly due to a **$54.9 million** goodwill impairment charge[151](index=151&type=chunk)[154](index=154&type=chunk) [Custom Solutions](index=38&type=section&id=Custom%20Solutions%20(3%20months)) Reviews the financial performance of the Custom Solutions segment, detailing sales growth and operating income changes - Net sales increased by **$29.6 million** (**41%**) to **$102.3 million**, primarily driven by the Tyman acquisition (**$27.4 million**)[154](index=154&type=chunk) - Operating income shifted from **$1.9 million** to a loss of **$(76.1) million**, mainly due to an **$84.2 million** goodwill impairment charge[154](index=154&type=chunk)[158](index=158&type=chunk) [Unallocated Corporate & Other](index=39&type=section&id=Unallocated%20Corporate%20%26%20Other%20(3%20months)) Discusses changes in unallocated corporate expenses, including selling, general, and administrative costs - Selling, general and administrative expenses decreased by **$1.5 million** (**21%**) due to lower transaction and advisory fees and compensation expense[160](index=160&type=chunk) [Results of Operations (Nine Months Ended July 31, 2025 Compared to Nine Months Ended July 31, 2024)](index=40&type=section&id=Results%20of%20Operations%20(Nine%20Months%20Ended%20July%2031%2C%202025%20Compared%20to%20Nine%20Months%20Ended%20July%2031%2C%202024)) Compares the company's financial performance for the nine months ended July 31, 2025, against the same period in 2024 **Consolidated Financial Performance (Nine Months Ended July 31, in thousands):** | Metric | 2025 | 2024 | Change ($K) | Change (%) | | :------------------------------------------ | :----------- | :--------- | :---------- | :--------- | | Net sales | $1,347,795 | $785,701 | $562,094 | 72% | | Operating (loss) income | $(236,892) | $51,996 | $(288,888) | -556% | | Net (loss) income | $(270,377) | $46,976 | $(317,353) | -676% | - Net sales increased by **$562.1 million** (**72%**) primarily due to the Tyman acquisition[164](index=164&type=chunk) - Operating income shifted from a gain of **$52.0 million** to a loss of **$(236.9) million**, largely due to **$302.3 million** in asset impairment charges[164](index=164&type=chunk) - Interest expense increased by **$39.4 million** (**1,362%**) due to higher borrowings[164](index=164&type=chunk)[178](index=178&type=chunk) - Income tax shifted from an expense of **$12.6 million** to a benefit of **$6.9 million**, driven by the asset impairment charges[164](index=164&type=chunk)[179](index=179&type=chunk) [Hardware Solutions](index=40&type=section&id=Hardware%20Solutions%20(9%20months)) Analyzes the financial performance of the Hardware Solutions segment for the nine-month period, including sales growth and operating income changes - Net sales increased by **$410.7 million** (**201%**) to **$614.8 million**, primarily driven by the Tyman acquisition (**$413.4 million**)[165](index=165&type=chunk) - Operating income shifted from **$15.9 million** to a loss of **$(160.6) million**, mainly due to a **$163.2 million** goodwill impairment charge[165](index=165&type=chunk)[168](index=168&type=chunk) [Extruded Solutions](index=41&type=section&id=Extruded%20Solutions%20(9%20months)) Examines the financial performance of the Extruded Solutions segment for the nine-month period, focusing on sales and operating income fluctuations - Net sales increased by **$98.2 million** (**26%**) to **$478.0 million**, primarily due to the Tyman acquisition (**$115.2 million**)[169](index=169&type=chunk) - Operating income decreased by **$40.2 million** (**74%**) to **$14.2 million**, impacted by a **$54.9 million** goodwill impairment charge[169](index=169&type=chunk)[172](index=172&type=chunk) [Custom Solutions](index=41&type=section&id=Custom%20Solutions%20(9%20months)) Reviews the financial performance of the Custom Solutions segment for the nine-month period, detailing sales growth and operating income changes - Net sales increased by **$76.6 million** (**37%**) to **$284.8 million**, primarily driven by the Tyman acquisition (**$74.2 million**)[172](index=172&type=chunk) - Operating income shifted from **$1.7 million** to a loss of **$(69.0) million**, mainly due to an **$84.2 million** goodwill impairment charge[172](index=172&type=chunk)[175](index=175&type=chunk) [Unallocated Corporate & Other](index=42&type=section&id=Unallocated%20Corporate%20%26%20Other%20(9%20months)) Discusses changes in unallocated corporate expenses for the nine-month period, including selling, general, and administrative costs - Selling, general and administrative expenses decreased by **$5.1 million** (**26%**) due to lower transaction and advisory fees and compensation expense[177](index=177&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Analyzes the company's ability to generate and manage cash, including sources of funds, debt facilities, and cash flow activities - Principal sources of funds include cash on hand, cash flow from operations, and borrowings under credit facilities[180](index=180&type=chunk) - The Amended Credit Agreement, effective August 1, 2024, increased the revolving credit facility to **$475 million** and added a **$500 million** term loan A facility[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - As of July 31, 2025, the company had **$66.3 million** in cash and equivalents, **$672.5 million** outstanding under the Facilities, and **$271.4 million** available under the Revolving Credit Agreement[186](index=186&type=chunk) - Cash provided by operating activities decreased by **$6.7 million** for the nine months ended July 31, 2025, compared to the prior year[189](index=189&type=chunk) - Cash used for investing activities increased by **$17.3 million**, primarily due to higher capital expenditures for businesses acquired in the Tyman Acquisition[190](index=190&type=chunk) - Cash used for financing activities increased by **$61.9 million**, mainly due to increased treasury share purchases and repayments of long-term debt[191](index=191&type=chunk) - The company repurchased **100,000 shares** in July 2025, with **$33.6 million** remaining under its **$75.0 million** stock repurchase program[187](index=187&type=chunk)[220](index=220&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Identifies accounting policies requiring significant judgment and estimation, which could materially impact financial results - The preparation of financial statements requires significant estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses[193](index=193&type=chunk) - Critical accounting policies and estimates have not materially changed during the nine months ended July 31, 2025[194](index=194&type=chunk) [New Accounting Pronouncements](index=44&type=section&id=New%20Accounting%20Pronouncements) Discusses recently issued accounting pronouncements and their potential impact on the company's financial statements - No new accounting pronouncements were adopted during the three and nine months ended July 31, 2025[195](index=195&type=chunk) - The company is evaluating the potential impact of new FASB guidance on expense disaggregation, income tax disclosures, and reportable segment disclosures, effective in future periods[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Outlines the company's exposure to interest rate, foreign currency, and commodity price risks, and mitigation strategies [Interest Rate Risk](index=45&type=section&id=Interest%20Rate%20Risk) Assesses the company's exposure to fluctuations in interest rates, particularly on variable-rate debt - The company's debt bears interest at variable rates, making it sensitive to changes in interest rates[200](index=200&type=chunk) - A hypothetical **1.0%** increase or decrease in interest rates could result in approximately **$6.7 million** of additional pretax charges or credits to net income per year[200](index=200&type=chunk) [Foreign Currency Rate Risk](index=45&type=section&id=Foreign%20Currency%20Rate%20Risk) Evaluates the impact of foreign currency exchange rate fluctuations on international operations and hedging strategies - International operations are exposed to foreign currency rate risks, primarily from fluctuations in the Euro, British Pound Sterling (GBP), and Mexican Peso (MXN)[201](index=201&type=chunk) - The company uses foreign exchange contracts to manage a portion of this risk, recognizing a net gain of **$0.3 million** during the nine months ended July 31, 2025[201](index=201&type=chunk) - As of July 31, 2025, there were no outstanding forward foreign exchange contracts[201](index=201&type=chunk) [Commodity Price Risk](index=45&type=section&id=Commodity%20Price%20Risk) Analyzes the company's exposure to price volatility in key raw materials and strategies to mitigate these risks - The company is exposed to price fluctuations in key raw materials such as PVC, petroleum products, stainless steel, zinc, aluminum, and wood[144](index=144&type=chunk)[202](index=202&type=chunk)[205](index=205&type=chunk) - Price adjusters are in place with a majority of customers and suppliers for PVC, petroleum-based materials, and hardwood products to mitigate long-term exposure to price changes[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) - Short-term volatility remains due to timing lags in implementing price updates for various commodities[202](index=202&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - Strategies like surcharges and utilizing local supply chains are being implemented to mitigate potential tariff impacts on raw materials[207](index=207&type=chunk) [Item 4: Controls and Procedures](index=46&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Reports on the effectiveness of disclosure controls and internal controls over financial reporting, including any material weaknesses and remediation efforts [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of the company's disclosure controls and procedures, identifying any material weaknesses - Disclosure controls and procedures were not effective as of July 31, 2025, due to a material weakness in internal controls over financial reporting related to the preparation and review of the Statement of Cash Flows[209](index=209&type=chunk) - The recently acquired Tyman business was excluded from management's assessment of the effectiveness of internal controls over financial reporting as of July 31, 2025[210](index=210&type=chunk) - Despite the material weakness, management concluded that the financial statements fairly present the financial position, results of operations, and cash flows[211](index=211&type=chunk) [Changes in Internal Control over Financial Reporting](index=46&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Details any changes in internal control over financial reporting, including remediation efforts for identified weaknesses - Remediation efforts for the material weakness include enhanced review procedures and a structured non-cash transaction checklist for the Statement of Cash Flow[212](index=212&type=chunk)[215](index=215&type=chunk) - The company expects to conclude the remediation efforts with the October 31, 2025, control evaluation[212](index=212&type=chunk) - Integration of Tyman's financial reporting systems and internal control framework is in progress and expected to be completed during fiscal 2025[213](index=213&type=chunk) PART II. OTHER INFORMATION [Item 1A: Risk Factors](index=47&type=section&id=Item%201A%3A%20Risk%20Factors) Highlights potential risks to the company's business, including geopolitical instability and trade barriers - No material changes from the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended October 31, 2024[217](index=217&type=chunk) - New discussions highlight risks from regional or global trade barriers, tariffs, and geopolitical instability (e.g., Ukraine and Gaza conflicts) that could increase raw material costs and impact supply chains[218](index=218&type=chunk)[219](index=219&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports on the company's common stock repurchases under its publicly announced stock repurchase program **Issuer Purchases of Equity Securities (Three Months Ended July 31, 2025):** | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of a Publicly Announced Plans or Programs | Maximum US Dollars Remaining that May Yet Be Used to Purchase Shares Under the Plans or Programs | | :------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :-------------------------------------------------------------------------------- | | May 2025 | — | $— | — | $35,612,848 | | June 2025 | — | $— | — | $35,612,848 | | July 2025 | 100,000 | $20.54 | 100,000 | $33,559,078 | | **Total** | **100,000** | **$20.54** | **100,000** | | - The stock repurchase program, approved in December 2021, authorized up to **$75.0 million** worth of shares, with no expiration date or limit on the number of shares[220](index=220&type=chunk) [Item 5: Other Information](index=47&type=section&id=Item%205%3A%20Other%20Information) Provides disclosures on any other material information not covered in previous sections, such as trading arrangements - No directors or executive officers adopted or terminated any Rule 10b5-1(c) or 'non-Rule 10b5-1 trading arrangement' during the three months ended July 31, 2025[221](index=221&type=chunk) [Item 6: Exhibits](index=47&type=section&id=Item%206%3A%20Exhibits) Lists all exhibits filed with the Form 10-Q, including agreements, corporate documents, and certifications - The exhibit index lists various documents, including those related to the Tyman acquisition (Rule 2.7 Announcement, Co-operation Agreement), the Amended Credit Agreement, and corporate governance documents[229](index=229&type=chunk) - Certifications by the Chief Executive Officer and Chief Financial Officer (31.1, 31.2) and pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (32.1) are filed herewith[229](index=229&type=chunk)

Financial Data and Key Metrics Changes - The company reported net sales of $495.3 million for Q3 2025, a 77% increase compared to $280.3 million in Q3 2024, primarily driven by the Tymon acquisition [17] - A net loss of $276 million or $6.4 per diluted share was reported for the quarter, compared to a net income of $25.4 million or $0.77 per diluted share in the same period last year [18] - Adjusted EBITDA for the quarter increased by 67.2% to $70.3 million compared to $42 million during the same period last year [20] Business Line Data and Key Metrics Changes - Hardware Solutions segment generated net sales of $227.1 million, a 201% increase compared to $75.5 million in 2024, with a decline in legacy product line volumes by 2.4% [21] - Extruded Solutions segment reported revenue of $174.4 million, a 29.6% increase from $134.6 million in 2024, with a 2.6% decline in legacy product line volumes [22] - Custom Solutions segment net sales were $102.3 million, up from $72.7 million in 2024, with a 0.8% increase in legacy product line volumes [23] Market Data and Key Metrics Changes - In North America, volumes increased compared to the prior quarter but were below normal seasonal expectations due to extended downtime around the July 4 holiday [7] - European market share gains in vinyl extrusion and insulating glass spacer product lines helped offset market weakness despite ongoing pricing pressure [8] Company Strategy and Development Direction - The company is focused on achieving financial and operational objectives, prioritizing above-market growth and improved margin profiles over time [5] - The integration of Tymon is progressing well, with expected cost synergies of approximately $45 million, exceeding initial projections of $30 million [12] - The company aims to capitalize on pent-up demand as macroeconomic uncertainty subsides and customer confidence improves [11] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic headwinds persisted, impacting demand and order patterns, but expressed confidence in the company's resilience [6] - The company anticipates continued pressure on results in the Hardware Solutions segment in Q4 but expects gradual progress as operational issues are addressed [15] - Updated guidance for fiscal 2025 estimates net sales of approximately $1.82 billion and adjusted EBITDA of approximately $235 million [26] Other Important Information - The company repaid over $51 million of bank debt during the quarter, demonstrating strong cash flow generation [13] - Cash provided by operating activities was $60.7 million for Q3 2025, compared to $46.4 million for Q3 2024 [24] Q&A Session Summary Question: Is there a change in the competitive landscape affecting demand? - Management indicated that the softness in demand is more macro-related than competitive, with good performance across regions and product lines [28] Question: What is driving the strength in Europe? - Strength in Europe is attributed to market share gains and the delivery of quality products, particularly in extrusions and framing systems [29] Question: What is the expected EBITDA headwind from Mexico? - Management expects a similar EBITDA headwind in Q4 as seen in Q3, with some progress anticipated towards the end of the quarter [33] Question: What are customers saying about refinancing activity? - Management noted no signs of destocking and expects continued softness in demand due to seasonal factors [44] Question: What is the timeline for realizing synergies from the Tymon acquisition? - The timeline for the initial $30 million in synergies remains early 2026, with no pushout announced [70]

Company Performance - Quanex Building Products reported quarterly earnings of $0.69 per share, missing the Zacks Consensus Estimate of $0.85 per share, and down from $0.73 per share a year ago, representing an earnings surprise of -18.82% [1] - The company posted revenues of $495.27 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 1.35%, and up from $280.35 million year-over-year [2] - Over the last four quarters, Quanex has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - Quanex shares have lost about 17.1% since the beginning of the year, while the S&P 500 has gained 9.6% [3] - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimate at $1.02 on $509.3 million in revenues for the coming quarter and $2.64 on $1.85 billion in revenues for the current fiscal year [4][7] - The estimate revisions trend for Quanex was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Miscellaneous industry, to which Quanex belongs, is currently in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8]

[Executive Summary & Key Highlights](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Key%20Highlights) This section provides an overview of Quanex's Q3 2025 performance, strategic updates, and key financial highlights [Third Quarter 2025 Performance Overview](index=1&type=section&id=1.1.%20Third%20Quarter%202025%20Performance%20Overview) Quanex Building Products announced Q3 2025 results, highlighting new segment reporting, significant debt repayment, reaffirmed cost synergy targets, and updated full-year guidance Financial Highlights (3 Months Ended July 31, 2025 vs 2024) | Metric | 2025 ($M) | 2024 ($M) | Change (%) | | :----------------------- | :-------- | :-------- | :--------- | | Net Sales | 495.3 | 280.3 | 76.7% | | Gross Margin | 138.0 | 70.9 | 94.6% | | Gross Margin % | 27.9% | 25.3% | +2.6 pp | | Net (loss) income | (276.0) | 25.4 | N/A | | Diluted EPS | (6.04) | 0.77 | N/A | | Adjusted Net Income | 31.6 | 26.9 | 17.5% | | Adjusted Diluted EPS | 0.69 | 0.81 | -14.9% | | Adjusted EBITDA | 70.3 | 42.0 | 67.4% | | Adjusted EBITDA Margin % | 14.2% | 15.0% | -0.8 pp | | Cash Provided by Operating Activities | 60.7 | 46.4 | 30.8% | | Free Cash Flow | 46.2 | 40.1 | 15.2% | - Net sales increased by **76.7% to $495.3 million** in Q3 2025, primarily due to the Tyman acquisition; excluding Tyman, net sales increased by **1.4%** due to increased pricing and tariff passthroughs, offset by lower volumes[3](index=3&type=chunk) - The reported net loss of **$276.0 million** was mainly due to a **$302.3 million** non-cash goodwill impairment related to business re-segmentation, not performance indicators or long-term expectations[1](index=1&type=chunk)[3](index=3&type=chunk) - Adjusted earnings increased due to the Tyman acquisition and related cost synergies[4](index=4&type=chunk) [Strategic & Operational Updates](index=1&type=section&id=1.2.%20Strategic%20%26%20Operational%20Updates) Quanex successfully completed its business re-segmentation and is progressing with the Tyman integration, reaffirming an increased cost synergy target of $45 million and strengthening its balance sheet by repaying over $51 million in debt - Completed business re-segmentation and operating in new segments, with substantial progress on Tyman integration[1](index=1&type=chunk) - Reaffirmed a path to realizing approximately **$45 million** in cost synergies over time, exceeding the initial projection of **$30 million**[1](index=1&type=chunk) - Repaid over **$51 million** in bank debt during Q3 2025, strengthening the balance sheet and improving liquidity[1](index=1&type=chunk) - Faced challenges from macroeconomic uncertainty, low consumer confidence, and temporary operational issues in the legacy Tyman window and door hardware business in Mexico[1](index=1&type=chunk)[3](index=3&type=chunk) - Near-term priorities include focusing on Tyman integration, capturing synergies, generating cash flow to pay down debt, and opportunistic stock repurchases[2](index=2&type=chunk) [Consolidated Financial Results](index=1&type=section&id=2.%20Consolidated%20Financial%20Results) This section details Quanex's consolidated financial performance for the three and nine months ended July 31, 2025, highlighting sales growth, net loss due to impairment, and adjusted profitability [Three Months Ended July 31, 2025](index=1&type=section&id=2.1.%20Three%20Months%20Ended%20July%2031%2C%202025) For the three months ended July 31, 2025, Quanex reported a significant increase in net sales, primarily driven by the Tyman acquisition, but recorded a substantial net loss due to a non-cash goodwill impairment charge Income Statement (3 Months Ended July 31, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change (%) | | :-------------------------------- | :------- | :------- | :------------- | | Net sales | $495,273 | $280,345 | 76.7% | | Cost of sales | 357,305 | 209,441 | 70.6% | | Gross Margin | 137,968 | 70,904 | 94.6% | | Operating (loss) income | (270,835) | 23,442 | N/A | | Net (loss) income | (276,007) | 25,350 | N/A | | Diluted EPS | (6.04) | 0.77 | N/A | | Adjusted Net Income | 31,571 | 26,947 | 17.2% | | Adjusted Diluted EPS | 0.69 | 0.81 | -14.9% | | Adjusted EBITDA | 70,295 | 42,035 | 67.2% | - A non-cash goodwill impairment charge of **$302.284 million** was recorded in Q3 2025, significantly impacting net income[18](index=18&type=chunk) - Sales growth for the third quarter of 2025, inclusive of Tyman acquisition contributions, was **201.0%** for Hardware Solutions, **29.6%** for Extruded Solutions, and **40.7%** for Custom Solutions[3](index=3&type=chunk) [Nine Months Ended July 31, 2025](index=1&type=section&id=2.2.%20Nine%20Months%20Ended%20July%2031%2C%202025) For the nine months ended July 31, 2025, Quanex reported a substantial increase in net sales, largely due to the Tyman acquisition, but a net loss driven by the non-cash goodwill impairment, while adjusted profitability metrics demonstrated growth Income Statement (9 Months Ended July 31, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | YoY Change (%) | | :-------------------------------- | :--------- | :------- | :------------- | | Net sales | $1,347,795 | $785,701 | 71.6% | | Cost of sales | 986,129 | 597,127 | 65.1% | | Gross Margin | 361,666 | 188,574 | 91.8% | | Operating (loss) income | (236,892) | 51,996 | N/A | | Net (loss) income | (270,377) | 46,976 | N/A | | Diluted EPS | (5.83) | 1.42 | N/A | | Adjusted Net Income | 68,379 | 60,733 | 12.6% | | Adjusted Diluted EPS | 1.47 | 1.84 | -20.2% | | Adjusted EBITDA | 171,972 | 101,333 | 69.7% | - The **$302.284 million** non-cash goodwill impairment charge also impacted the nine-month net loss[18](index=18&type=chunk) [Financial Position & Liquidity](index=1&type=section&id=3.%20Financial%20Position%20%26%20Liquidity) This section analyzes Quanex's balance sheet, debt levels, cash flow generation, and share repurchase activities, highlighting changes in assets, liabilities, and liquidity [Balance Sheet](index=4&type=section&id=3.1.%20Balance%20Sheet) As of July 31, 2025, Quanex's total assets decreased compared to October 31, 2024, primarily due to a significant reduction in goodwill following the impairment charge, alongside a decrease in total liabilities and stockholders' equity Balance Sheet Snapshot (in thousands) | Metric | July 31, 2025 | October 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :--------------- | :--------- | :--------- | | Total assets | $1,972,677 | $2,319,788 | ($347,111) | -15.0% | | Total liabilities | $1,255,286 | $1,309,042 | ($53,756) | -4.1% | | Total stockholders' equity | $717,391 | $1,010,746 | ($293,355) | -29.0% | | Cash and cash equivalents | $66,272 | $97,744 | ($31,472) | -32.2% | | Goodwill | $271,459 | $574,711 | ($303,252) | -52.8% | [Debt and Leverage](index=1&type=section&id=3.2.%20Debt%20and%20Leverage) Quanex successfully reduced its total debt by $51.25 million in Q3 2025, bringing the total debt to $733.7 million, and improved its leverage ratio to 2.6x, well within covenant limits - Total debt was **$733.7 million** as of July 31, 2025[5](index=5&type=chunk)[26](index=26&type=chunk) - Repaid **$51.25 million** of debt in Q3 2025[1](index=1&type=chunk) - Net Debt to LTM Adjusted EBITDA leverage ratio decreased to **2.6x** as of July 31, 2025[5](index=5&type=chunk) - The Debt Covenant Leverage Ratio was **2.4x** as of July 31, 2025, which is below the **3.75x** limit through Q4 2025 and **3.25x** starting Q1 2026[5](index=5&type=chunk) - Net Debt was **$667.4 million** as of July 31, 2025[26](index=26&type=chunk) [Cash Flow and Free Cash Flow](index=1&type=section&id=3.3.%20Cash%20Flow%20and%20Free%20Cash%20Flow) Quanex demonstrated strong cash generation from operating activities in Q3 2025, contributing to positive Free Cash Flow, though nine-month cash flow from operations and Free Cash Flow decreased year-over-year Cash Flow from Operations (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Three Months Ended July 31 | $60,656 | $46,388 | $14,268 | 30.8% | | Nine Months Ended July 31 | $76,643 | $83,333 | ($6,690) | -8.0% | Free Cash Flow (in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Three Months Ended July 31 | $46,204 | $40,136 | $6,068 | 15.1% | | Nine Months Ended July 31 | $35,647 | $59,898 | ($24,251) | -40.5% | - Liquidity improved to **$337.7 million** as of July 31, 2025, consisting of cash on hand and availability under its Senior Secured Revolving Credit Facility[6](index=6&type=chunk) [Share Repurchases](index=2&type=section&id=3.4.%20Share%20Repurchases) Quanex continued its share repurchase program, buying back 100,000 shares for approximately $2.1 million in Q3 2025, with approximately $33.6 million remaining authorized - Repurchased **100,000 shares** of common stock for approximately **$2.1 million** at an average price of **$20.54 per share** during the three months ended July 31, 2025[7](index=7&type=chunk) - Approximately **$33.6 million** remained under the existing **$75 million** share repurchase authorization as of July 31, 2025[7](index=7&type=chunk) [Business Outlook & Strategic Priorities](index=2&type=section&id=4.%20Business%20Outlook%20%26%20Strategic%20Priorities) This section outlines Quanex's updated fiscal year 2025 guidance and management's strategic focus on integration, synergy capture, debt reduction, and capitalizing on future market demand [Fiscal Year 2025 Guidance](index=2&type=section&id=4.1.%20Fiscal%20Year%202025%20Guidance) Quanex updated its fiscal 2025 guidance, projecting net sales of approximately $1.82 billion and Adjusted EBITDA of approximately $235 million, reflecting year-to-date results, demand trends, and revised synergy realization timelines - Updated Fiscal 2025 Guidance: Net Sales: Approximately **$1.82 billion**; Adjusted EBITDA: Approximately **$235 million**[8](index=8&type=chunk) - Guidance update based on year-to-date results, recent demand trends, updated cost synergy realization tracking, customer conversations, and a realistic timeline to address operational issues in Mexico[8](index=8&type=chunk) [Management Commentary](index=2&type=section&id=4.2.%20Management%20Commentary) CEO George Wilson expressed confidence in Quanex's ability to achieve long-term objectives, emphasizing Tyman integration, synergy capture, debt reduction, and opportunistic stock repurchases as near-term priorities - CEO George Wilson expressed confidence in the company's ability to execute on long-term operational and financial objectives due to a strong team and unmatched product breadth[9](index=9&type=chunk) - Near-term priorities remain unchanged: focus on Tyman integration, capturing synergies, generating cash flow to pay down debt, and opportunistically repurchasing stock[2](index=2&type=chunk) - Quanex is well positioned due to its solid, flexible financial foundation and advantaged strategic positioning, ready to capitalize on pent-up demand as macroeconomic uncertainty subsides[2](index=2&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=5.%20Non-GAAP%20Financial%20Measures) This section defines Quanex's non-GAAP financial measures, such as Adjusted Net Income, EBITDA, Net Debt, and Free Cash Flow, and provides detailed reconciliations to their GAAP equivalents [Definitions and Disclaimers](index=2&type=section&id=5.1.%20Definitions%20and%20Disclaimers) Quanex provides definitions for several non-GAAP financial measures, including Adjusted Net Income, Adjusted EPS, EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA, Net Debt, and Free Cash Flow, used to assess operational performance and assist financial decision-making - Adjusted Net Income and Adjusted EPS are non-GAAP measures that exclude amortization of purchase price adjustments on inventory, asset impairment charges, transaction/advisory fees, reorganization costs, restructuring charges, intangible asset amortization, pension settlement refund, and other net adjustments, used to reflect operational performance by excluding items not affecting ongoing operations[12](index=12&type=chunk) - EBITDA, Adjusted EBITDA, and LTM Adjusted EBITDA are non-GAAP measures used to measure operational performance and assist with financial decision-making, with Adjusted EBITDA further excluding purchase price accounting inventory step-ups, transaction costs, severance, gain/loss on asset sales, restructuring charges, and asset impairment charges[12](index=12&type=chunk)[13](index=13&type=chunk) - Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less cash and cash equivalents, useful for evaluating Quanex's leverage and as a basis for a key covenant in the Company's credit agreement[13](index=13&type=chunk) - Free Cash Flow is a non-GAAP measure calculated as cash provided by operating activities less capital expenditures, used to measure operational and cash management performance[14](index=14&type=chunk) - Quanex does not intend for non-GAAP information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP[15](index=15&type=chunk) [Reconciliations](index=5&type=section&id=5.2.%20Reconciliations) This section provides detailed reconciliations of GAAP net income to Adjusted Net Income, EBITDA, and Adjusted EBITDA, as well as reconciliations for Free Cash Flow and Net Debt, illustrating the adjustments made to derive these non-GAAP metrics - Detailed reconciliation of Last Twelve Months Adjusted EBITDA, showing a total of **$251.8 million** for the period ended July 31, 2025[29](index=29&type=chunk) - Reconciliation of Adjusted Net Income and Adjusted EPS for the three and nine months ended July 31, 2025 and 2024, detailing reconciling items from net (loss) income[32](index=32&type=chunk)[33](index=33&type=chunk) Free Cash Flow Reconciliation (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash provided by operating activities | $60,656 | $46,388 | $76,643 | $83,333 | | Capital expenditures | (14,452) | (6,252) | (40,996) | (23,435) | | **Free Cash Flow** | **$46,204** | **$40,136** | **$35,647** | **$59,898** | Net Debt Reconciliation (in thousands) | Metric | As of July 31, 2025 | As of July 31, 2024 | | :-------------------------- | :------------------ | :------------------ | | Term loan facility | $475,000 | $0 | | Revolving credit facility | 197,500 | - | | Finance lease obligations | 61,194 | 55,007 | | Total debt | 733,694 | 55,007 | | Less: Cash and cash equivalents | 66,272 | 93,966 | | **Net Debt** | **$667,422** | **($38,959)** | [Condensed Consolidated Financial Statements (GAAP)](index=3&type=section&id=6.%20Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) This section presents Quanex's GAAP financial statements, including statements of income, balance sheets, and cash flow statements, for the reported periods, offering a comprehensive view of the company's financial health [Statements of Income](index=3&type=section&id=6.1.%20Statements%20of%20Income) The Condensed Consolidated Statements of Income present the company's revenues, costs, and profitability for the three and nine months ended July 31, 2025, and 2024, with a notable non-cash asset impairment charge in 2025 Condensed Consolidated Statements of Income (in thousands) | Metric | 3 Months Ended July 31, 2025 | 3 Months Ended July 31, 2024 | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $495,273 | $280,345 | $1,347,795 | $785,701 | | Cost of sales | 357,305 | 209,441 | 986,129 | 597,127 | | Gross Margin | 137,968 | 70,904 | 361,666 | 188,574 | | Selling, general and administrative | 71,270 | 36,509 | 208,253 | 103,579 | | Restructuring charges | 1,367 | - | 10,207 | - | | Depreciation and amortization | 33,882 | 10,953 | 77,814 | 32,999 | | Asset impairment charges | 302,284 | - | 302,284 | - | | Operating (loss) income | (270,835) | 23,442 | (236,892) | 51,996 | | Interest expense | (14,218) | (878) | (42,344) | (2,896) | | Net (loss) income | (276,007) | 25,350 | (270,377) | 46,976 | | Diluted EPS | (6.04) | 0.77 | (5.83) | 1.42 | | Cash dividends per share | 0.08 | 0.08 | 0.24 | 0.24 | [Balance Sheets](index=4&type=section&id=6.2.%20Balance%20Sheets) The Condensed Consolidated Balance Sheets provide a snapshot of Quanex's financial position as of July 31, 2025, and October 31, 2024, detailing assets, liabilities, and stockholders' equity, showing a significant decrease in goodwill and total assets Condensed Consolidated Balance Sheets (in thousands) | Metric | July 31, 2025 | October 31, 2024 | | :-------------------------- | :------------ | :--------------- | | Total current assets | $583,324 | $611,268 | | Property, plant and equipment, net | 405,510 | 402,466 | | Goodwill | 271,459 | 574,711 | | Intangible assets, net | 558,768 | 597,909 | | Total assets | $1,972,677 | $2,319,788 | | Total current liabilities | $264,693 | $272,867 | | Long-term debt | 695,605 | 737,198 | | Total liabilities | $1,255,286 | $1,309,042 | | Total stockholders' equity | $717,391 | $1,010,746 | [Statements of Cash Flow](index=4&type=section&id=6.3.%20Statements%20of%20Cash%20Flow) The Condensed Consolidated Statements of Cash Flow detail the cash inflows and outflows from operating, investing, and financing activities for the nine months ended July 31, 2025, and 2024, showing a decrease in cash from operating activities and increased outflows for investing and financing Condensed Consolidated Statements of Cash Flow (in thousands) | Activity | 9 Months Ended July 31, 2025 | 9 Months Ended July 31, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Cash provided by operating activities | $76,643 | $83,333 | | Cash used for investing activities | ($40,635) | ($23,320) | | Cash used for financing activities | ($87,379) | ($25,456) | | Effect of exchange rate changes on cash | $16,302 | $935 | | (Decrease) increase in cash, cash equivalents and restricted cash | ($35,069) | $35,492 | | Cash, cash equivalents and restricted cash at end of period | $67,926 | $93,966 | - Key Cash Flow Changes (9 Months Ended July 31, 2025 vs 2024): Operating activities: Decreased by **$6,690 thousand**; Investing activities: Increased cash outflow by **$17,315 thousand**, primarily due to higher capital expenditures; Financing activities: Increased cash outflow by **$61,923 thousand**, driven by higher repayments of credit facility borrowings and treasury stock purchases[23](index=23&type=chunk) [Segment Performance & Sales Analysis](index=8&type=section&id=7.%20Segment%20Performance%20%26%20Sales%20Analysis) This section presents Quanex's financial performance by its newly defined segments—Hardware Solutions, Extruded Solutions, and Custom Solutions—and provides a detailed sales analysis by product category [Segment Financial Data](index=8&type=section&id=7.1.%20Segment%20Financial%20Data) Quanex's new segment reporting categorizes the business into Hardware Solutions, Extruded Solutions, and Custom Solutions, all showing significant net sales growth in Q3 2025, largely due to the Tyman acquisition Segment Net Sales (3 Months Ended July 31, 2025 vs 2024, in thousands) | Segment | 2025 | 2024 | YoY Change (%) | | :------------------ | :------- | :------- | :------------- | | Hardware Solutions | $227,116 | $75,460 | 201.0% | | Extruded Solutions | $174,427 | $134,552 | 29.6% | | Custom Solutions | $102,264 | $72,667 | 40.7% | Segment Adjusted EBITDA (3 Months Ended July 31, 2025 vs 2024, in thousands) | Segment | 2025 | 2024 | YoY Change (%) | | :------------------ | :------- | :------- | :------------- | | Hardware Solutions | $24,743 | $9,462 | 161.5% | | Extruded Solutions | $37,090 | $27,746 | 33.7% | | Custom Solutions | $12,851 | $6,135 | 109.5% | | Unallocated Corp & Other | ($4,389) | ($1,308) | N/A | Adjusted EBITDA Margin % (3 Months Ended July 31, 2025 vs 2024) | Segment | 2025 | 2024 | Change (pp) | | :------------------ | :----- | :----- | :---------- | | Hardware Solutions | 10.9% | 12.5% | -1.6 pp | | Extruded Solutions | 21.3% | 20.6% | +0.7 pp | | Custom Solutions | 12.6% | 8.4% | +4.2 pp | - Asset impairment charges for the three months ended July 31, 2025, were **$163,198 thousand** for Hardware Solutions, **$54,934 thousand** for Extruded Solutions, and **$84,152 thousand** for Custom Solutions[37](index=37&type=chunk) [Sales Analysis by Product Category](index=10&type=section&id=7.2.%20Sales%20Analysis%20by%20Product%20Category) The sales analysis provides a detailed breakdown of net sales within each segment by specific product categories for the three and nine months ended July 31, 2025, and 2024, highlighting new product lines from the Tyman acquisition Hardware Solutions Sales (3 Months Ended July 31, 2025 vs 2024, in thousands) | Product Category | 2025 | 2024 | | :----------------------- | :------- | :------- | | Window and door hardware | $150,307 | $- | | Screens | $76,809 | $75,460 | Extruded Solutions Sales (3 Months Ended July 31, 2025 vs 2024, in thousands) | Product Category | 2025 | 2024 | | :----------------------- | :------- | :------- | | Window profiles | $68,165 | $67,802 | | Seals and gaskets | $29,865 | $16,513 | | Spacers | $54,743 | $37,868 | | Solar | $5,250 | $5,198 | | Flashing Tape | $3,038 | $4,905 | | Window and door hardware | $10,044 | $- | | Other | $3,322 | $2,266 | Custom Solutions Sales (3 Months Ended July 31, 2025 vs 2024, in thousands) | Product Category | 2025 | 2024 | | :----------------------- | :------- | :------- | | Wood solutions | $53,409 | $51,448 | | Access solutions | $27,370 | $- | | Mixing solutions | $21,485 | $21,219 | - Revenue associated with foreign currency exchange rate impacts increased by **$2.6 million** and **$2.9 million** for the three and nine months ended July 31, 2025, respectively[45](index=45&type=chunk) [Other Information](index=2&type=section&id=8.%20Other%20Information) This section provides details on Quanex's conference call, company overview, and a standard disclaimer regarding forward-looking statements [Conference Call and Webcast](index=2&type=section&id=8.1.%20Conference%20Call%20and%20Webcast) Quanex scheduled a conference call and webcast for September 5, 2025, to discuss the Q3 2025 results, with details provided for registration and access - A conference call and live audio webcast are scheduled for Friday, September 5, 2025, at **11:00 a.m. ET (10:00 a.m. CT)** to discuss the Q3 2025 results[10](index=10&type=chunk) - A link to the live audio webcast and pre-registration is available on Quanex's website in the Investors section under Presentations & Events[10](index=10&type=chunk) [About Quanex](index=2&type=section&id=8.2.%20About%20Quanex) Quanex is a global manufacturer specializing in innovative solutions for various end markets, including window, door, solar, refrigeration, and cabinetry, with plans to expand into adjacent markets - Quanex is a global manufacturer providing innovative solutions in the window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets[11](index=11&type=chunk) - The company plans to leverage its material science expertise and process engineering to expand into adjacent markets[11](index=11&type=chunk) [Forward-Looking Statements](index=3&type=section&id=8.3.%20Forward-Looking%20Statements) The report includes a standard disclaimer regarding forward-looking statements, cautioning that actual results may differ materially from expectations due to various factors, and Quanex undertakes no obligation to update these statements - Statements reflecting future expectations or beliefs are forward-looking statements[16](index=16&type=chunk) - Actual results or events may differ materially from this release due to factors discussed in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q[16](index=16&type=chunk) - Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events[16](index=16&type=chunk)

Core Insights - Quanex Building Products Corporation reported a significant increase in net sales for the third quarter of 2025, reaching $495.3 million, a 76.7% increase compared to $280.3 million in the same period of 2024, primarily driven by the Tyman acquisition [1][3] - The company reaffirmed its cost synergy target, now estimating approximately $45 million in cost synergies over time, an increase from the initial projection of $30 million [1][2] - Despite challenges such as macroeconomic uncertainty and operational issues, the company remains optimistic about its prospects for profitable growth and value creation [1][2] Financial Performance - Net sales for the nine months ended July 31, 2025, totaled $1.35 billion, compared to $785.7 million for the same period in 2024 [1] - Gross margin increased to $138.0 million in Q3 2025, with a gross margin percentage of 27.9%, up from 25.3% in Q3 2024 [1] - The company reported a net loss of $276.0 million for Q3 2025, primarily due to a $302.3 million non-cash goodwill impairment [1][3] Balance Sheet and Liquidity - As of July 31, 2025, total debt stood at $733.7 million, with a leverage ratio of Net Debt to LTM Adjusted EBITDA decreasing to 2.6x [6][7] - The company's liquidity improved to $337.7 million, consisting of $66.3 million in cash and availability under its Senior Secured Revolving Credit Facility [7][8] - The company repaid over $51 million in bank debt during Q3 2025, reflecting strong cash flow [1][2] Share Repurchase Program - The Board authorized a $75 million share repurchase program, with $33.6 million remaining under the existing authorization as of July 31, 2025 [8] - During Q3 2025, the company repurchased 100,000 shares for approximately $2.1 million at an average price of $20.54 per share [8] Outlook - Quanex updated its fiscal 2025 guidance, now estimating net sales of approximately $1.82 billion and Adjusted EBITDA of approximately $235 million [9][10] - The company plans to focus on the integration of Tyman, capturing synergies, generating cash flow to pay down debt, and opportunistically repurchasing stock as macroeconomic conditions improve [2][9]

Group 1 - Quanex Building Products Corporation plans to release its third quarter 2025 results on September 4, 2025, after market close [1] - A conference call is scheduled for September 5, 2025, at 11:00 a.m. ET to discuss the results, with a live audio webcast available on the company's website [2] - Participants can pre-register for the conference call and are advised to join ten minutes early to avoid delays [2] Group 2 - Quanex is a global manufacturer with capabilities across various end markets, including window, door, solar, refrigeration, and cabinetry [3] - The company collaborates with leading OEMs to provide innovative solutions and plans to leverage its material science expertise to expand into adjacent markets [3]

Core Viewpoint - The comparison between Quanex Building Products (NX) and Holcim Ltd Unsponsored ADR (HCMLY) indicates that NX presents a better value investment opportunity due to its stronger earnings outlook and favorable valuation metrics [1][3][7]. Valuation Metrics - NX has a forward P/E ratio of 7.51, significantly lower than HCMLY's forward P/E of 20.82, suggesting that NX is undervalued relative to HCMLY [5]. - The PEG ratio for NX is 0.54, indicating a more attractive valuation when considering expected earnings growth, while HCMLY's PEG ratio stands at 2.07 [5]. - NX's P/B ratio is 0.9, compared to HCMLY's P/B of 1.44, further supporting the notion that NX is undervalued [6]. Investment Outlook - NX holds a Zacks Rank of 2 (Buy), reflecting an improving earnings estimate revision activity, while HCMLY has a Zacks Rank of 5 (Strong Sell), indicating a less favorable analyst outlook [3][7]. - Based on the combination of its improving earnings outlook and favorable valuation metrics, NX is positioned as the superior value option in the current market [7].

Group 1 - The S&P 500 has increased by 16.1% over the last year, while the combined portfolios of the company have risen by 33.1% [1] - Crude Value Insights focuses on cash flow and companies in the oil and natural gas sector, emphasizing value and growth prospects [1] - The company offers an investing service and community that includes a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] Group 2 - Subscribers can participate in live chat discussions about the oil and gas sector [2] - A two-week free trial is available for new subscribers to explore the services offered by the company [3]