What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-09-01 compared with 2023-06-02 · 133 added, 115 removed, 719 unchanged (26% of the section changed)

49 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Six Months Ended

April 30, April 30,

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

21 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

April 30, April 30,

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Net income $ 55,119 $ 63,669

Adjustments to reconcile net income to cash provided by (used for) operating activities:

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 31,672 30,554

12 unchanged sentences

Other, net 1,523 ( 177 )

Cash provided by (used for) operating activities 38,460 ( 1,881 )

Cash provided by operating activities 102,559 49,854

Investing activities:

6 unchanged sentences

Repayments of credit facility borrowings ( 60,000 ) ( 70,500 )

Debt issuance costs — ( 1,210 )

Repayments of other long-term debt ( 1,954 ) ( 1,301 )

3 unchanged sentences

Purchase of treasury stock ( 5,593 ) ( 6,600 )

Cash provided by financing activities 54,313 16,502

Cash provided by (used for) financing activities 26,687 ( 17,937 )

Effect of exchange rate changes on cash and cash equivalents 2,482 ( 2,594 )

Decrease in cash and cash equivalents ( 11,597 ) ( 1,161 )

Increase in cash and cash equivalents 18,159 9,969

Cash and cash equivalents at beginning of period 55,093 40,061

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended April 30, 2023 Common

Nine Months Ended July 31, 2023 Common

Stock Additional

25 unchanged sentences

Balance at April 30, 2023 $ 372 $ 250,427 $ 355,557 $ ( 34,968 ) $ ( 78,661 ) $ 492,727

Six Months Ended April 30, 2022 Common

Net income — — 31,698 — — 31,698

Foreign currency translation adjustment — — — 3,078 — 3,078

Common dividends ($ 0.08 per share)

— — ( 2,632 ) — — ( 2,632 )

Stock-based compensation activity:

Expense related to stock-based compensation — 430 — — — 430

Stock options exercised — 25 — — 629 654

Balance at July 31, 2023 $ 372 $ 250,882 $ 384,623 $ ( 31,890 ) $ ( 78,032 ) $ 525,955

Nine Months Ended July 31, 2022 Common

Stock Additional

26 unchanged sentences

Balance at April 30, 2022 $ 373 $ 250,756 $ 292,221 $ ( 36,197 ) $ ( 70,979 ) $ 436,174

Net income — — 25,908 — — 25,908

Foreign currency translation adjustment — — — ( 5,168 ) — ( 5,168 )

Common dividends ($ 0.08 per share)

— — ( 2,658 ) — — ( 2,658 )

Purchase of treasury stock — — — — ( 5,031 ) ( 5,031 )

Stock-based compensation activity:

Expense related to stock-based compensation — 583 — — — 583

Stock options exercised — 20 — — 309 329

Balance at July 31, 2022 $ 373 $ 251,359 $ 315,471 $ ( 41,365 ) $ ( 75,701 ) $ 450,137

The accompanying notes are an integral part of the financial statements.

7 unchanged sentences

We also manufacture cabinet doors and other components for OEMs in the kitchen and bathroom cabinet industry.

In addition, we provide certain other non-fenestration components and products, which include solar panel sealants, trim moldings, vinyl decking, vinyl fencing, customized compounds, water retention barriers, and conservatory roof components.

In addition, we provide certain other non-fenestration components and products, which include custom mixing, solar panel sealants, trim moldings, vinyl decking, vinyl fencing, customized compounds, water retention barriers, and conservatory roof components.

We have organized our business into three reportable business segments.

49 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our product sales for the three and six months ended April 30, 2023 and 2022 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.

The following table summarizes our product sales for the three and nine months ended July 31, 2023 and 2022 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”.

Three Months Ended Six Months Ended

April 30, April 30,

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

28 unchanged sentences

Related Parties

N et sales include transactions with a customer which is a related party with one of our non-employee directors for the six months ended April 30, 2023 of approxim ately $ 0.6 million and $ 1.1 million for the comparable prior year period .

N et sales include transactions with a customer which is a related party with one of our non-employee directors for the nine months ended July 31, 2023 of approxim ately $ 0.9 million and $ 1.6 million for the comparable prior year period .

We performed a review of these transactions, of which no single transaction or series of related transactions exceeded $ 120,000 in amount, and determined that these transactions were enacted independently of each other.

7 unchanged sentences

Subsequent to the Acquisition, we had approximately $ 215 million available for use under t he Credit Facility.

For the three and six months ended April 30, 2023, our consolidated operating results included net sales of $ 17.8 million and $ 34.2 million, respectively, and operating income of $ 1.4 million and $ 3.4 million, respectively, associated with LMI.

For the three and nine months ended July 31, 2023, our consolidated operating results included net sales of $ 19.8 million and $ 54.0 million, respectively, and operating income of $ 1.7 million and $ 5.1 million, respectively, associated with LMI.

In connection with the Acquisition, we amended our existing financ e lease with Lauren Real Estate Holding LLC for the purpose of adding an additional lease renewal option and increasing rental space by approximately 60,000 square feet of rental space which was added to the 313,595 square feet of rentable area located in Cambridge, Ohio.

As of April 30, 2023, we are still determining the purchase price allocation for LMI .

As of July 31, 2023, we are still determining the purchase price allocation for LMI .

A preliminary purchase price allocation of the fair value of the assets acquired and liabilities assumed is included in the table below.

These estimates are subject to change and will likely result in an increase or decrease in goodwill, particularly with regard to third-party valuations and our estimates of fixed assets, intangible assets, and inventory, during the measurement period, which may extend up to one year from the acquisition date.

During the three months ended April 30, 2023, we reduced both the opening balance of goodwill and consideration paid by $ 0.7 million due to the settlement of the post-closing working capital adjustment with LMI.

As of Date of

18 unchanged sentences

Pro Forma Results

We calculated the pro forma impact of the LMI acquisitions and the associated debt financing on our operating results for the three months ended April 30, 2022.

The following pro forma results give effect to these acquisitions, assuming the transactions occurred on November 1, 2021.

We calculated the pro forma impact of the LMI acquisitions and the associated debt financing on our operating results for the three and nine months ended July 31, 2022.

The following pro forma results give effect to these acquisitions, assuming the transaction occurred on November 1, 2021.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pro Forma Results

For the Three Months Ended For the Six Months Ended

April 30, 2022 April 30, 2022

Three Months Ended Nine Months Ended

July 31, 2022 July 31, 2022

(In thousands, except per share amounts)

6 unchanged sentences

In addition, we calculated the tax impact of these adjustments at a 25 % effective tax rate.

Inventories consisted of the following at April 30, 2023 and October 31, 2022 (in thousands):

Inventories consisted of the following at July 31, 2023 and October 31, 2022 (in thousands):

2023 October 31,

12 unchanged sentences

Lease commencement occurs on the date we take possession or control of the property or equipment.

Original terms for our real estate-related leases are generally between five and twenty years .

Original terms for equipment-related leases, primarily manufacturing equipment and vehicles, are generally between one and ten years .

Original terms for our real estate-related leases are generally between five years and twenty years .

Original terms for equipment-related leases, primarily manufacturing equipment and vehicles, are generally between one year and ten years .

Some of our leases also include rental escalation clauses.

7 unchanged sentences

In addition to the above costs, variable lease costs are recognized when probable and are not included in determining the present value of our lease liability.

The ROU asset is measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date and initial direct costs.

For operating leases, ROU assets are reduced over the lease term by the

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The ROU asset is measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date and initial direct costs.

For operating leases, ROU assets are reduced over the lease term by the recognized straight-line lease expense less the amount of accretion of the lease liability determined using the effective interest method.

recognized straight-line lease expense less the amount of accretion of the lease liability determined using the effective interest method.

For finance leases, ROU assets are amortized on a straight-line basis over the shorter of the useful life of the leased asset or the lease term.

2 unchanged sentences

Additionally, we monitor for events or changes in circumstances that may require a reassessment of one of our leases and determine if a remeasurement is required.

The table below presents the lease-related assets and liabilities recorded on the balance sheet at April 30, 2023 and October 31, 2022 (in thousands):

Leases Classification April 30,

The table below presents the lease-related assets and liabilities recorded on the balance sheet at July 31, 2023 and October 31, 2022 (in thousands):

Leases Classification July 31,

2023 October 31,

8 unchanged sentences

Total lease liabilities $ 102,447 $ 76,165

The table below presents the components of lease costs for the three and six months ended April 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

The table below presents the components of lease costs for the three and nine months ended July 31, 2023 and 2022 was as follows (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

9 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The table below presents supplemental cash flow information related to leases for the six months ended April 30, 2023 and 2022 was as follows (in thousands):

Six Months Ended

The table below presents supplemental cash flow information related to leases for the nine months ended July 31, 2023 and 2022 was as follows (in thousands):

Nine Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

5 unchanged sentences

Finance leases $ 25,723 $ 6,028

The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of April 30, 2023 and October 31, 2022:

April 30, 2023 October 31,

The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of July 31, 2023 and October 31, 2022:

July 31, 2023 October 31,

Weighted-average remaining lease term (in years)

4 unchanged sentences

Financing leases 4.49 % 3.78 %

The table below presents the maturity of the lease liabilities as of April 30, 2023 (in thousands):

The table below presents the maturity of the lease liabilities as of July 31, 2023 (in thousands):

Operating Leases Finance Leases

2023 (remaining six months) $ 4,626 $ 2,403

2023 (remaining three months) $ 2,352 $ 1,246

2024 8,829 4,982

9 unchanged sentences

Goodwill and Intangible Assets

The change in the carrying amount of goodwill for the six months ended April 30, 2023 was as follows (in thousands):

Six Months Ended

April 30, 2023

The change in the carrying amount of goodwill for the nine months ended July 31, 2023 was as follows (in thousands):

Nine Months Ended

July 31, 2023

Beginning balance as of November 1, 2022 $ 137,855

3 unchanged sentences

At our last annual test date, August 31, 2022, we evaluated the recoverability of goodwill at each of our five reporting units with goodwill balances and determined that our goodwill was no t impaired.

An additional reporting unit was acquired during the six months ended April 30, 2023.

We evaluated for indicators of impairment for all reporting units during the three and six months ended April 30, 2023 and determined that there were no triggering events.

An additional reporting unit was acquired during the nine months ended July 31, 2023.

We evaluated for indicators of impairment for all reporting units during the three and nine months ended July 31, 2023 and determined that there were no triggering events.

For additional discussion of change in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 12, “Segment Information.”

Identifiable Intangible Assets

Amortizable intangible assets consisted of the following as of April 30, 2023 and October 31, 2022 (in thousands):

April 30, 2023 October 31, 2022

Amortizable intangible assets consisted of the following as of July 31, 2023 and October 31, 2022 (in thousands):

July 31, 2023 October 31, 2022

Gross Carrying

6 unchanged sentences

Total $ 241,020 $ 162,403 $ 216,386 $ 151,351

In connection to the LMI Acquisition, we added gross carrying intangibles of $ 16.0 million of customer relationships, $ 3.0 million of other technology and $ 0.5 million of trade names.

We had aggregate amortization expense related to intangible assets for the three and six months ended April 30, 2023 of $ 3.0 million and $ 6.1 million, respectively, $ 3.0 million and $ 6.0 million for the comparable prior year periods.

Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of April 30, 2023 (in thousands):

In connection to the LMI Acquisition, we added gross carrying intangibles of $ 16.0 million of customer relationships, $ 3.0 million of other technology and $ 0.5 million of trade names, each with the weighted-average amortization of twenty years.

We had aggregate amortization expense related to intangible assets for the three and nine months ended July 31, 2023 of $ 3.0 million and $ 9.1 million, respectively, and $ 3.0 million and $ 9.0 million for the comparable prior year periods.

Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of July 31, 2023 (in thousands):

Amortization Expense

2023 (remaining six months) $ 5,981

2023 (remaining three months) $ 3,003

Thereafter 33,739

3 unchanged sentences

Debt and Finance Lease Obligations

Long-term debt consisted of the following at April 30, 2023 and October 31, 2022 (in thousands):

Long-term debt consisted of the following at July 31, 2023 and October 31, 2022 (in thousands):

2023 October 31,

27 unchanged sentences

Substantially all of our domestic assets, with the exception of real property, are used as collateral for the Credit Agreement.

As of April 30, 2023, we ha d $ 80.0 million of borrowings outstanding under the Credit Facility (reduced by unamortized debt issuance costs of $1.4 million), $ 5.1 million of outstanding letters of credit and $ 55.6 million outstanding primarily under finance leases and other debt.

We had $ 239.9 million available for use under the Credit Facility at April 30, 2023.

As of July 31, 2023, we ha d $ 55.0 million of borrowings outstanding under the Credit Facility (reduced by unamortized debt issuance costs of $1.3 million), $ 5.1 million of outstanding letters of credit and $ 55.8 million outstanding primarily under finance leases and other debt.

We had $ 264.9 million available for use under the Credit Facility at July 31, 2023.

QUANEX BUILDING PRODUCTS CORPORATION

1 unchanged sentence

borrowings under the Credit Facility accrue interest at 6.67 % per annum.

Our weighted-average borrowing rate for borrowings outstanding during the six months ended April 30, 2023 and 2022 was 5.71 % and 1.48 %, respectively.

We were in compliance with our debt covenants as of April 30, 2023.

Our weighted-average borrowing rate for borrowings outstanding during the nine months ended July 31, 2023 and 2022 was 5.91 % and 1.81 %, respectively.

We were in compliance with our debt covenants as of July 31, 2023.

Retirement Plans

Our non-contributory, single employer defined benefit pension plan covers certain of our employees in the U.S.

The net periodic pension cost for this plan for the three and six months ended April 30, 2023 and 2022 was as follows (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

The net periodic pension cost for this plan for the three and nine months ended July 31, 2023 and 2022 was as follows (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

4 unchanged sentences

Net periodic pension benefit $ 130 $ ( 80 ) $ 389 $ ( 239 )

During the six months ended April 30, 2022 , we made no contributions to fund our plan.

During fiscal 2023 , we do not expect to need to make a contribution to the pension plan to maintain targeted funding levels and meet minimum contribution requirements.

During the year ended October 31, 2022, we notified participants that our pension plan will be terminated effective November 1, 2022, with final settlement expected to occur in the next twelve months, depending upon the timing of I.R.S.

During the three months ended January 31, 2023, we reclassified the pension obligation of $ 3.9 million from long-term liabilities under the caption “Deferred pension benefits” to current liabilities under the caption “Accrued liabilities” in the accompanying condensed consolidated balance sheets.

During the nine months ended July 31, 2022, we made no contributions to fund our plan.

During fiscal 2023 , we may make a contribution to the pension plan equal to the remaining obligation in order to complete the plan termination that became effective November 1, 2022.

In August 2023, some participants began receiving pension settlements.

The pension obligation of $ 3.9 million is included in current liabilities under the caption “Accrued liabilities” within current liabilities as of July 31, 2023 and under the caption “Pension benefit obligations” as of October 31, 2023 in the accompanying condensed consolidated balance sheets.

We also have a supplemental benefit plan covering certain executive officers and key employees and a non-qualified deferred compensation plan covering members of the Board of Directors and certain key employees.

As of April 30, 2023 and October 31, 2022, our liability under the supplemental benefit plan was approximately $ 2.0 million and $ 1.9 million, respectively.

As of April 30, 2023 and October 31, 2022, the liability associated with the deferred compensation plan was approximately $ 3.4 million and $ 3.3 million, respectively.

As of July 31, 2023 and October 31, 2022, our liability under the supplemental benefit plan was approximately $ 2.0 million and $ 1.9 million, respectively.

During the three months ended July 31, 2023, the supplemental benefit plan was terminated.

Benefits associated with this plan will be distributed in June 2024 in accordance with Internal Revenue Service regulations.

As of July 31, 2023 and October 31, 2022, the liability associated with the deferred compensation plan was approximately $ 4.1 million and $ 3.3 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.

1 unchanged sentence

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 on equity compensation, and increase or decrease in valuation allowances on deferred tax assets.

Our annual effective tax rates from continuing operations for the six months ended April 30, 2023 and 2022 were 19.74 % and 25.20 %, respectively.

Our annual effective tax rates from continuing operations for the nine months ended July 31, 2023 and 2022 were 18.2 % and 22.2 %, respectively.

The difference between our effective income tax rate and the U.S.

2 unchanged sentences

tax rate differential and other permanent differences.

The primary discrete items affecting the 2023 effective rate was a benefit of $ 0.2 million related to the rate change on deferred taxes.

The primary discrete item affecting the 2023 effective rate was a benefit of $ 1.7 million related to a true-up of tax provision accrual to tax return filings.

The primary discrete items affecting the 2022 effective rate were the charge of $ 0.2 million related to the vesting or exercise of equity-based compensation awards and a benefit of $ 1.0 million for the true-up of our accruals and related deferred taxes from prior year filings.

As of April 30, 2023, our liability for uncertain tax positions (UTP) of $ 1.4 million relates to certain U.S.

As of July 31, 2023, our liability for uncertain tax positions (UTP) of $ 1.4 million relates to certain U.S.

federal and state tax items regarding the interpretation of tax laws and regulations, including a minimal amount of interest and penalties.

3 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of April 30, 2023, we have an income tax receivable of $ 0.6 million included in current assets under the caption “Prepaid and other current assets” in the accompanying condensed consolidated balance sheets.

As of July 31, 2023, we have an income tax receivabl e of $ 2.5 million included in current assets under the caption “Prepaid and other current assets” in the accompanying condensed consolidated balance sheets.

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 $ 0.5 million as of April 30, 2023 and October 31, 2022, respectively.

We maintain a valuation allowance for certain state net operating losses which totaled $ 0.5 million as of July 31, 2023 and October 31, 2022, respectively.

On August 16, 2022 the Inflation Reduction Act of 2022 was signed into law.

29 unchanged sentences

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, 2023, and October 31, 2022 (Level 2 measurement).

As a result, the fair value of our debt instrument approximates carrying value at July 31, 2023, and October 31, 2022 (Level 2 measurement).

Our performance share awards are marked-to-market on a quarterly basis during a three-year vesting period based on market data (Level 2 measurement).

16 unchanged sentences

Shares are generally issued from treasury stock at the time of grant.

A summary of non-vested restricted stock awards activity during the six months ended April 30, 2023 is presented below:

A summary of non-vested restricted stock awards activity during the nine months ended July 31, 2023 is presented below:

Restricted Stock Awards Weighted-Average

4 unchanged sentences

Vested ( 54,400 ) 18.49

Non-vested at April 30, 2023 256,100 $ 22.26

The total weighted-average grant-date fair value of restricted stock awards that vested during each of the six months ended April 30, 2023 and 2022 was $ 0.9 million and $ 1.2 million, respectively.

As of April 30, 2023, total unrecognized

Non-vested at July 31, 2023 242,300 $ 22.36

The total weighted-average grant-date fair value of restricted stock awards that vested during each of the nine months ended July 31, 2023 and 2022 was $ 1.0 million and $ 1.2 million, respectively.

As of July 31, 2023, total unrecognized

QUANEX BUILDING PRODUCTS CORPORATION

12 unchanged sentences

A description of the methodology for the valuation assumptions was disclosed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022.

The following table summarizes our stock option activity for the six months ended April 30, 2023:

The following table summarizes our stock option activity for the nine months ended July 31, 2023:

Stock Options Weighted-Average

5 unchanged sentences

Forfeited/Expired ( 4,000 ) 21.11

Outstanding at April 30, 2023 166,117 $ 19.34 2.6 $ 20

Vested at April 30, 2023 166,117 $ 19.34 2.6 $ 20

Exercisable at April 30, 2023 166,117 $ 19.34 2.6 $ 20

Outstanding at July 31, 2023 132,317 $ 19.33 2.2 $ 1,166

Vested at July 31, 2023 132,317 $ 19.33 2.2 $ 1,166

Exercisable at July 31, 2023 132,317 $ 19.33 2.2 $ 1,166

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.

The total intrinsic value of stock options exercised during the six months ended April 30, 2023 and 2022 was less than $ 0.1 million.

The total intrinsic value of stock options exercised during the nine months ended July 31, 2023 and 2022 was $ 0.3 million and $ 0.1 million, respectively.

Restricted Stock Units

5 unchanged sentences

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, 2023 and 2022, non-employee directors received 38,704 and 36,669 restricted stock units, respectively, at a weighted-average grant date fair value of $ 20.67 per share and $ 22.52 per share, respectively, which vested immediately.

During the six months ended April 30, 2023, 21,774 restricted stock units, which were awarded to key employees, vested.

D uring the six months ended April 30, 2023, we paid $ 0.4 million and $ 1.0 million for the comparable prior year to settle vested restricted stock units.

During the nine months ended July 31, 2023 and 2022, non-employee directors received 38,704 and 36,669 restricted stock units, respectively, at a weighted-average grant date fair value of $ 20.67 per share and $ 22.52 per share, respectively, which vested immediately.

During the nine months ended July 31, 2023, 21,774 restricted stock units, which were awarded to key employees, vested.

D uring the nine months ended July 31, 2023, we paid $ 0.4 million and $ 1.0 million for the comparable prior year to settle vested restricted stock units.

Performance Share Awards

30 unchanged sentences

December 7, 2022 51,500 $ 23.22 3,100

During the six months ended April 30, 2023 , 32,680 performance restricted stock units vested.

During the nine months ended July 31, 2023 , 32,680 performance restricted stock units vested.

The performance restricted stock units are not considered outstanding shares, do not have voting rights, and are exclud ed 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, 2023, we have de emed 27,882 shares related to the December 2020 grant of performance restricted stock units as probable to vest.

As of July 31, 2023, we have de emed 45,667 shares related to the December 2020 grant of performance restricted stock units as probable to vest.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2023 and 2022 (in thousands):

Three Months Ended Six Months Ended

April 30, 2023 April 30, 2023

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 nine months ended July 31, 2023 and 2022 (in thousands):

Three Months Ended Nine Months Ended

July 31, 2023 July 31, 2023

2023 2022 2023 2022

9 unchanged sentences

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, 2023.

The following table summarizes the treasury stock activity during the six months ended April 30, 2023:

Six Months Ended

April 30, 2023

There were no charges to retained earnings during the nine months ended July 31, 2023.

The following table summarizes the treasury stock activity during the nine months ended July 31, 2023:

Nine Months Ended

July 31, 2023

Beginning Balance as of November 1, 2022 4,081,806

3 unchanged sentences

Treasury stock repurchases 275,000

Balance at April 30, 2023 4,224,426

Balance at July 31, 2023 4,190,626

Segment Information

7 unchanged sentences

The accounting p olicies of our operating segments are the same as those used to prepare the accompanying condensed consolidated financial statements.

Corporate general and administrative expense allocated during the three and six month period ended April 30, 2023 was $ 6.1 million and $ 10.8 million, respectively, and $ 5.5 million and $ 11.3 million for the comparable prior year periods.

Corporate general and administrative expense allocated during the three and nine month period ended July 31, 2023 was $ 6.3 million and $ 17.1 million, respectively, and $ 5.8 million and $ 17.1 million for the comparable prior year periods.

QUANEX BUILDING PRODUCTS CORPORATION

7 unchanged sentences

and (6) converging long-term economic similarities.

Segment information for the three and six months ended April 30, 2023 and 2022, and total assets as of April 30, 2023 and October 31, 2022 are summarized in the following table (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

Unallocated Corp.

Segment information for the three and nine months ended July 31, 2023 and 2022, and total assets as of July 31, 2023 and October 31, 2022 are summarized in the following table (in thousands):

NA Fenestration EU Fenestration NA Cabinet Components Unallocated Corp.

& Other Total

Three Months Ended April 30, 2023

Three Months Ended July 31, 2023

Net sales $ 177,081 $ 67,889 $ 55,385 $ ( 715 ) $ 299,640

2 unchanged sentences

Capital expenditures 3,201 2,244 1,744 187 7,376

Three Months Ended April 30, 2022

Three Months Ended July 31, 2022

Net sales $ 184,744 $ 67,613 $ 72,480 $ ( 800 ) $ 324,037

2 unchanged sentences

Capital expenditures 4,166 621 916 — 5,703

Six Months Ended April 30, 2023

Nine Months Ended July 31, 2023

Net sales $ 487,036 $ 186,604 $ 163,577 $ ( 2,126 ) $ 835,091

2 unchanged sentences

Capital expenditures 11,673 5,300 5,085 392 22,450

Six Months Ended April 30, 2022

Nine Months Ended July 31, 2022

Net sales $ 509,283 $ 199,954 $ 207,711 $ ( 2,978 ) $ 913,970

2 unchanged sentences

Capital expenditures 13,103 2,827 3,488 70 19,488

As of April 30, 2023

As of July 31, 2023

Total assets $ 382,783 $ 248,404 $ 159,102 $ 57,520 $ 847,809

1 unchanged sentence

Total assets $ 279,139 $ 223,729 $ 176,154 $ 45,595 $ 724,617

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the six months ended April 30, 2023 (in thousands):

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the nine months ended July 31, 2023 (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

4 unchanged sentences

Foreign currency translation adjustment — 7,161 — — 7,161

Balance as of April 30, 2023 $ 80,105 $ 65,972 $ 39,147 $ — $ 185,224

Balance as of July 31, 2023 $ 80,105 $ 67,157 $ 39,147 $ — $ 186,409

For further details of Goodwill, see Note 5, “Goodwill & Intangible Assets,” located herewith.

2 unchanged sentences

We did not allocate non-operating loss or income tax benefit 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, 2023 and 2022 (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

The following table reconciles operating income as reported above to net income for the three and nine months ended July 31, 2023 and 2022 (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2023 2022 2023 2022

10 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Basic and diluted earnings per share for the three and six months ended April 30, 2023 and 2022 were calculated as follows (in thousands, except per share data):

Basic and diluted earnings per share for the three and nine months ended July 31, 2023 and 2022 were calculated as follows (in thousands, except per share data):

Net Income Weighted-Average Shares Per Share

Three Months Ended April 30, 2023

Three Months Ended July 31, 2023

Basic earnings per common share $ 31,698 32,716 $ 0.97

4 unchanged sentences

Diluted earnings per common share $ 31,698 32,919 $ 0.96

Three Months Ended April 30, 2022

Three Months Ended July 31, 2022

Basic earnings per common share $ 25,908 32,999 $ 0.79

4 unchanged sentences

Diluted earnings per common share $ 25,908 33,173 $ 0.78

Six Months Ended April 30, 2023

Nine Months Ended July 31, 2023

Basic earnings per common share $ 55,119 32,841 $ 1.68

4 unchanged sentences

Diluted earnings per common share $ 55,119 33,031 $ 1.67

Six Months Ended April 30, 2022

Nine Months Ended July 31, 2022

Basic earnings per common share $ 63,669 33,093 $ 1.92

6 unchanged sentences

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.

There were no anti-dilutive instruments for the three and six months ended April 30, 2023 and 2022.

There were no anti-dilutive instruments for the three and nine months ended July 31, 2023 and 2022.

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, 2023.

As of April 30, 2023, we believe the impact of any recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our condensed consolidated financial statements upon adoption.

We did not adopt any new accounting pronouncements during the three and nine months ended July 31, 2023.

As of July 31, 2023, we believe the impact of any recently issued standards that are not yet effective are either not applicable to us at this time or will not have a material impact on our condensed consolidated financial statements upon adoption.

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.

36 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements