← Back to NX filing summaryThis is the extracted source text from the SEC filing. Formatting may differ from the original document.
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
April 30, 2026 October 31, 2025
(In thousands, except share amounts)
ASSETS
Current assets:
Cash and cash equivalents $ 63,671 $ 76,018
Restricted cash 2,313 2,100
Accounts receivable, net of allowance for credit losses of $3,243 and $2,039 211,088 205,384
Inventories 278,047 254,122
Income taxes receivable 6,121 —
Prepaid assets 39,542 32,387
Other current assets 3,651 3,764
Total current assets 604,433 573,775
Property, plant and equipment, net of accumulated depreciation of $443,975 and $414,809 399,190 411,591
Operating lease right-of-use assets 176,809 154,866
Deferred income tax assets 250 2,706
Goodwill 274,750 271,346
Intangible assets, net 533,395 549,137
Other noncurrent assets 4,348 4,812
Total assets $ 1,993,175 $ 1,968,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 127,709 $ 131,307
Accrued liabilities 85,666 95,155
Income taxes payable 6,289 12,076
Current maturities of long-term debt 26,545 27,561
Current operating lease liabilities 18,911 15,446
Total current liabilities 265,120 281,545
Long-term debt 678,932 665,268
Noncurrent operating lease liabilities 164,958 145,459
Deferred income tax liabilities 141,104 135,993
Other noncurrent liabilities 15,703 13,789
Total liabilities 1,265,817 1,242,054
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value, shares authorized 1,000,000; issued and outstanding - none — —
Common stock, $0.01 par value, shares authorized 125,000,000; issued 51,164,108 and 51,211,469, respectively; outstanding 45,927,965 and 45,674,726, respectively 512 512
Additional paid-in-capital 696,391 700,029
Retained earnings 156,641 164,710
Accumulated other comprehensive loss (27,897) (35,439)
Less: Treasury stock at cost, 5,236,143 and 5,536,743 shares, respectively (98,289) (103,633)
Total stockholders’ equity 727,358 726,179
Total liabilities and stockholders' equity $ 1,993,175 $ 1,968,233
The accompanying notes are an integral part of the financial statements.
1
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
(In thousands, except per share amounts)
Net sales $ 462,367 $ 452,478 $ 871,456 $ 852,522
Cost and expenses:
Cost of sales (excluding depreciation and amortization) 344,575 321,096 655,137 628,824
Selling, general and administrative 74,432 70,333 145,858 136,983
Restructuring charges — 936 — 8,840
Depreciation and amortization 24,650 19,192 48,899 43,932
Operating income 18,710 40,921 21,562 33,943
Non-operating income (expense):
Interest expense (12,042) (13,940) (24,409) (28,126)
Other, net 448 (159) 6,065 1,070
Income before income taxes 7,116 26,822 3,218 6,887
Income tax expense (3,766) (6,307) (3,939) (1,257)
Net income (loss) $ 3,350 $ 20,515 $ (721) $ 5,630
Basic earnings (loss) per common share $ 0.07 $ 0.44 $ (0.02) $ 0.12
Diluted earnings (loss) per common share $ 0.07 $ 0.44 $ (0.02) $ 0.12
Weighted-average common shares outstanding:
Basic 45,483 46,483 45,469 46,753
Diluted 45,658 46,563 45,469 46,868
Cash dividends per share $ 0.08 $ 0.08 $ 0.16 $ 0.16
The accompanying notes are an integral part of the financial statements.
2
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
(In thousands)
Net income (loss) $ 3,350 $ 20,515 $ (721) $ 5,630
Other comprehensive income:
Foreign currency translation (loss) gain, net of tax (3,568) 35,345 7,542 19,394
Other comprehensive (loss) income, net of tax (3,568) 35,345 7,542 19,394
Comprehensive (loss) income $ (218) $ 55,860 $ 6,821 $ 25,024
The accompanying notes are an integral part of the financial statements.
3
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
April 30,
2026 2025
(In thousands)
Operating activities:
Net (loss) income $ (721) $ 5,630
Adjustments to reconcile net (loss) income to cash used for operating activities:
Depreciation and amortization 48,899 43,932
Stock-based compensation 2,402 1,825
Deferred income tax 918 1,250
Other, net 3,800 7,243
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (4,479) 5,322
Increase in inventory (21,719) (1,333)
Increase in other current assets (6,200) (7,828)
Decrease in accounts payable (2,459) (14,771)
Decrease in accrued liabilities (10,411) (14,048)
Change in income taxes (12,005) (5,471)
Other, net 689 (5,764)
Cash (used for) provided by operating activities (1,286) 15,987
Investing activities:
Capital expenditures (22,322) (26,544)
Proceeds from disposition of capital assets 29 376
Cash used for investing activities (22,293) (26,168)
Financing activities:
Borrowings under credit facilities 119,000 125,000
Repayments of credit facility borrowings (99,500) (117,500)
Repayments of other long-term debt (1,762) (1,888)
Common stock dividends paid (7,277) (7,552)
Purchase of treasury stock — (27,194)
Other, net (696) (1,186)
Cash provided by (used for) financing activities 9,765 (30,320)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,680 2,303
Decrease in cash, cash equivalents and restricted cash (12,134) (38,198)
Cash, cash equivalents and restricted cash at beginning of period 78,118 102,995
Cash, cash equivalents and restricted cash at end of period $ 65,984 $ 64,797
The accompanying notes are an integral part of the financial statements.
4
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Six Months Ended April 30, 2026 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity
(In thousands, no per share amounts shown except in verbiage)
Balance at October 31, 2025 $ 512 $ 700,029 $ 164,710 $ (35,439) $ (103,633) $ 726,179
Net loss — — (4,071) — — (4,071)
Foreign currency translation adjustment — — — 11,110 — 11,110
Common dividends ($0.08 per share) — — (3,676) — — (3,676)
Stock-based compensation activity:
Expense related to stock-based compensation — 1,166 — — — 1,166
Restricted stock awards granted — (5,415) — — 5,415 —
Other — (354) — — — (354)
Balance at January 31, 2026 $ 512 $ 695,426 $ 156,963 $ (24,329) $ (98,218) $ 730,354
Net income — — 3,350 — — 3,350
Foreign currency translation adjustment — — — (3,568) — (3,568)
Common dividends ($0.08 per share) — — (3,672) — — (3,672)
Stock-based compensation activity:
Expense related to stock-based compensation — 1,236 — — — 1,236
Restricted stock awards granted — (211) — — 211 —
Other — (60) — — (282) (342)
Balance at April 30, 2026 $ 512 $ 696,391 $ 156,641 $ (27,897) $ (98,289) $ 727,358
5
Table of Contents
Six Months Ended April 30, 2025 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity
(In thousands, no per share amounts shown except in verbiage)
Balance at October 31, 2024 $ 513 $ 701,008 $ 430,405 $ (46,428) $ (74,752) $ 1,010,746
Net income — — (14,885) — — (14,885)
Foreign currency translation adjustment — — — (15,951) — (15,951)
Common dividends ($0.08 per share) — — (3,812) — — (3,812)
Purchase of treasury stock — — — — (3,698) (3,698)
Stock-based compensation activity:
Expense related to stock-based compensation — 902 — — — 902
Stock options exercised — 41 — — 173 214
Restricted stock awards granted — (1,894) — — 1,894 —
Performance restricted stock units vested — (1,300) — — 1,300 —
Other (1) (1,399) — — — (1,400)
Balance at January 31, 2025 $ 512 $ 697,358 $ 411,708 $ (62,379) $ (75,083) $ 972,116
Net income — — 20,515 — — 20,515
Foreign currency translation adjustment — — — 35,345 — 35,345
Common dividends ($0.08 per share) — — (3,740) — — (3,740)
Purchase of treasury stock — — — — (23,496) (23,496)
Stock-based compensation activity:
Expense related to stock-based compensation 923 — — — 923
Restricted stock awards granted — (43) — — 43 —
Balance at April 30, 2025 $ 512 $ 698,238 $ 428,483 $ (27,034) $ (98,536) $ 1,001,663
The accompanying notes are an integral part of the financial statements.
6
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Operations, Basis of Presentation and Significant Accounting Policies
Quanex Building Products Corporation is a leading manufacturer and component supplier to original equipment manufacturers (OEMs) in the building products industry, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets. We have organized our business into three reportable business segments: (1) Hardware Solutions, which manufactures window and door hardware and screens; (2) Extruded Solutions, which manufactures insulating glass spacers, vinyl window and door profiles, seals, and weatherstripping; and (3) Custom Solutions, which manufactures wood, mixing, and building access solutions. For additional discussion of our reportable business segments, see Note 12, “Segment Information.” We leverage efficient production and distribution processes and engineering expertise to provide our customers with specialized products for their specific hardware, extrusion, and custom applications. We believe these capabilities enhance our ability to provide value to our customers. We serve a primary customer base in North America and the United Kingdom (U.K.), and also serve customers in international markets through our operating locations in the U.K., Germany, Mexico, Canada, and Italy, as well as through sales and marketing efforts in other countries.
On August 1, 2024, we completed the acquisition of Tyman plc (“Tyman”), a company incorporated in England and Wales (“Tyman Acquisition”). Tyman’s results are allocated to our Hardware Solutions, Extruded Solutions, and Custom Solutions segments in accordance with the nature of operations. For additional discussion of our reportable business segments, see Note 12, “Segment Information.”
Unless the context indicates otherwise, references to “Quanex,” the “Company,” “we,” “us,” and “our” refer to the consolidated business operations of Quanex Building Products Corporation and its subsidiaries.
Basis of Presentation and Principles of Consolidation
The accompanying interim unaudited condensed consolidated financial statements include the accounts of Quanex Building Products Corporation. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of October 31, 2025 was derived from audited financial information but does not include all disclosures required by U.S. GAAP. The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. In our opinion, the accompanying financial statements contain all adjustments (which consist of normal recurring adjustments, except as disclosed herein) necessary to fairly present our financial position, results of operations and cash flows for the interim periods. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year or for any future periods.
Use of Estimates
In preparing financial statements, we make informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. We review our estimates on an ongoing basis, including those related to impairment of long-lived assets and goodwill, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.
Revenue from Contracts with Customers
Revenue recognition
We recognize revenue that reflects the consideration we expect to receive for product sales upon transfer to customers. Revenue from product sales is recognized at a point in time when the product is transferred to the customer, in accordance with the shipping terms, which is generally upon shipment. We estimate a provision for sales returns and warranty allowances to account for product returns related to general returns and product nonconformance. We account for a contract when a customer provides us with a firm purchase order that identifies the products to be provided, the payment terms for those products, and when collectability of the consideration due is reasonably assured.
7
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Performance obligations
A performance obligation is a promise to provide the customer with a good or service. Our performance obligations include product sales, with each product included in a customer contract being recognized as a separate performance obligation. For contracts with multiple performance obligations, the standalone selling price of each product is generally readily observable.
We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. Additionally, we do not disclose the value of unsatisfied performance obligations as our contract terms are less than one year.
Pricing and sales incentives
Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price, reflective of current and prospective discounts.
Shipping and handling costs
We account for shipping and handling services as fulfillment services. Shipping and handling costs incurred by us for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying condensed consolidated statements of (loss) income.
Contract assets and liabilities
Deferred revenue, which is typically not significant, is recorded when we have remaining unsatisfied performance obligations for which we have received consideration.
Disaggregation of revenue
We manufacture and distribute a diverse portfolio of products for OEMs operating in hardware, extrusion, and custom markets worldwide. Our broad geographic reach exposes us to diverse economic conditions, which can impact demand, currency fluctuations, and supply chain dynamics.
The following table summarizes our product sales for the three and six months ended April 30, 2026 and 2025, into groupings by segment which we believe depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. For further details regarding our results by segment, refer to Note 12, “Segment Information.”
8
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
(In thousands)
Hardware Solutions:
Window and door hardware $ 109,377 $ 104,887 $ 234,078 $ 227,240
Screens 91,482 95,860 154,081 156,414
Other 2,160 2,188 3,972 4,021
$ 203,019 $ 202,935 $ 392,131 $ 387,675
Extruded Solutions:
Window profiles $ 72,542 $ 70,009 130,897 129,854
Seals and gaskets 19,530 19,401 37,164 37,442
Spacers 52,526 50,671 100,128 93,532
Solar 5,312 7,062 9,917 12,585
Flashing Tape 3,228 1,599 4,746 3,713
Window and door hardware 8,470 11,177 15,982 20,635
Other 3,341 4,048 5,915 5,836
$ 164,949 $ 163,967 $ 304,749 $ 303,597
Custom Solutions:
Wood solutions $ 56,906 $ 51,237 $ 103,560 $ 95,047
Access solutions 26,455 23,880 49,501 46,788
Mixing solutions 20,552 22,390 39,994 40,710
$ 103,913 $ 97,507 $ 193,055 $ 182,545
Unallocated Corporate & Other:
Eliminations $ (9,514) $ (11,931) $ (18,479) $ (21,295)
$ (9,514) $ (11,931) $ (18,479) $ (21,295)
Net sales $ 462,367 $ 452,478 $ 871,456 $ 852,522
Cash, Cash Equivalents and Restricted Cash
Cash equivalents include all highly liquid investments with an original maturity of three months or less. Such securities with an original maturity which exceeds three months are deemed to be short-term investments. Restricted cash represents cash held by our foreign subsidiary that is subject to foreign exchange and capital control regulations that may restrict the timing and manner of remittance of funds outside the country. We maintain cash, cash equivalents and restricted cash at several financial institutions, which at times may not be federally insured or may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risks on such accounts.
Allowance for Credit Losses
We have established an allowance for credit losses to estimate the risk of loss associated with our accounts receivable balances. Our policy for determining the allowance is based on factors that affect collectability, including historical trends of write-offs, recoveries and credit losses, and the credit quality of our customers. We believe our allowance is adequate to absorb known or probable losses as of April 30, 2026. Different assumptions or changes in economic circumstances could result in changes to the allowance.
Related Party Transactions
Net sales to customers which are related parties with one of our non-employee directors for the three and six months ended April 30, 2026 were $0.5 million and $0.8 million, respectively, and $0.5 million and $1.0 million, respectively, for comparable prior year periods. Purchases from a supplier which is a related party with one of our non-employee directors for the three and six months ended April 30, 2026 was $0.2 million and $0.3 million, respectively, and zero and $0.1 million for the comparable prior year periods. We performed a review of these transactions, of which no single transaction or series of related
9
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
transactions exceeded $120,000 in amount, and determined that these transactions were enacted independently. We are not aware of any other related party transactions with any of our current non-employee directors or officers outside of their normal business functions or expected contractual duties.
Restructuring
We accrue one-time severance costs pursuant to an approved plan of restructuring at the communication date, when affected employees have been notified of the potential severance and sufficient information has been provided for the employee to calculate severance benefits, in the event the employee is involuntarily terminated. In addition, we accrue costs associated with the termination of contractual commitments including leases at the time the lease is terminated pursuant to the lease provisions or in accordance with another agreement with the landlord. Otherwise, we continue to recognize lease expense through the cease-use date. After the cease-use date, we determine if our operating lease payments are at market. We assume sublet of the facility at the market rate. To the extent our lease obligations exceed the fair value rentals, we discount to arrive at the present value and record a liability. If the facility is not sublet, we expense the amount of the assumed sublet in the current period. For other costs directly related to the restructuring effort, such as equipment moving costs, we expense in the period incurred.
During fiscal 2025, we restructured our reportable segments to integrate the acquisition of Tyman plc with our legacy Quanex operations. This restructuring aligned our business into three reportable segments: Hardware Solutions, Extruded Solutions, and Custom Solutions, which is how our Chief Operating Decision Maker (“CODM”) assesses the performance of our business, makes key operating decisions and allocates resources. For additional discussion of our reportable business segments, see Note 12, “Segment Information.”
We incurred no restructuring charges related to the reorganization for the three and six months ended April 30, 2026, compared to $0.9 million and $8.8 million, respectively, for the comparable prior year periods. Restructuring charges included workforce alignment costs, primarily severance and employee-related expenses, of $0.9 million and $4.9 million, for the three and six months ended April 30, 2025, respectively. As of April 30, 2026, we have paid $6.0 million in the 2025 workforce alignment costs, with a remaining accrual of $0.3 million. Additionally, we recognized $3.9 million during the six months ended April 30, 2025 related to the disposal of software which no longer supports our business.
2. Inventories
Inventories consisted of the following at April 30, 2026 and October 31, 2025 (in thousands):
April 30, 2026 October 31, 2025
Raw materials $ 91,686 $ 85,054
Finished goods and work in process 181,811 165,711
Supplies and other 4,550 3,357
Total $ 278,047 $ 254,122
10
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
3. Property, Plant and Equipment
Property, plant and equipment consisted of the following as of April 30, 2026 and October 31, 2025 (in thousands):
April 30, 2026 October 31, 2025
Land and land improvements $ 22,137 $ 21,725
Buildings and building improvements 189,595 194,034
Machinery and equipment 580,805 548,623
Construction in progress 50,628 62,018
Property, plant and equipment, gross 843,165 826,400
Less: Accumulated depreciation 443,975 414,809
Property, plant and equipment, net $ 399,190 $ 411,591
Depreciation expense, including amortization of finance leases, for the three and six months ended April 30, 2026 was $14.9 million and $29.4 million, respectively, and $12.7 million and $26.6 million for the comparable prior year periods.
We did not record any impairment charges related to property, plant and equipment or intangible assets for the periods ended April 30, 2026 and October 31, 2025.
4. Goodwill and Intangible Assets
Goodwill
The change in the carrying amount of goodwill for the six months ended April 30, 2026 was as follows (in thousands):
Six Months Ended
April 30, 2026
Beginning balance as of November 1, 2025 $ 271,346
Foreign currency translation adjustment 3,404
Balance as of the end of the period $ 274,750
As of April 30, 2026, we have ten reporting units, seven of which comprised our current goodwill balance. These ten reporting units are aggregated into our three reportable segments. See Note 12, “Segment Information” for a summary of the change in the carrying amount of goodwill by segment.
Identifiable Intangible Assets
Amortizable intangible assets consisted of the following as of April 30, 2026 and October 31, 2025 (in thousands):
April 30, 2026 October 31, 2025
Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Customer relationships $ 509,759 $ 155,891 $ 506,473 $ 141,462
Trademarks and trade names 242,419 66,064 240,622 59,833
Patents and other technology 26,128 22,956 26,105 22,768
Total $ 778,306 $ 244,911 $ 773,200 $ 224,063
We had amortization expense related to intangible assets for the three and six months ended April 30, 2026 of $9.8 million and $19.5 million, respectively, compared to $6.5 million and $17.1 million for the comparable prior year periods, respectively. Amortization expense for the six months ended April 30, 2025 included a one-time adjustment of $3.5 million.
11
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of April 30, 2026 (in thousands):
Estimated Amortization Expense
2026 (remaining six months) $ 19,591
2027 39,181
2028 33,948
2029 33,931
2030 32,484
Thereafter 374,260
Total $ 533,395
5. Debt and Finance Lease Obligations
Long-term debt consisted of the following at April 30, 2026 and October 31, 2025 (in thousands):
April 30, 2026 October 31, 2025
Term Loan A Facility $ 456,250 $ 468,750
Revolving Credit Facility 204,500 172,500
Finance lease obligations and other 54,294 62,619
Unamortized deferred financing fees (9,567) (11,040)
Total debt $ 705,477 $ 692,829
Less: Current maturities of long-term debt 26,545 27,561
Long-term debt $ 678,932 $ 665,268
Revolving Credit Facility and Term A Facility
On June 12, 2024, in connection with the Tyman Acquisition, the Company, Wells Fargo Bank, National Association (“Wells Fargo Bank”, acting as agent, swingline lender and issuing lender, the “Agent”), the other entities therein specified in the capacities therein specified, and the lenders parties thereto, entered into an amendment to the Second Amended and Restated Credit Agreement, dated as of July 6, 2022 (the “Existing Credit Agreement”, and the Existing Credit Agreement as so amended, the “Amended Credit Agreement”). The Amended Credit Agreement did not become effective until August 1, 2024 upon the completion of the Tyman Acquisition.
The Amended Credit Agreement (i) increased the senior secured revolving credit facility to an aggregate principal amount of $475 million (the “Revolving Credit Facility”) and (ii) provides for a senior secured term loan A facility in an aggregate principal amount of $500 million (the “Term A Facility” and together with the Revolving Credit Facility, the “Facilities”). The Revolving Credit Facility includes alternative currency, letter of credit, and swing-line sub-facilities of $100 million, $30 million, and $15 million, respectively. We capitalized $13.8 million of deferred financing fees related to the Amended Credit Agreement. The maturity date of the Facilities is five years after the acquisition effective date, maturing on August 1, 2029.
The Term A Facility amortizes on a quarterly basis at 5% per annum of the original principal amount of the Term A Facility, with the remainder due at maturity. The Term A Facility must be prepaid with 100% of the net cash proceeds of the issuance or incurrence of debt and 100% of the net cash proceeds of all asset sales, insurance and condemnation recoveries, and other asset dispositions.
Borrowings under the Facilities bear interest, at our option, at (1) the Base Rate plus an applicable margin or (2) Adjusted Term SOFR plus an applicable margin. The applicable margin will range from 1.0% to 1.75% for Base Rate loans and 2.0% to 2.75% for Adjusted Term SOFR loans. In addition, we are subject to commitment fees for the unused portion of the Revolving Credit Facility.
12
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The applicable margin percentages are based on the Consolidated Net Leverage Ratio outlined in the following table:
Pricing Level Consolidated Net Leverage Ratio Commitment Fee Term SOFR Loans, Eurocurrency Rate Loans and RFR Loans Base Rate Loans
I Less than or equal to 1.50 to 1.00 0.150% 2.00% 1.00%
II Greater than 1.50 to 1.00, but less than or equal to 2.25 to 1.00 0.175% 2.25% 1.25%
III Greater than 2.25 to 1.00, but less than or equal to 3.00 to 1.00 0.200% 2.50% 1.50%
IV Greater than 3.00 to 1.00 0.250% 2.75% 1.75%
In the event of default, outstanding borrowings accrue interest at the Default Rate, as defined, whereby the obligations will bear interest at a per annum rate equal to 2% above the total per annum rate otherwise applicable.
The Facilities provide for incremental revolving credit commitments for a minimum principal amount of $10.0 million, up to an aggregate amount of the greater of (1) $310.0 million and (2) 100% of Consolidated EBITDA, subject to the lender's discretion to elect or decline the incremental increase. We can also borrow up to the lesser of $15.0 million or the revolving credit commitment, as defined, under a Swingline feature of the Credit Agreement.
The Facilities contain: (1) a Consolidated Interest Coverage Ratio requirement whereby we must not permit the Consolidated Interest Coverage Ratio, as defined, to be less than 3.00 to 1.00, and (2) a Consolidated Net Leverage Ratio requirement whereby we must not permit the Consolidated Net Leverage Ratio, as defined, to be greater than 3.25 to 1.00.
In addition to maintaining these financial covenants, the Facilities also limit our ability to enter into certain business transactions, such as to incur indebtedness or liens, to acquire businesses or dispose of material assets, make restricted payments, pay dividends (limited to $35.0 million per year) and other transactions as further defined in the Credit Facility. Some of these limitations, however, do not take effect so long as total leverage is less than or equal to 2.75 to 1.00 and available liquidity exceeds $25.0 million. Substantially all of our domestic assets, with the exception of real property, were used as collateral for the Credit Agreement.
As of April 30, 2026, we had $660.8 million borrowings outstanding under the Facilities (reduced by unamortized debt issuance costs of $9.6 million), $5.6 million of outstanding letters of credit, and $54.3 million outstanding primarily under finance leases and other debt. We had $264.9 million available for use under the Revolving Credit Facility at April 30, 2026. The borrowings outstanding as of April 30, 2026 under the Facilities accrue interest at 6.25% per annum, and our weighted-average borrowing rate for borrowings outstanding during the six months ended April 30, 2026 and 2025 was 6.32% and 6.83%, respectively. We were in compliance with our debt covenants as of April 30, 2026.
6. Retirement Plans
Defined Contribution Plan
We sponsor a defined contribution plan into which we and our employees make contributions. We match 100% of employee deferrals up to 5% of eligible annual compensation for all employees under the plan. We do not offer our common stock as a direct investment option under these plans. For the six months ended April 30, 2026 and 2025, we contributed approximately $5.8 million and $4.9 million for these plans, respectively.
Other Plans
We maintain a non-qualified deferred compensation plan covering members of the Board of Directors and certain key employees. As of April 30, 2026 and October 31, 2025, the liability associated with the deferred compensation plan was approximately $4.8 million and $4.1 million, respectively. We record the current portion of liabilities associated with these plans under the caption “Accrued liabilities,” and the long-term portion under the caption “Other liabilities” in the accompanying condensed consolidated balance sheets.
13
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Income Taxes
To determine our income tax expense or benefit for interim periods, consistent with accounting standards, we apply the estimated annual effective income tax rate to year-to-date results, plus any applicable discrete items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitations, tax benefits or expense of uncertain tax positions, tax benefits on equity compensation, and increases or decreases in valuation allowances on deferred tax assets. Our estimated annual effective tax rates from continuing operations for the six months ended April 30, 2026 and 2025 were 122.4% and 18.2%, respectively. The difference between our estimated annual effective income tax rate and the U.S. federal statutory rate of 21% principally results from discrete tax items, U.S. state taxes, a non-U.S. tax rate differential and other permanent differences. The increase in the 2026 effective tax rate compared to the prior year was primarily driven by $3.2 million of discrete items including equity-based compensation award activity, state deferred tax remeasurement from legal entity reorganization activities, and changes in reserves for uncertain tax positions, which had a disproportionate impact on the rate given the lower pre-tax earnings in the current period. The primary discrete item affecting the 2025 effective rate was the benefit of $0.4 million related to equity-based compensation award activity.
We evaluate the likelihood of realization of our deferred tax assets by considering both positive and negative evidence. We maintain a valuation allowance for certain state net operating losses which totaled $0.8 million as of April 30, 2026 and October 31, 2025, respectively. We also maintain a valuation allowance for capital losses which totaled $3.6 million as of April 30, 2026 and October 31, 2025, respectively.
On July 4, 2025, the One Big Beautiful Bill Act was enacted. The Act included several business tax provisions that impacted the Company, including a reclass of our income tax payable and deferred tax liability related to the timing differences on fixed assets depreciation.
8. Contingencies
Remediation and Environmental Compliance Costs
Under applicable state and federal laws, we may be responsible for, among other things, all or part of the costs required to remove or remediate wastes or hazardous substances at locations we, or our predecessors, have owned or operated. From time to time, we also have been alleged to be liable for all or part of the costs incurred to clean up third-party sites where there might have been an alleged improper disposal of hazardous substances. Currently, we are not involved in any such matters.
From time to time, we incur routine expenses and capital expenditures associated with compliance with existing environmental regulations, including control of air emissions and water discharges, and plant decommissioning costs. We have not incurred any material expenses or capital expenditures related to environmental matters during the past three fiscal years, and do not expect to incur a material amount of such costs in fiscal 2026. While we will continue to have future expenditures related to environmental matters, any such amounts are impossible to reasonably estimate at this time. Based upon our experience to date, we do not believe that our compliance with environmental requirements will have a material adverse effect on our operations, financial condition or cash flows.
Litigation
From time to time, we, along with our subsidiaries, are involved in various litigation matters arising in the ordinary course of our business, including those arising from or related to contractual matters, commercial disputes, intellectual property, personal injury, environmental matters, product performance or warranties, product liability, insurance coverage and personnel and employment disputes.
We regularly review with legal counsel the status of all ongoing proceedings, and we maintain insurance against these risks to the extent deemed prudent by our management and to the extent such insurance is available. However, there is no assurance that we will prevail in these matters or that our insurers will accept full coverage of these matters, and we could, in the future, incur judgments, enter into settlements of claims, or revise our expectations regarding the outcome or insurability of matters we face, which could materially impact our results of operations.
We have been and are currently party to multiple claims, some of which are in litigation, relating to alleged defects in a commercial sealant product that was manufactured and sold during the 2000’s. While we believe that our product was not defective and that we would prevail in these commercial sealant product claims if taken to trial, the timing, ultimate resolution and potential impact of these claims is not currently determinable, and additional claims may be raised in the future that result in the Company bearing legal fees and/or judgment costs, if any. Nevertheless, after taking into account all currently available information, including our defenses, the advice of our counsel, and the extent and currently-expected availability of our existing
14
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
insurance coverage, we believe that the eventual outcome of these commercial sealant claims will not have a material adverse effect on our overall financial condition, results of operations or cash flows, and we have not recorded any accrual with regard to these claims.
On September 19, 2025, a purported shareholder class action lawsuit against the Company and two of its officers was filed in federal court in the Southern District of Texas, titled Zanol v. Quanex Building Products Corporation et al, Case No. 4:25-cv-04453. During the quarter ended January 31, 2026, Roofers’ Pension Fund was appointed lead plaintiff (together with Zanol, “Plaintiffs”) and the case was re‑styled as In re Quanex Building Products Corporation Securities Litigation. On March 24, 2026, Plaintiffs filed an amended complaint (the “Zanol Amended Complaint”) that alleges certain violations of federal securities laws related to public disclosures made by the Company in connection with the 2024 acquisition of Tyman plc and 2025 disclosures principally related to our window and door operations in Mexico. On April 24, 2026, a derivative lawsuit titled Torres v. Wilson, et al., Case No. 4:26-cv-03321 was filed in the Southern District of Texas (the “Torres Lawsuit”) against the officers named in the Zanol Amended Complaint and the Company’s board of directors. The allegations of the Torres Lawsuit are based on the same allegation made in the Zanol Amended Complaint. The Company has filed a motion to dismiss the Zanol Amended Complaint. It has not yet been served with, and has not responded to, the Torres Lawsuit. While the ultimate outcome of any legal matter cannot be predicted with certainty, the Company strongly believes that the Zanol Amended Complaint and Torres Lawsuit are without merit, intends to vigorously defend itself and its officers against the allegations, and maintains insurance coverage for such matters. At present, the Company cannot reasonably estimate a range of loss, if any, for these actions based on their early stage and the information available to the Company, and accordingly, the Company has not accrued any liability associated with these actions.
9. Fair Value Measurement of Assets and Liabilities
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market data developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to Level 1 and the lowest priority to Level 3. The three levels of the fair value hierarchy are described below:
•Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
•Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
•Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Carrying amounts reported on the balance sheet for cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments. Our outstanding debt is variable rate debt that re-prices frequently, thereby limiting our exposure to significant change in interest rate risk. As a result, the fair value of our debt instrument approximates carrying value at April 30, 2026, and October 31, 2025 (Level 2 measurement).
As of April 30, 2026, we had no outstanding forward foreign exchange contracts to hedge our exposure to foreign currency fluctuations, as contracts entered into earlier in the fiscal year matured and settled during the period. As of April 30, 2025, we had outstanding forward foreign exchange contracts to hedge our foreign currency exposures against the U.S. Dollar (“USD”) to Great British Pound (“GBP”), with a notional principal amount of $1.0 million, and foreign currency exposures against the Mexican Peso (“MXN”) to USD, with a notional principal amount of $10.0 million. Hedge accounting is not applied to our forward exchange contracts. Our forward foreign exchange contracts are adjusted to fair value by recording gains and losses to “Other, net,” and we record the related asset or liability to “Other Assets” or “Current Liabilities” in the accompanying consolidated statement of (loss) income and consolidated balance sheets, respectively. We recognized a loss of $0.3 million and a gain of $0.3 million related to our forward foreign exchange contracts during the three and six months ended April 30, 2026, respectively, and a gain of $0.5 million and $0.8 million for the comparable prior year periods. The value of forward foreign exchange contracts fluctuates based on exchange rate fluctuations for currencies stated in the foreign exchange contracts (Level 2 measurements).
15
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. Stock-Based Compensation
We maintain an Omnibus Incentive Plan (2020 Plan) that provides for the granting of restricted stock awards, stock options, restricted stock units, performance share awards, performance restricted stock units, and other stock-based and cash-based awards. The 2020 Plan is administered by the Compensation and Management Development Committee of the Board of Directors.
The aggregate number of shares of common stock authorized for grant under the 2020 Plan is 3,139,895 as approved by the shareholders. Any officer, key employee and/or non-employee director is eligible for awards under the 2020 Plan. We grant restricted stock units to non-employee directors on the first business day of each fiscal year. As approved by the Compensation & Management Development Committee of our Board of Directors annually, we grant a mix of restricted stock awards, performance shares and/or performance restricted stock units to officers, management and key employees. We also historically granted stock options to certain officers, directors and key employees. Occasionally, we may make additional grants to key employees during the year.
Restricted Stock Awards
Restricted stock awards are granted to key employees and officers annually, and typically cliff vest over a three-year period or a three-year graded vesting schedule with service and continued employment as the only vesting criteria. The recipient of the restricted stock award is entitled to all of the rights of a shareholder, except that the awards are nontransferable during the vesting period and dividends are not paid until the vesting. The fair value of the restricted stock award is established on the grant date and then expensed over the vesting period. Shares are generally issued from treasury stock at the time of grant.
A summary of non-vested restricted stock award activity during the six months ended April 30, 2026 is presented below:
Restricted Stock Awards Weighted-Average Grant Date Fair Value per Share
Non-vested at October 31, 2025 257,982 $ 28.15
Granted 300,600 13.78
Forfeited (19,247) 17.57
Vested (96,389) 24.17
Non-vested at April 30, 2026 442,946 $ 19.73
The total weighted-average grant-date fair value of restricted stock awards that vested during each of the six months ended April 30, 2026 and 2025 was $2.3 million and $1.9 million, respectively. As of April 30, 2026, total unrecognized compensation cost related to unamortized restricted stock awards was $5.2 million. We expect to recognize this expense over the remaining weighted average vesting period of 1.9 years.
Stock Options
Historically, stock options have been awarded to key employees, officers and non-employee directors. In December 2017, the Compensation & Management Development Committee of the Board of Directors approved a change to the long-term incentive award program eliminating the grant of stock options and replacing this award with a grant of performance restricted stock units as further described below. Stock options typically vested ratably over a three-year period with service and
16
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
continued employment as the vesting conditions. Our stock options may be exercised up to a maximum of ten years from the date of grant. The fair value of the stock options is determined on the grant date and expensed over the vesting period.
We use a Black-Scholes pricing model to estimate the fair value of stock options. The following table summarizes our stock option activity for the six months ended April 30, 2026:
Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (000s)
Outstanding at October 31, 2025 68,950 $ 19.38
Forfeited/Expired (32,400) 19.30
Outstanding at April 30, 2026 36,550 $ 19.45 0.6 $ 18
Vested at April 30, 2026 36,550 $ 19.45 0.6 $ 18
Exercisable at April 30, 2026 36,550 $ 19.45 0.6 $ 18
Intrinsic value is the amount by which the market price of the common stock on the date of exercise exceeds the exercise price of the stock option. There were no stock options exercised during the six months ended April 30, 2026. The total intrinsic value of stock options exercised during the six months ended April 30, 2025 was $0.1 million.
Restricted Stock Units
Restricted stock units may be awarded to key employees and officers from time to time, and annually to non-employee directors. The non-employee director restricted stock units vest immediately but are payable only upon the director's cessation of service unless an election is made by the non-employee director to settle and pay the award on an earlier specified date. Restricted stock units awarded to employees and officers typically cliff vest after a three-year period with service and continued employment as the vesting conditions. Restricted stock units are not considered outstanding shares and do not have voting rights, although the holder does receive a cash payment equivalent to the dividend paid, on a one-for-one basis, on our outstanding common shares. Once the vesting criteria is met, each restricted stock unit is payable to the holder in cash based on the market value of one share of our common stock. Accordingly, we record a liability for the restricted stock units on our balance sheet and recognize any changes in the market value during each reporting period as compensation expense.
During the six months ended April 30, 2026 and 2025, non-employee directors received 64,360 and 28,240 restricted stock units, respectively, at a weighted-average grant date fair value of $14.92 per share and $29.02 per share, respectively. During the six months ended April 30, 2026, we paid $1.2 million to settle vested restricted stock units awarded to non-employee directors.
A summary of non-vested restricted stock unit activity awarded to key employees and officers during the six months ended April 30, 2026 is presented below:
Restricted Stock Units
Non-vested at October 31, 2025 51,772
Vested (10,084)
Forfeited (6,499)
Non-vested at April 30, 2026 35,189
During the six months ended April 30, 2026, we paid $0.2 million to settle vested restricted stock units awarded to key employees and officers.
Performance Share Awards
Performance shares are awarded to key employees and officers annually. The performance share awards granted in December 2023 vest with return on net assets (RONA) as the vesting condition. The performance share awards granted in December 2024, March 2025 and December 2025 vest with adjusted earnings per share performance as the vesting condition and RONA as a performance modifier. The performance share awards pay out 100% in cash.
17
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
The expected cash settlement of the performance share award is recorded as a liability and is being marked to market over the three-year term of the award and can fluctuate depending on the number of shares ultimately expected to vest. Depending on the achievement of the performance conditions, 0% to 200% of the December 2022 and December 2023 awarded performance shares may ultimately vest and 0% to 250% of the December 2024 performance shares may ultimately vest.
The following table summarizes our performance share grants and the grant date fair value for each performance metric:
Grant Date Shares Awarded Grant Date Fair Value Shares Forfeited
December 7, 2023 72,200 $ 32.15 —
December 4, 2024 88,900 $ 29.75 2,393
March 1, 2025 3,000 $ 18.89 —
December 4, 2025 207,200 $ 13.66 7,519
April 6, 2026 4,900 $ 17.75 —
During the six months ended April 30, 2026, no shares vested pursuant to the December 2022 grant.
Performance share awards are payable in cash based upon the number of performance shares ultimately earned, and are therefore not considered outstanding shares.
Performance Restricted Stock Units
Performance restricted stock units are awarded to key employees and officers annually. These awards cliff vest upon a three-year service period with the absolute total shareholder return of our common stock over this three-year term as the vesting criteria. The number of performance restricted stock units earned is variable depending on the metric achieved, and the settlement method is 100% in our common stock, with accrued dividends paid in cash at the time of vesting, assuming the shares had been outstanding throughout the performance period.
To value the performance restricted stock units, we utilized a Monte Carlo simulation model to arrive at a grant-date fair value. This amount will be adjusted for forfeitures and expensed over the three-year term of the award with a credit to additional paid-in-capital. Depending on the achievement of the performance conditions, a minimum of 0% and a maximum of 150% of the awarded performance restricted stock units may vest. Specifically, the awards vest on a continuum with the following Absolute Total Shareholder Return (A-TSR) milestones:
Vesting Level Vesting Criteria Percentage of Award Vested
Level 1 A-TSR greater than or equal to 50% 150%
Level 2 A-TSR less than 50% and greater than or equal to 20% 100%
Level 3 A-TSR less than 20% and greater than or equal to -20% 50%
Level 4 A-TSR less than -20% —%
The following table summarizes our performance restricted stock unit grants and the grant date fair value for the A-TSR performance metric:
Grant Date Shares Awarded Grant Date Fair Value Shares Forfeited
December 7, 2023 40,700 $ 30.35 —
December 4, 2024 50,900 $ 29.97 —
March 1, 2025 2,200 $ 29.97 —
December 4, 2025 126,000 $ 13.82 —
The performance restricted stock units are not considered outstanding shares, do not have voting rights, and are excluded from diluted weighted-average shares used to calculate earnings per share until the performance criteria is probable to result in the issuance of contingent shares. As of April 30, 2026, we have deemed 13,427 shares related to the December 2023 grant of performance restricted stock units as probable to vest. The actual number of performance restricted stock units that ultimately
18
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
vest may differ based on actual performance and market condition outcomes through the end of the applicable performance period.
The following table summarizes amounts expensed as selling, general and administrative expense related to restricted stock awards, stock options, restricted stock units, performance share awards and performance restricted stock units for the three and six months ended April 30, 2026 and 2025 (in thousands):
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
Restricted stock awards $ 854 $ 595 $ 1,656 $ 1,188
Restricted stock units 347 (540) 2,256 (659)
Performance share awards (50) 177 (106) 590
Performance restricted stock units 382 328 746 637
Total compensation expense $ 1,533 $ 560 $ 4,552 $ 1,756
Treasury Shares
We record treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Shares are generally issued from treasury stock at the time of grant of restricted stock awards, upon the exercise of stock options, and upon the vesting of performance restricted stock units. On the subsequent issuance of treasury shares, we record proceeds in excess of cost as an increase in additional paid in capital. A deficiency of such proceeds relative to costs would be applied to reduce paid-in-capital associated with prior issuances to the extent available, with the remainder recorded as a charge to retained earnings. There were no charges to retained earnings during the six months ended April 30, 2026.
The following table summarizes the treasury stock activity during the six months ended April 30, 2026:
Six Months Ended
April 30, 2026
Beginning Balance as of November 1, 2025 5,536,743
Restricted stock awards granted (300,600)
Balance at April 30, 2026 5,236,143
11. Other, net
Other income included under the caption “Other, net” on the condensed consolidated statements of (loss) income, consisted of the following for the three and six months ended April 30, 2026 and 2025 (in thousands):
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
Foreign currency transaction gains (losses) $ 158 $ (1,003) $ 5,230 $ (831)
Foreign currency derivative (losses) gains (296) 486 325 835
Interest income 219 469 532 1,087
Other 367 (111) (22) (21)
Other, net $ 448 $ (159) $ 6,065 $ 1,070
19
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. Segment Information
Prior to the third quarter of 2025, we presented four reportable business segments in accordance with ASC Topic 280-10-50, “Segment Reporting” (ASC 280): (1) NA Fenestration, comprising four operating segments primarily focused on the fenestration market in North America including vinyl profiles, insulating glass spacers, screens, custom compound mixing, and other fenestration components; (2) EU Fenestration, comprising our U.K.-based vinyl extrusion business, manufacturing vinyl profiles and conservatories, and the European insulating glass business manufacturing insulating glass spacers; (3) NA Cabinet Components, comprising our cabinet door and components segment; and (4) Tyman, which was acquired on August 1, 2024, comprising a leading international supplier of engineered fenestration components and access solutions to the construction industry.
During the third quarter of 2025, we restructured our reportable segments due to changes in our organizational structure and how our CODM makes key operating decisions, allocates resources and assesses the performance of our business. As a result, we now report in three reportable segments, based on the nature of products offered: Hardware Solutions, which provides window and door hardware and screens; Extruded Solutions, which supplies insulating glass spacers, vinyl window and door profiles, seals, and weatherstripping; and Custom Solutions, which provides wood, mixing, and building access solutions. We continue to maintain a grouping called Unallocated Corporate & Other, which includes transaction expenses, stock-based compensation, long-term incentive awards based on the performance of our common stock and other factors, certain severance and legal costs not deemed to be allocable to all segments, depreciation of corporate assets, interest expense, other, net, income taxes, inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during our annual planning process. Other general and administrative costs associated with the corporate office are allocated to the reportable segments, based upon each segment’s relative operating activity. The accounting policies of our operating segments are the same as those used to prepare the accompanying condensed consolidated financial statements. Corporate general and administrative expenses allocated during the three and six month periods ended April 30, 2026 was $12.6 million and $24.7 million, respectively, and $10.0 million and $17.9 million for the comparable prior year periods.
Our CODM, the President and Chief Executive Officer, reviews several measures of segment profitability to assess performance and allocate resources. Segment operating income (loss) is the measure of segment profit or loss that is most consistent with GAAP and is used by the CODM to evaluate segment results, allocate resources, and monitor performance against the annual budget and forecasts. The CODM considers forecast-to-actual variances on a monthly basis using this measure for each segment when making decisions about allocating capital and personnel. In addition, the CODM uses net sales to compare segment performance and in the compensation of certain employees.
The Company does not present segment asset information as such information is not provided to the CODM and accordingly, asset information is not used in assessing segment performance.
20
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
Selected segment information for the three and six months ended April 30, 2026 and 2025 was as follows (in thousands):
Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total
Three Months Ended April 30, 2026
Net sales $ 203,019 $ 164,949 $ 103,913 $ (9,514) 462,367
Cost of sales (excluding depreciation and amortization) 162,392 112,881 79,017 (9,715) 344,575
Selling, general and administrative 35,763 21,664 13,889 3,116 74,432
Depreciation and amortization 11,693 7,341 5,404 212 24,650
Operating (loss) income $ (6,829) $ 23,063 $ 5,603 $ (3,127) $ 18,710
Capital expenditures $ 6,183 $ 1,987 $ 2,852 $ 6 $ 11,028
Three Months Ended April 30, 2025
Net sales $ 202,935 $ 163,967 $ 97,507 $ (11,931) $ 452,478
Cost of sales (excluding depreciation and amortization) 145,533 111,637 73,702 (9,776) 321,096
Selling, general and administrative 32,259 21,673 10,850 5,551 70,333
Restructuring charges 896 — — 40 936
Depreciation and amortization 10,361 7,437 5,437 (4,043) 19,192
Operating income (loss) $ 13,886 $ 23,220 $ 7,518 $ (3,703) $ 40,921
Capital expenditures $ 5,893 $ 5,104 $ 2,787 $ 1,136 $ 14,920
Six Months Ended April 30, 2026
Net sales $ 392,131 $ 304,749 $ 193,055 $ (18,479) $ 871,456
Cost of sales (excluding depreciation and amortization) 313,116 210,590 150,441 (19,010) 655,137
Selling, general and administrative 69,943 42,805 27,039 6,071 145,858
Depreciation and amortization 23,240 14,680 10,626 353 48,899
Operating (loss) income $ (14,168) $ 36,674 $ 4,949 $ (5,893) $ 21,562
Capital expenditures $ 11,793 $ 5,985 $ 4,485 $ 59 $ 22,322
Six Months Ended April 30, 2025
Net sales $ 387,675 $ 303,597 $ 182,545 $ (21,295) $ 852,522
Cost of sales (excluding depreciation and amortization) 296,318 209,317 142,000 (18,811) 628,824
Selling, general and administrative 65,616 40,181 22,448 8,738 136,983
Restructuring charges 7,015 — — 1,825 8,840
Depreciation and amortization 21,831 15,077 10,977 (3,953) 43,932
Operating (loss) income $ (3,105) $ 39,022 $ 7,120 $ (9,094) $ 33,943
Capital expenditures $ 10,296 $ 10,023 $ 4,261 $ 1,964 $ 26,544
The following tables reconcile our segment presentation, as previously reported in our Quarterly Report on Form 10-Q for the three months ended April 30, 2025, to the current presentation (in thousands):
21
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
NA Fenestration EU Fenestration NA Cabinet Components Tyman Unallocated Corp. & Other Total
Three Months Ended April 30, 2025
Net sales $ 151,026 $ 61,257 $ 51,237 $ 190,107 $ (1,149) $ 452,478
Cost of sales (excluding depreciation and amortization) 113,760 39,001 42,405 126,743 (813) 321,096
Selling, general and administrative 15,938 9,038 5,725 37,271 2,361 70,333
Restructuring charges — — — 936 — 936
Depreciation and amortization 4,667 2,659 3,015 8,775 76 19,192
Operating income (loss) $ 16,661 $ 10,559 $ 92 $ 16,382 $ (2,773) $ 40,921
Capital expenditures $ 6,489 $ 727 $ 1,239 5,368 $ 1,097 $ 14,920
Hardware Solutions(1) Extruded Solutions(2) Custom Solutions(3) Unallocated Corp. & Other Total
Three Months Ended April 30, 2025
Net sales $ 202,935 $ 163,967 $ 97,507 $ (11,931) $ 452,478
Cost of sales (excluding depreciation and amortization) 145,533 111,637 73,702 (9,776) 321,096
Selling, general and administrative 32,259 21,673 10,850 5,551 70,333
Restructuring charges 896 — — 40 936
Depreciation and amortization 10,361 7,437 5,437 (4,043) 19,192
Operating income (loss) $ 13,886 $ 23,220 $ 7,518 $ (3,703) $ 40,921
Capital expenditures $ 5,893 $ 5,104 $ 2,787 $ 1,136 $ 14,920
NA Fenestration EU Fenestration NA Cabinet Components Tyman Unallocated Corp. & Other Total
Six Months Ended April 30, 2025
Net sales $ 285,359 $ 109,728 $ 95,047 $ 365,783 $ (3,395) $ 852,522
Cost of sales (excluding depreciation and amortization) 220,327 69,638 81,821 259,539 (2,501) 628,824
Selling, general and administrative 32,071 16,959 10,992 71,649 5,312 136,983
Restructuring charges — — — 8,840 — 8,840
Depreciation and amortization 9,446 5,269 6,024 23,038 155 43,932
Operating income (loss) $ 23,515 $ 17,862 $ (3,790) $ 2,717 $ (6,361) $ 33,943
Capital expenditures $ 12,140 $ 1,329 $ 1,656 $ 9,456 $ 1,963 $ 26,544
Hardware Solutions(1) Extruded Solutions(2) Custom Solutions(3) Unallocated Corp. & Other Total
Six Months Ended April 30, 2025
Net sales $ 387,675 $ 303,597 $ 182,545 $ (21,295) $ 852,522
Cost of sales (excluding depreciation and amortization) 296,318 209,317 142,000 (18,811) 628,824
Selling, general and administrative 65,616 40,181 22,448 8,738 136,983
Restructuring charges 7,015 — — 1,825 8,840
Depreciation and amortization 21,831 15,077 10,977 (3,953) 43,932
Operating (loss) income $ (3,105) $ 39,022 $ 7,120 $ (9,094) $ 33,943
Capital expenditures $ 10,296 $ 10,023 $ 4,261 $ 1,964 $ 26,544
(1) The Hardware Solutions segment contains a portion of the previously reported NA Fenestration segment.
(2) The Extruded Solutions segment contains a portion of the previously reported NA Fenestration and the EU Fenestration segments.
22
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(3) The Custom Solutions segment contains a portion of the previously reported NA Fenestration and the NA Cabinet Components segments.
The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the six months ended April 30, 2026 (in thousands):
Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total
Balance as of October 31, 2025 $ 14,601 $ 180,933 $ 75,812 $ — $ 271,346
Foreign currency translation adjustment 283 2,821 300 — 3,404
Balance as of April 30, 2026 $ 14,884 $ 183,754 $ 76,112 $ — $ 274,750
We do not allocate non-operating expense or income tax expense to the reportable segments. The following table reconciles operating income as reported above to net income for the three and six months ended April 30, 2026 and 2025 (in thousands):
Three Months Ended Six Months Ended
April 30, April 30,
2026 2025 2026 2025
Operating income $ 18,710 $ 40,921 $ 21,562 $ 33,943
Interest expense (12,042) (13,940) (24,409) (28,126)
Other, net 448 (159) 6,065 1,070
Income tax expense (3,766) (6,307) (3,939) (1,257)
Net income (loss) $ 3,350 $ 20,515 $ (721) $ 5,630
23
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. Earnings Per Share
We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common shares include the weighted average of additional shares associated with the incremental effect of dilutive employee stock options, non-vested restricted stock as determined using the treasury stock method and contingent shares associated with performance share awards, if dilutive.
The computation of basic and diluted earnings per share for the three and six months ended April 30, 2026 and 2025 follows (in thousands, except per share data):
Net Income Weighted-Average Shares Per Share
Three Months Ended April 30, 2026
Basic earnings per common share $ 3,350 45,483 $ 0.07
Effect of dilutive securities:
Stock options — — —
Restricted stock awards — 161 —
Performance restricted stock units — 14 —
Diluted earnings per common share $ 3,350 45,658 $ 0.07
Three Months Ended April 30, 2025
Basic earnings per common share $ 20,515 46,483 $ 0.44
Effect of dilutive securities:
Stock options — — —
Restricted stock awards — 60 —
Performance restricted stock units — 20 —
Diluted earnings per common share $ 20,515 46,563 $ 0.44
Six Months Ended April 30, 2026
Basic and diluted loss per common share $ (721) 45,469 $ (0.02)
Six Months Ended April 30, 2025
Basic earnings per common share $ 5,630 46,753 $ 0.12
Effect of dilutive securities:
Stock options — 11 —
Restricted stock awards — 84 —
Performance restricted stock units — 20 —
Diluted earnings per common share $ 5,630 46,868 $ 0.12
We do not include equity instruments in our calculation of diluted earnings per share if those instruments would be anti-dilutive. We had anti-dilutive restricted stock award equivalents for the three and six months ended April 30, 2026 of 4,009 and 10,560, respectively, and 41,871 and 17,580 for the comparable prior year periods. Such dilution is dependent on the excess of the market price of our stock over the exercise price and other components of the treasury stock method.
24
Table of Contents
QUANEX BUILDING PRODUCTS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. New Accounting Guidance
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standards setting bodies that we adopt as of the specified effective date. We did not adopt any new accounting pronouncements during the three and six months ended April 30, 2026.
Recent Accounting Standards Not Yet Adopted
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires expanded disclosures of expense information, including the amounts of inventory purchases, employee compensation, depreciation and amortization within commonly presented expense captions during the period. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. The required disclosures as per this ASU will be first included with our annual financial statements for the year ended October 31, 2028.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes updates to the income tax disclosures related to the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The amendments should be applied prospectively, however retrospective application is permitted. This ASU is expected to result in expanded tax disclosures for our annual financial statements for the year ended October 31, 2026.
25
Table of Contents
Unless the context indicates otherwise, references to “Quanex,” the “Company,” “we,” “us,” and “our” refer to the consolidated business operations of Quanex Building Products Corporation and its subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
Certain of the statements contained in this document and in documents incorporated by reference herein, including those made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” include “forward-looking” statements as defined under the Private Securities Litigation Reform Act of 1995. Generally, the words “expect,” “believe,” “intend,” “estimate,” “anticipate,” “project,” “will,” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are statements as to matters that are not historical facts, and include statements about our plans, objectives, expectations and intentions, including (1) all statements which address future operating performance, (2) events or developments that we expect or anticipate will occur in the future, including statements relating to the Tyman Acquisition and statements relating to volume, sales, operating income, and earnings per share, and (3) statements expressing general outlook about future operating results. Forward-looking statements also include any statements relating to future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses, future prospects or business or management strategies, and the expansion and/or growth of the operations of the Company. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations. As and when made, we believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, provided, that we cannot give any assurance that such expectations will prove to be correct. However, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to the following:
•changes in foreign trade relations and associated tariffs could result in a global trade war;
•changes in energy costs and the availability of energy;
•impacts from public health issues on the economy, demand for our products or our operations, including the responses of governmental authorities to contain such public health issues;
•our ability to continue to integrate and implement our plans, forecasts, expectations, and realize anticipated synergies with respect to the Tyman business we purchased in August 2024;
•changes in market conditions, particularly in the new home construction, and residential remodeling and replacement (R&R) activity markets in the United States, United Kingdom, Germany, Italy and elsewhere;
•consolidations, restructurings, bankruptcies and reorganizations among our customers, distributors, suppliers and other participants in the building products manufacturing industry, and our inability to collect receivables;
•changes in non-pass-through raw material costs;
•changes in domestic and international economic conditions;
•changes in availability and prices of raw material including inflationary pressures and supply chain challenges, which could be exacerbated by political or global unrest;
•our ability to attract and retain skilled labor;
•changes in purchases by our principal customers;
•fluctuations in foreign currency exchange rates;
•our ability to maintain an effective system of internal controls;
•our ability to successfully implement our internal operating plans and acquisition strategies;
•our ability to successfully implement our plans with respect to information technology (IT) systems and processes;
•our ability to control costs and increase profitability;
•changes in environmental laws and regulations;
•changes in warranty obligations;
•changes in tax laws, and interpretations thereof;
•changes in interest rates;
•our ability to service our debt facilities and remain in good standing with our lenders;
•our ability to remediate any material weakness that we have identified or may identify in the future that could result in material misstatements in our financial statements;
26
Table of Contents
•changes in the availability or applicability of our insurance coverage;
•our ability to maintain good relationships with our suppliers, subcontractors, and key customers;
•potential future impairments of goodwill or our long-lived assets; and
•the resolution of litigation and other legal proceedings.
For information on additional factors that could cause actual results to differ materially, please refer to the section entitled “Item 1A. Risk Factors” within this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
About Third-Party Information
In this report, we rely on and refer to information regarding industry data obtained from market research, publicly available information, industry publications, U.S. government sources and other third parties. Although we believe this information is reliable, we cannot guarantee the accuracy or completeness of the information and have not independently verified it.
27
Table of Contents