What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-03-11 compared with 2024-09-06 · 285 added, 306 removed, 539 unchanged (52% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 49,982 $ 97,744

Restricted cash 5,486 5,251

Accounts receivable, net of allowance for credit losses of $ 948 and $ 254

7 unchanged sentences

Operating lease right-of-use assets 125,002 126,715

Deferred income tax assets 3,709 3,845

Goodwill 569,688 574,711

12 unchanged sentences

Noncurrent operating lease liabilities 115,517 117,560

Deferred income taxes 27,438 29,133

Deferred income taxes liabilities 162,846 162,304

Other liabilities 16,001 19,113

17 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Three Months Ended

(In thousands, except per share amounts)

3 unchanged sentences

Selling, general and administrative 66,650 32,363

Restructuring charges 7,904 —

Depreciation and amortization 24,740 11,152

Operating income 23,442 37,463 51,996 71,202

Operating (loss) income ( 6,978 ) 7,917

Non-operating (expense) income:

1 unchanged sentence

Other, net 1,229 1,042

Income before income taxes 32,038 35,797 59,620 65,222

Income tax expense ( 6,688 ) ( 4,099 ) ( 12,644 ) ( 10,103 )

Net income $ 25,350 $ 31,698 $ 46,976 $ 55,119

Basic earnings per common share $ 0.77 $ 0.97 $ 1.43 $ 1.68

Diluted earnings per common share $ 0.77 $ 0.96 $ 1.42 $ 1.67

(Loss) income before income taxes ( 19,935 ) 7,891

Income tax benefit (expense) 5,050 ( 1,642 )

Net (loss) income $ ( 14,885 ) $ 6,249

Basic (loss) earnings per common share $ ( 0.32 ) $ 0.19

Diluted (loss) earnings per common share $ ( 0.32 ) $ 0.19

Weighted-average common shares outstanding:

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Three Months Ended

(In thousands)

Net income 25,350 31,698 $ 46,976 $ 55,119

Net (loss) income $ ( 14,885 ) $ 6,249

Other comprehensive income:

Foreign currency translation gain, net of tax 4,500 3,078 8,010 17,532

Other comprehensive income, net of tax 4,500 3,078 8,010 17,532

Comprehensive income $ 29,850 $ 34,776 $ 54,986 $ 72,651

Foreign currency translation (loss) gain, net of tax ( 15,951 ) 6,081

Other comprehensive (loss) income, net of tax ( 15,951 ) 6,081

Comprehensive (loss) income $ ( 30,836 ) $ 12,330

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

(In thousands)

Operating activities:

Net income $ 46,976 $ 55,119

Net (loss) income $ ( 14,885 ) $ 6,249

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

2 unchanged sentences

Deferred income tax 2,851 1,136

Gain on deal contingent foreign exchange forward currency contract

Other, net 6,173 1,790

1 unchanged sentence

Decrease in accounts receivable 30,330 18,147

(Increase) decrease in inventory ( 183 ) 23,864

Decrease (increase) in other current assets 1,646 ( 439 )

Increase in inventory ( 8,602 ) ( 8,756 )

Increase in other current assets ( 8,985 ) ( 1,680 )

Decrease in accounts payable ( 16,548 ) ( 19,044 )

Increase (decrease) in accrued liabilities 948 ( 5,152 )

Decrease (increase) in income taxes receivable 6,659 ( 3,534 )

Increase in deferred pension benefits — 22

Increase in other long-term liabilities 707 609

Decrease in accrued liabilities ( 22,558 ) ( 7,181 )

(Decrease) increase in income taxes payable ( 5,087 ) 264

(Decrease) increase in other long-term liabilities ( 247 ) 852

Other, net ( 594 ) 342

Cash provided by operating activities 83,333 102,559

Cash (used for) provided by operating activities ( 12,510 ) 3,854

Investing activities:

Business acquisition — ( 91,302 )

Capital expenditures ( 11,624 ) ( 9,580 )

9 unchanged sentences

Purchase of treasury stock ( 3,698 ) —

Cash (used for) provided by financing activities ( 25,456 ) 26,687

Effect of exchange rate changes on cash and cash equivalents 935 2,482

Increase in cash and cash equivalents 35,492 18,159

Cash and cash equivalents at beginning of period 58,474 55,093

Cash and cash equivalents at end of period $ 93,966 $ 73,252

Cash used for financing activities ( 21,972 ) ( 9,117 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1,590 ) 760

Decrease in cash, cash equivalents and restricted cash ( 47,527 ) ( 14,052 )

Cash, cash equivalents and restricted cash at beginning of period 102,995 58,474

Cash, cash equivalents and restricted cash at end of period $ 55,468 $ 44,422

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Nine Months Ended July 31, 2024 Common

Three Months Ended January 31, 2025 Common

Stock Additional

5 unchanged sentences

Balance at October 31, 2024 $ 513 $ 701,008 $ 430,405 $ ( 46,428 ) $ ( 74,752 ) $ 1,010,746

Net income — — 6,249 — — 6,249

Net loss — — ( 14,885 ) — — ( 14,885 )

Foreign currency translation adjustment — — — ( 15,951 ) — ( 15,951 )

1 unchanged sentence

— — ( 3,812 ) — — ( 3,812 )

Purchase of treasury stock — — — — ( 3,698 ) ( 3,698 )

Stock-based compensation activity:

5 unchanged sentences

Balance at January 31, 2025 $ 512 $ 697,358 $ 411,708 $ ( 62,379 ) $ ( 75,083 ) $ 972,116

Net income — — 15,377 — — 15,377

Foreign currency translation adjustment — — — ( 2,571 ) — ( 2,571 )

Common dividends ($ 0.08 per share)

— — ( 2,649 ) — — ( 2,649 )

Stock-based compensation activity:

Expense related to stock-based compensation — 782 — — — 782

Stock options exercised — 5 — — 149 154

Balance at April 30, 2024 $ 371 $ 249,502 $ 425,650 $ ( 34,631 ) $ ( 74,770 ) $ 566,122

Net income — — 25,350 — — 25,350

Foreign currency translation adjustment — — — 4,500 — 4,500

Common dividends ($ 0.08 per share)

— — ( 2,649 ) — — ( 2,649 )

Stock-based compensation activity:

Expense related to stock-based compensation — 794 — — — 794

Stock options exercised — 1 — — 18 19

Balance at July 31, 2024 $ 371 $ 250,297 $ 448,351 $ ( 30,131 ) $ ( 74,752 ) $ 594,136

Nine Months Ended July 31, 2023 Common

Three Months Ended January 31, 2024 Common

Stock Additional

16 unchanged sentences

Balance at January 31, 2024 $ 371 $ 248,715 $ 412,922 $ ( 32,060 ) $ ( 74,919 ) $ 555,029

Net income — — 21,512 — — 21,512

Foreign currency translation adjustment — — — 3,082 — 3,082

Common dividends ($ 0.08 per share)

— — ( 2,659 ) — — ( 2,659 )

Purchase of treasury stock — — — — ( 5,593 ) ( 5,593 )

Stock-based compensation activity:

Expense related to stock-based compensation — 719 — — — 719

Other — ( 22 ) — — — ( 22 )

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

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

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

2 unchanged sentences

Nature of Operations and Basis of Presentation

Quanex Building Products Corporation is a global, publicly traded manufacturing company primarily serving original equipment manufacturers (OEMs) in the fenestration, cabinetry, solar, refrigeration and outdoor products markets.

Quanex Building Products Corporation is a leading manufacturer and component supplier to original equipment manufacturers (OEMs) in various industries, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets.

These components can be categorized as window and door (fenestration) components and kitchen and bath cabinet components.

Examples of fenestration components include:

(1) energy-efficient flexible insulating glass spacers, (2) extruded vinyl profiles, (3) window and door screens, and (4) precision-formed metal and wood products.

(1) energy-efficient flexible insulating glass spacers, (2) extruded vinyl profiles, (3) window and door screens, (4) window and door hardware, and (5) precision-formed metal and wood products.

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 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.

For additional discussion of our reportable business segments, see Note 13, “Segment Information.” We use low-cost, short lead-time production processes and engineering expertise to provide our customers with specialized products for their specific window, door, and cabinet applications.

We believe these capabilities provide us with unique competitive advantages.

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 plants in the U.K.

and Germany, as well as through sales and marketing efforts in other countries.

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

We have organized our business into four reportable business segments:

(1) North American Fenestration (NA Fenestration), (2) European Fenestration (EU Fenestration), (3) North American Cabinet Components (NA Cabinet Components), and (4) Tyman, which was acquired on August 1, 2024.

For additional discussion of our reportable business segments, see Note 14, “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.

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.

2 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

These financial statements have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

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.

13 unchanged sentences

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 probable.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Performance obligations

1 unchanged sentence

Our performance obligations include product sales, with each product included in a customer contract being recognized as a separate performance obligation.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For contracts with multiple performance obligations, the standalone selling price of each product is generally readily observable.

12 unchanged sentences

Disaggregation of revenue

We produce a wide variety of products that are used in the fenestration industry, including window spacer systems;

extruded vinyl products;

metal fabricated products;

and astragals, thresholds and screens.

In addition, we produce certain non-fenestration products, including kitchen and bath cabinet doors and components, flooring and trim moldings, solar edge tape, plastic decking, fencing, water retention barriers, conservatory roof components, and other products.

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 months ended January 31, 2025 and 2024, categorized by segment, to depict 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 14, “Segment Information.”

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our product sales for the three and nine months ended July 31, 2024 and 2023 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 13, “Segment Information.”

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Three Months Ended

(In thousands)

North American Fenestration:

NA Fenestration:

United States - fenestration $ 100,429 $ 111,634

3 unchanged sentences

$ 134,333 $ 147,995

European Fenestration:

EU Fenestration:

International - fenestration $ 42,056 $ 41,751

1 unchanged sentence

$ 48,471 $ 49,437

North American Cabinet Components:

NA Cabinet Components:

United States - fenestration $ 3,452 $ 3,675

2 unchanged sentences

$ 43,810 $ 43,137

United States - fenestration $ 105,591 $ —

International - fenestration 69,282 —

United States - non-fenestration 785 —

International - non-fenestration 18 —

$ 175,676 $ —

Unallocated Corporate & Other

11 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 three and nine months ended July 31, 2024 of was $ 0.3 million and $ 0.8 million, respectively, and $ 0.3 million and $ 0.9 million for the comparable prior year periods.

N et sales include transactions with a customer which is a related party with one of our non-employee directors for the three months ended January 31, 2025 was $ 0.5 million and $ 0.2 million for the comparable prior year period.

Purchases from a customer which is a related party with one of our non-employee directors for the three months ended January 31, 2025 was $ 0.2 million and zero 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.

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On November 1, 2022, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with LMI Custom Mixing, LLC (“LMI”) and the equity owners of LMI, Lauren International, Ltd.

and Meteor-US-Beteiligungs GMBH.

Under the Purchase Agreement, we acquired substantially all of the operating assets comprising LMI’s polymer mixing and rubber compound production business (collectively, the “Purchased Assets”) and also agreed to assume certain liabilities relating to the Purchased Assets (collectively, the “LMI Acquisition”).

As consideration for the Purchased Assets, we paid $ 91.3 million in cash utilizing funds borrowed under our Credit Facility.

In connection with the LMI 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.

Inventories consisted of the following at July 31, 2024 and October 31, 2023 (in thousands):

Restructuring

We accrue one-time severance costs pursuant to an approved plan of restructuring at the communication date, when affected employees have been formally notified and the severance arrangement is legally enforceable, with no realistic possibility of withdrawal.

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.

In November 2024, we announced a reorganization of our business to integrate the acquisition of Tyman plc with our legacy Quanex operations.

For additional discussion of our acquisition of Tyman plc, see Note 2, “Acquisition.”

During the three months ended January 31, 2025, we incurred $ 7.9 million in restructuring charges as a result of the reorganization, including $ 4.0 million related to workforce alignment costs, primarily severance and employee-related expenses.

As of January 31, 2025, we have paid $ 2.0 million in workforce alignment costs, with a remaining accrual of $ 2.0 million.

Additionally, we recognized $ 3.9 million related to the disposal of software which no longer supports our reorganized business.

As we continue to implement our restructuring plan, we may incur additional restructuring charges in future periods as we assess and finalize our integration efforts.

The nature and amount of any such charges will depend on further developments in the reorganization process.

On August 1, 2024, we completed the acquisition of Tyman plc (the “Tyman Acquisition”), a company incorporated in England and Wales (“Tyman”).

The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised 14,139,477 newly issued Quanex common shares (“New Quanex Shares”) and cash consideration of approximately $ 504.1 million (being the Pound Sterling amount of cash consideration of £ 392.2 million in respect of all of the Tyman Shares converted to U.S.

Dollars at an exchange rate of 1.2855 ).

New Quanex Shares issued in connection with the Tyman Acquisition on the New York Stock Exchange took effect on August 2, 2024 and Tyman’s shares on the London Stock Exchange were canceled.

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) provided for a senior secured term loan A facility in an aggregate principal amount of $ 500 million (the “Term Loan 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.

The maturity date of the Facilities is five years after the acquisition effective date, maturing on August 1, 2029.

As of January 31, 2025, we are still determining the purchase price allocation for the Tyman Acquisition.

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, inventory, and deferred income taxes, during the measurement period, which may extend up to one year from the acquisition date.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of Date of

Opening Balance Sheet

(In thousands)

Net assets acquired:

Accounts receivable $ 99,574

Inventories 211,617

Prepaid and other assets 21,516

Property, plant and equipment 157,981

Operating lease right-of-use assets 65,414

Goodwill 385,045

Intangible assets 539,285

Accounts payable ( 66,769 )

Accrued liabilities ( 41,958 )

Long-term debt ( 300,684 )

Operating lease liabilities ( 66,228 )

Deferred income taxes ( 145,677 )

Other liabilities ( 10,502 )

Net assets acquired $ 848,614

Consideration:

Total consideration, net of cash and cash equivalents $ 848,614

We used recognized valuation techniques to determine the preliminary fair value of the assets and liabilities, including the multi period excess earnings method for customer relationships and relief from royalty method for trade names and other technology with a discount rate that reflects the risk of the expected future cash flows.

Tyman is allocated entirely to our Tyman reportable operating segment .

For additional discussion of our reportable business segments, see Note 14, “Segment Information.”

Pro Forma Results

We calculated the pro forma impact of the Tyman acquisition and the associated debt financing on our operating results for the three months ended and January 31, 2024 .

The following pro forma results give effect to these acquisitions, assuming the transaction occurred on November 1, 2023.

Three Months Ended

January 31, 2024

(In thousands, except per share amounts)

Net sales $ 426,533

Net income $ 14,928

Basic earnings per share $ 0.32

Diluted earnings per share $ 0.32

We derived the pro forma results for the Tyman acquisition based on historical financial information obtained from the sellers and certain management assumptions.

Our Tyman pro forma adjustments relate to the impact of preliminary fair value adjustments on the underlying assets and liabilities of Tyman, transaction costs and the financing of the Tyman Acquisition, and the conversion of Tyman’s financial information prepared in accordance with IFRS to Quanex accounting policies in accordance with U.S.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Inventories consisted of the following at January 31, 2025 and October 31, 2024 (in thousands):

2025 October 31,

29 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The table below presents the lease-related assets and liabilities recorded on the balance sheet at July 31, 2024 and October 31, 2023 (in thousands):

Leases Classification July 31,

The table below presents the lease-related assets and liabilities recorded on the balance sheet at January 31, 2025 and October 31, 2024 (in thousands):

Leases Classification January 31,

2025 October 31,

8 unchanged sentences

Total lease liabilities $ 188,037 $ 190,711

The table below presents the components of lease costs for the three and nine months ended July 31, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

The table below presents the components of lease costs for the three months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

Operating lease cost

4 unchanged sentences

Variable lease costs

523 420 1,461 1,210

Total lease cost $ 7,947 $ 4,375

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The table below presents supplemental cash flow information related to leases for the nine months ended July 31, 2024 and 2023 (in thousands):

Nine Months Ended

The table below presents supplemental cash flow information related to leases for the three months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

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

5 unchanged sentences

Finance leases $ 16 $ 252

The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of July 31, 2024 and October 31, 2023:

The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of January 31, 2025 and October 31, 2024:

2025 October 31,

5 unchanged sentences

Financing leases 4.85 % 4.52 %

The table below presents the maturity of the lease liabilities as of July 31, 2024 (in thousands):

The table below presents the maturity of the lease liabilities as of January 31, 2025 (in thousands):

Operating Leases Finance Leases

2024 (remaining three months) $ 2,341 $ 1,379

2025 (remaining nine months) $ 14,740 $ 4,891

2026 18,845 6,443

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Property, Plant and Equipment

Property, plant and equipment consisted of the following as of January 31, 2025 and October 31, 2024 (in thousands):

2025 October 31,

Land and land improvements $ 16,096 $ 99,068

Buildings and building improvements 194,829 186,087

Machinery and equipment 491,617 462,628

Construction in progress 51,777 46,534

Property, plant and equipment, gross 754,319 794,317

Accumulated depreciation 363,201 391,851

Property, plant and equipment, net $ 391,118 $ 402,466

Depreciation expense for the three months ended January 31, 2025 of $ 13.9 million and $ 7.9 million for the comparable prior year period.

The reported balances of our property, plant and equipment as of January 31, 2025 have been updated to incorporate reclassifications of balances between categories of assets and between gross and accumulated depreciation values.

These reclassifications are immaterial to the current and prior period financial statements.

If there are indicators of potential impairment, we evaluate our property, plant and equipment for recoverability over the remaining useful lives of the assets.

We did not incur impairment losses associated with these assets for the periods ended January 31, 2025 and October 31, 2024.

Goodwill and Intangible Assets

The change in the carrying amount of goodwill for the nine months ended July 31, 2024 was as follows (in thousands):

Nine Months Ended

July 31, 2024

The change in the carrying amount of goodwill for the three months ended January 31, 2025 was as follows (in thousands):

Three Months Ended

January 31, 2025

Beginning balance as of November 1, 2024 $ 574,711

1 unchanged sentence

Balance as of the end of the period $ 569,688

At our last annual test date, August 31, 2023, 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.

We evaluated for indicators of impairment for all reporting units during the three and nine months ended July 31, 2024 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 13, “Segment Information.”

At our last annual test date, August 31, 2024, we evaluated the recoverability of goodwill at each of our seven reporting units with goodwill balances and determined that our goodwill was no t impaired.

We evaluated for indicators of impairment for all reporting units during the three months ended January 31, 2025 and determined that there were no triggering events.

For additional information and discussion of change in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Identifiable Intangible Assets

Amortizable intangible assets consisted of the following as of July 31, 2024 and October 31, 2023 (in thousands):

July 31, 2024 October 31, 2023

Amortizable intangible assets consisted of the following as of January 31, 2025 and October 31, 2024 (in thousands):

January 31, 2025 October 31, 2024

Gross Carrying

6 unchanged sentences

Total $ 773,371 $ 193,290 $ 780,729 $ 182,820

We had aggregate amortization expense related to intangible assets for the three and nine months ended July 31, 2024 of $ 2.8 million and $ 9.0 million, respectively, and $ 3.0 million and $ 9.1 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, 2024 (in thousands):

We had aggregate amortization expense related to intangible assets for the three months ended January 31, 2025 of $ 10.6 million and $ 3.2 million for the comparable prior year period.

Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of January 31, 2025 (in thousands):

Amortization Expense

2024 (remaining three months) $ 2,797

2025 (remaining nine months) $ 29,155

Thereafter 406,588

Total $ 580,081

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Debt and Finance Lease Obligations

Long-term debt consisted of the following at July 31, 2024 and October 31, 2023 (in thousands):

Long-term debt consisted of the following at January 31, 2025 and October 31, 2024 (in thousands):

2025 October 31,

Term Loan A Facility 487,500 493,750

Revolving Credit Facility 217,500 222,500

4 unchanged sentences

Long-term debt $ 725,231 $ 737,198

Credit Agreement

On August 1, 2024, we completed our previously announced acquisition (the “Tyman Acquisition”) of Tyman plc, a company incorporated in England and Wales (“Tyman”).

Revolving Credit Facility and Term A Facility

The Amended Credit Agreement did not become effective until August 1, 2024 upon the completion the Tyman Acquisition.

For further information regarding the Tyman Acquisition and the Amended Credit Agreement, refer to Note 16, “Subsequent Events.”

On July 6, 2022, we entered into our Existing Credit Agreement with Wells Fargo Securities, LLC, as Agent, Swingline Lender and Issuing Lender, and BofA Securities, Inc.

serving as Syndication Agent.

We capitalized $ 1.2 million of deferred financing fees related to the Credit Facility .

This $ 325.0 million revolving credit facility has a five -year term, maturing on July 6, 2027, and replaces our previous credit facility.

Interest payments for the Existing Credit Agreement are calculated, at our election and depending upon the Consolidated Net Leverage Ratio, at a Base Rate (as defined within the Existing Credit Agreement) plus an applicable margin or at the same rate as Risk-Free Rate (“RFR”) Loans for domestic borrowings or Eurocurrency Rate Loans plus an applicable margin.

In addition, we are subject to commitment fees for the unused portion of the Existing Credit Agreement.

The Amended Credit Agreement did not become effective until August 1, 2024 upon the completion of the Tyman Acquisition.

Our previous credit facility is more fully described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 .

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”).

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

The applicable margin and commitment fees are outlined in the following table:

Pricing Level Consolidated Net Leverage Ratio Commitment Fee Eurocurrency Rate Loans and RFR Loans Base Rate Loans

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 %

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In the event of default, outstanding borrowings would 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 Existing Credit Agreement provides for incremental revolving credit commitments for a minimum principal amount of $ 10.0 million, up to an aggregate amount of $ 150.0 million or 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 Existing Credit Agreement.

The Existing Credit Agreement contains a:

The Amended Credit Agreement provides for incremental revolving credit commitments for a minimum principal amount 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 Amended Credit Agreement.

The Amended Credit Agreement contains a:

(1) 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) 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 Existing Credit Agreement also limits our ability to enter into certain business transactions, such as to incur indebtedness or liens, to acquire businesses or dispose of material assets, make

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

restricted payments, pay dividends (limited to $ 25.0 million per year) and other transactions as further defined in the Existing Credit Agreement.

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 Amended Credit Agreement.

Some of these limitations, however, do not take effect so long as Consolidated Net Leverage Ratio 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, are used as collateral for the Existing Credit Agreement.

As of July 31, 2024, we had no borrowings outstanding under the Existing Credit Agreement , unamortized debt issuance costs of $0.9 million, $ 3.7 million of outstanding letters of credit and $ 55.0 million outstanding primarily under finance leases and other debt.

We had $ 321.3 million available for use under the Existing Credit Agreement at July 31, 2024.

Our weighted-average borrowing rate for borrowings outstanding during the nine months ended July 31, 2024 and 2023 was 6.69 % and 5.91 %, respectively.

We were in compliance with our debt covenants as of July 31, 2024.

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

As of January 31, 2025, we had $ 705.0 million borrowings outstanding under the Facilities, unamortized debt issuance costs of $ 13.2 million, $ 6.0 million of outstanding letters of credit and $ 59.3 million outstanding primarily under finance leases and other debt.

We had $ 251.5 million available for use under the Facilities at January 31, 2025.

The borrowings outstanding as of January 31, 2025 under the Facilities accrue interest at 6.91 % per annum, and our weighted-average borrowing rate for borrowings outstanding during the three months ended January 31, 2025 and 2024 was 6.85 % and 6.69 %, respectively.

We were in compliance with our debt covenants as of January 31, 2025.

Retirement Plans

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

During the year ended October 31, 2023, we terminated our defined contribution plan and settled the obligation during the three months ended October 31, 2023.

The net periodic pension (benefit) cost for this plan for the three and nine months ended July 31, 2024 and 2023 was as follows (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Service cost $ — $ 95 $ — $ 287

Interest cost — 390 — 1,169

Expected return on plan assets — ( 366 ) — ( 1,099 )

Amortization of net loss — 11 — 32

Settlement reimbursement — — ( 903 ) —

Net periodic pension (benefit) cost $ — $ 130 $ ( 903 ) $ 389

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 July 31, 2024 and October 31, 2023, our liability under the supplemental benefit plan was approximately zero and $ 2.0 million, respectively.

During the year ended October 31, 2023, the supplemental benefit plan was terminated.

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

As of July 31, 2024 and October 31, 2023, the liability associated with the deferred compensation plan was approximately $ 4.9 million and $ 3.9 million, respectively.

We maintain a non-qualified deferred compensation plan covering members of the Board of Directors and certain key employees.

As of January 31, 2025 and October 31, 2024, the liability associated with the deferred compensation plan was approximately $ 4.2 million and $ 4.7 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.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

To determine our income tax expense or benefit for interim periods, consistent with accounting standards, we apply the estimated annual effective income tax rate t o 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 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 nine months ended July 31, 2024 and 2023 were 21.2 % and 18.2 %, respectively.

Our estimated annual effective tax rates from continuing operations for the three months ended January 31, 2025 and 2024 were 25.3 % and 20.8 %, respectively.

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

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tax rate differential and other permanent differences.

The primary discrete items affecting the 2024 effective rate were the benefit of $ 0.4 million related to the vesting or exercise of equity-based compensation awards and a charge of $ 0.7 million related to the true up of the deferred tax rate.

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.

As of July 31, 2024, our liability for uncertain tax positions (UTP) of $ 0.3 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.

We include all interest and penalties related to uncertain tax benefits within our income tax provision account.

To the extent interest

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

and penalties are not assessed with respect to uncertain tax positions or the uncertainty of deductions in the future, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

The primary discrete items affecting the 2025 effective rate were the benefit of $ 0.4 million related to the vesting or exercise of equity-based compensation awards.

The primary discrete item affecting the 2024 effective rate were the benefit of $ 0.4 million related to the vesting or exercise of equity-based compensation awards, and a charge of $ 0.6 million related to the true up of the deferred tax rate.

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 $ 0.6 million as of July 31, 2024 and October 31, 2023, respectively.

We maintain a valuation allowance for certain state net operating losses which totaled $ 0.8 million as of January 31, 2025 and October 31, 2024, respectively.

We also maintain a valuation allowance for capital losses which totaled $ 3.3 million a s of January 31, 2025 and October 31, 2024, respectively .

Contingencies

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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.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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).

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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

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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.

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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 July 31, 2024, and October 31, 2023 (Level 2 measurement).

On May 2, 2024, we entered into a deal contingent foreign exchange forward currency contract to manage our exposure to foreign currency exchange rate fluctuations against the USD and GBP for approximately $ 605 million, as part of the $ 1.1 billion purchase consideration for the Tyman Acquisition.

Our deal contingent forward contract is adjusted to fair value by recording gains and losses to “Other, net,” and we record the related asset to “Other Current Assets” in the accompanying condensed consolidated statement of income and condensed consolidated balance sheets, respectively.

During the three months ended July 31, 2024, we recognized a gain of $ 9.2 million related to this foreign exchange forward currency contract and the contract was concluded in August 2024 as a result of the completion of the Tyman Acquisition.

The value of our foreign exchange forward currency contract fluctuated based on exchange rate fluctuations against the USD and GBP (Level 2 measurement).

For further information regarding the Tyman Acquisition, refer to Note 16, “Subsequent Events.”

As a result, the fair value of our debt instrument approximates carrying value at January 31, 2025, and October 31, 2024 (Level 2 measurement).

As of January 31, 2025, we have 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 $ 8.3 million, and foreign currency exposures against the Mexican Peso (“MXN”) to USD, with a notional principal amount of $ 18.0 million.

Hedge accounting is not applied to our forward exchange contracts.

These contracts have a range of maturities up to May 19, 2025.

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 condensed consolidated statement of income and condensed consolidated balance sheets, respectively.

During the three months ended January 31, 2025 and 2024, we recognized a net gain of $ 0.1 million and zero , respectively, related to our forward foreign exchange contracts.

The value of our forward foreign exchange contracts fluctuates based on exchange rate fluctuations against the USD to GBP, and the MXN to USD (L evel 2 measurements).

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).

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

A summary of non-vested restricted stock awards activity during the nine months ended July 31, 2024 is presented below:

A summary of non-vested restricted stock awards activity during the three months ended January 31, 2025 is presented below:

Restricted Stock Awards Weighted-Average

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Granted 101,700 29.75

Forfeited ( 11,800 ) 22.30

Vested ( 84,100 ) 22.95

Non-vested at July 31, 2024 236,800 $ 25.85

The total weighted-average grant-date fair value of restricted stock awards that vested during each of the nine months ended July 31, 2024 and 2023 was $ 1.4 million and $ 1.0 million, respectively.

As of July 31, 2024, total unrecognized compensation cost related to unamortized restricted stock awards was $ 3.0 million.

Non-vested at January 31, 2025 254,400 $ 28.37

The total weighted-average grant-date fair value of restricted stock awards that vested during each of the three months ended January 31, 2025 and 2024 was $ 1.9 million and $ 1.4 million, respectively.

As of January 31, 2025, total unrecognized compensation cost related to unamortized restricted stock awards was $ 4.8 million.

We expect to recognize this expense over the remaining weighted-average vesting period of 2.3 years.

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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, 2024.

The following table summarizes our stock option activity for the nine months ended July 31, 2024:

The following table summarizes our stock option activity for the three months ended January 31, 2025:

Stock Options Weighted-Average

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Exercised ( 9,300 ) 19.97

Outstanding at July 31, 2024 78,250 $ 19.45 1.7 $ 1,092

Vested at July 31, 2024 78,250 $ 19.45 1.7 $ 1,092

Exercisable at July 31, 2024 78,250 $ 19.45 1.7 $ 1,092

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 nine months ended July 31, 2024 and 2023 was $ 0.4 million and $ 0.3 million, respectively.

Outstanding at January 31, 2025 68,950 $ 19.38 1.3 $ 112

Vested at January 31, 2025 68,950 $ 19.38 1.3 $ 112

Exercisable at January 31, 2025 68,950 $ 19.38 1.3 $ 112

Intrinsic va lue 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 three months ended January 31, 2025 and 2024 was $ 0.1 million and $ 0.2 million, respectively.

Restricted Stock Units

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the nine months ended July 31, 2024 and 2023, non-employee directors received 26,215 and 38,704 restricted stock units, respectively, at a weighted-average grant date fair value of $ 26.70 per share and $ 20.67 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, 2024, we paid $ 0.6 million and $ 0.4 million for the comparable prior year to settle vested restricted stock units.

During the three months ended January 31, 2025 and 2024, non-employee directors received 28,240 and 26,215 restricted stock units, respectively, at a weighted-average grant date fair value of $ 29.02 per share and $ 20.67 per share, respectively, which vested immediately.

During the three months ended January 31, 2025 and 2024 , 39,871 and zero restricted stock units, which were awarded to key employees, vested, respectively.

During the three months ended January 31, 2025, we paid $ 1.0 million and $ 0.1 million for the comparable prior year to settle vested restricted stock units.

Performance Share Awards

We have awarded annual grants of performance shares to key employees and officers.

Performance share awards vest with return on net assets (RONA) as the vesting condition and pay out 100 % in cash, and are accounted for as liability.

The performance share awards granted in December 2022 and December 2023 vest with return on net assets (RONA) as the vesting condition and pay out 100 % in cash, and are accounted for as liability.

The performance share awards granted in December 2024 vest with adjusted earnings per share performance as the vesting condition and RONA as a performance modifier and pay out 100% in cash, and are accounted for as a liability.

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 awarded performance shares may ultimately vest.

The following table summarizes our performance share grants and the grant date fair value for the RONA performance metrics:

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 share may ultimately vest.

The following table summarizes our performance share grants and the grant date fair value for the performance metrics:

Grant Date Shares Awarded Grant Date Fair Value Shares Forfeited

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December 4, 2024 50,900 $ 29.75 —

During the nine months ended July 31, 2024 , 49,228 performance restricted stock units vested.

During the three months ended January 31, 2025 , 69,825 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 July 31, 2024, we have de emed 67,626 shares related to the December 2021 grant of performance restricted stock units as probable to vest.

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, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

As of January 31, 2025, w e have deemed 34,606 shares related to the December 2022 grant of performance restricted stock units as probable to vest.

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 months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

Restricted stock awards $ 593 $ 317

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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 nine months ended July 31, 2024.

The following table summarizes the treasury stock activity during the nine months ended July 31, 2024:

Nine Months Ended

July 31, 2024

There were no charges to retained earnings during the three months ended January 31, 2025.

The following table summarizes the treasury stock activity during the three months ended January 31, 2025:

Three Months Ended

January 31, 2025

Beginning Balance as of November 1, 2024 4,014,431

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Stock options exercised ( 9,300 )

Balance at July 31, 2024 4,014,431

Treasury stock repurchases 150,000

Balance at January 31, 2025 3,983,606

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other, net on the condensed consolidated statements of income consisted of the following for the three and nine months ended July 31, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Foreign currency transaction (losses) gains $ ( 38 ) $ 126 $ ( 94 ) $ 36

Other, net on the condensed consolidated statements of income consisted of the following for the three months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

Foreign currency transaction gains (losses) $ 172 $ ( 10 )

Foreign currency derivative gains 349 —

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Interest income 618 283

Other 12 ( 130 ) ( 261 ) ( 54 )

Other, net $ 1,229 $ 1,042

Segment Information

We present three reportable business segments (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 & conservatories, and the European insulating glass business manufacturing insulating glass spacers;

and (3) NA Cabinet Components, comprising our cabinet door and components operations.

Additionally, we maintain an 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, legal and other costs not deemed to be allocable to all segments;

depreciation of corporate assets;

interest expense;

income taxes and inter-segment eliminations;

and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process.

We present four reportable 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.

We 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 and inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process.

Other general and administrative costs associated with the corporate office are allocated to the reportable segments, based upon a relative measure of profitability in order to more accurately reflect each reportable business segment's administrative costs.

We allocate corporate expenses to businesses acquired mid-year from the date of acquisition.

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 nine month period ended July 31, 2024 was $ 6.6 million and $ 20.8 million, respectively, and $ 6.3 million and $ 17.1 million for the comparable prior year periods.

Corporate general and administrative expense allocated during the three month period ended January 31, 2025 was $ 7.9 million and $ 7.3 million for the comparable prior year period.

ASC Topic 280-10-50, “Segment Reporting” (ASC 280) permits aggregation of operating segments based on factors including, but not limited to:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Segment information for the three and nine months ended July 31, 2024 and 2023, and total assets as of July 31, 2024 and October 31, 2023 are summarized in the following table (in thousands):

NA Fenestration EU Fenestration NA Cabinet Components Unallocated Corp.

Segment information for the three months ended January 31, 2025 and 2024, and total assets as of January 31, 2025 and October 31, 2024 are summarized in the following table (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

Tyman Unallocated Corp.

& Other Total

Three Months Ended July 31, 2024

Net sales $ 170,258 $ 59,617 $ 51,448 $ ( 978 ) $ 280,345

Depreciation and amortization 5,194 2,609 3,093 57 10,953

Operating income (loss) 17,845 12,688 282 ( 7,373 ) 23,442

Capital expenditures 4,339 847 1,024 42 6,252

Three Months Ended July 31, 2023

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

Depreciation and amortization 5,033 2,434 3,084 45 10,596

Operating income (loss) 22,668 16,150 2,271 ( 3,626 ) 37,463

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

Nine Months Ended July 31, 2024

Three Months Ended January 31, 2025

Net sales $ 134,333 $ 48,471 $ 43,810 $ 175,676 $ ( 2,246 ) $ 400,044

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Capital expenditures 5,651 602 417 4,088 866 11,624

Nine Months Ended July 31, 2023

Three Months Ended January 31, 2024

Net sales $ 147,995 $ 49,437 $ 43,137 $ — $ ( 1,414 ) $ 239,155

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Capital expenditures 5,721 1,801 1,836 — 222 9,580

As of July 31, 2024

As of January 31, 2025

Total assets $ 376,388 $ 218,334 $ 143,297 $ 876,475 $ 605,995 $ 2,220,489

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Total assets $ 373,934 $ 239,501 $ 147,907 $ 1,243,265 $ 315,181 $ 2,319,788

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the nine months ended July 31, 2024 (in thousands):

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the three months ended January 31, 2025 (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

Unallocated Corp.

Tyman Unallocated Corp.

& Other Total

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Foreign currency translation adjustment — ( 2,745 ) — ( 2,278 ) — ( 5,023 )

Balance as of July 31, 2024 $ 80,105 $ 66,943 $ 39,147 $ — $ 186,195

Balance as of January 31, 2025 $ 80,105 $ 64,449 $ 39,147 $ 385,987 $ — $ 569,688

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

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 nine months ended July 31, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

July 31, July 31,

2024 2023 2024 2023

Operating income $ 23,442 $ 37,463 $ 51,996 $ 71,202

The following table reconciles operating income as reported above to net income for the three months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

Operating (loss) income $ ( 6,978 ) $ 7,917

Interest expense ( 14,186 ) ( 1,068 )

Other, net 1,229 1,042

Income tax expense ( 6,688 ) ( 4,099 ) ( 12,644 ) ( 10,103 )

Net income $ 25,350 $ 31,698 $ 46,976 $ 55,119

Income tax benefit (expense) 5,050 ( 1,642 )

Net (loss) income $ ( 14,885 ) $ 6,249

QUANEX BUILDING PRODUCTS CORPORATION

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GAAP and contingent shares associated with performance share awards, if dilutive.

Basic and diluted earnings per share for the three and nine months ended July 31, 2024 and 2023 were calculated as follows (in thousands, except per share data):

Net Income Weighted-Average Shares Per Share

Three Months Ended July 31, 2024

Basic earnings per common share $ 25,350 32,876 $ 0.77

Effect of dilutive securities:

Stock options — 29 —

Restricted stock awards — 133 —

Performance restricted stock units — 68 —

Diluted earnings per common share $ 25,350 33,106 $ 0.77

Three Months Ended July 31, 2023

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

Effect of dilutive securities:

Stock options — 33 —

Restricted stock awards — 124 —

Performance restricted stock units — 46 —

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

Nine Months Ended July 31, 2024

Basic earnings per common share $ 46,976 32,857 $ 1.43

Effect of dilutive securities:

Stock options — 34 —

Restricted stock awards — 128 —

Performance restricted stock units — 68 —

Diluted earnings per common share $ 46,976 33,087 $ 1.42

Nine Months Ended July 31, 2023

Basic and diluted earnings per share for the three months ended January 31, 2025 and 2024 were calculated as follows (in thousands, except per share data):

Net (Loss) Income Weighted-Average Shares Per Share

Three Months Ended January 31, 2025

Basic and diluted loss per common share $ ( 14,885 ) 47,015 $ ( 0.32 )

Three Months Ended January 31, 2024

Basic earnings per common share $ 6,249 32,825 $ 0.19

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We do not include equity instruments in our calculation of diluted earnings per share if those instruments would be anti-dilutive.

We had zero and 1,364 of anti-dilutive restricted stock award equivalents for the three and nine months ended July 31, 2024, respectively, and no corresponding equivalents for the comparable prior year periods .

We had 5,450 and zero of anti-dilutive restricted stock award equivalents for the three months ended January 31, 2025, respectively, and no corresponding equivalents for the comparable prior year period.

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.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 nine months ended July 31, 2024.

We did not adopt any new accounting pronouncements during the three months ended January 31, 2025.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption is permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

In November 2024, the FASB issued “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.

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We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Subsequent Events

On August 1, 2024, we completed the Tyman Acquisition of Tyman plc, a company incorporated in England and Wales (“Tyman”).

The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised of 14,139,477 newly issued Quanex common shares (“New Quanex Shares”) and cash consideration of approximately $ 504.1 million (being the Pound Sterling amount of cash consideration of £ 392.2 million in respect of all of the Tyman Shares converted to U.S.

Dollars at an exchange rate of 1.2855 ).

New Quanex Shares issued in connection with the Tyman Acquisition on the New York Stock Exchange took effect on August 2, 2024 and Tyman’s shares on the London Stock Exchange were canceled.

The Amended Credit Agreement did not become effective until August 1, 2024 upon the completion of the Tyman Acquisition.

The Amended Credit Agreement will (i) increase the senior secured revolving credit facility to an aggregate principal amount of $ 475 million (the “Revolving Credit Facility”) and (ii) provide 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 will include alternative currency, letter of credit, and swing-line sub-facilities of $ 100 million, $ 30 million, and $ 15 million, respectively.

The maturity date of the Facilities will be five years after the acquisition effective date, maturing on August 1, 2029.

In November 2023, the FASB issued “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption is permitted.

The guidance is to be applied retrospectively to 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.

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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:

• impacts from public health issues (including pandemics, such as the COVID-19 pandemic and quarantines) on the economy, demand for our products or our operations, including the responses of governmental authorities to contain such public health issues;

• 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 integrate and implement our plans, forecasts and other expectations with respect to Tyman;

• changes in market conditio ns, particularly in the new home construction, and residential remodeling and replacement (R&R) activity markets in the United States, United Kingdom, Germany and elsewhere;

• changes in foreign trade relations and associated tariffs could result in a global trade war;

• changes in non-pass-through raw material costs;

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• our ability to service our debt facilities and remain in good standing with our lenders;

• our ability to remediate our material weakness, or any other material weakness that we may identify in the future that could result in material misstatements in our financial statements;

• changes in the availability or applicability of our insurance coverage;

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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