What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-06-06 compared with 2025-03-11 · 206 added, 133 removed, 691 unchanged (33% of the section changed)

51 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

(In thousands, except per share amounts)

5 unchanged sentences

Depreciation and amortization 19,192 10,894 43,932 22,046

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

Operating income 40,921 20,637 33,943 28,554

Non-operating (expense) income:

1 unchanged sentence

Other, net ( 159 ) 4 1,070 1,046

(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

Income before income taxes 26,822 19,691 6,887 27,582

Income tax expense ( 6,307 ) ( 4,314 ) ( 1,257 ) ( 5,956 )

Net income $ 20,515 $ 15,377 $ 5,630 $ 21,626

Earnings per common share $ 0.44 $ 0.47 $ 0.12 $ 0.66

Diluted earnings per common share $ 0.44 $ 0.46 $ 0.12 $ 0.65

Weighted-average common shares outstanding:

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

(In thousands)

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

Net income $ 20,515 $ 15,377 $ 5,630 $ 21,626

Other comprehensive income:

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

Foreign currency translation gain (loss), net of tax 35,345 ( 2,571 ) 19,394 3,510

Other comprehensive income (loss), net of tax 35,345 ( 2,571 ) 19,394 3,510

Comprehensive income $ 55,860 $ 12,806 $ 25,024 $ 25,136

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands)

Operating activities:

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

Net income $ 5,630 $ 21,626

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

12 unchanged sentences

Other, net 504 557

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

Cash provided by operating activities 15,987 36,945

Investing activities:

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended January 31, 2025 Common

Six Months Ended April 30, 2025 Common

Stock Additional

17 unchanged sentences

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

Three Months Ended January 31, 2024 Common

Net income — — 20,515 — — 20,515

Foreign currency translation adjustment — — — 35,345 — 35,345

Common dividends ($ 0.08 per share)

— — ( 3,740 ) — — ( 3,740 )

Purchase of treasury stock — — — — ( 23,496 ) ( 23,496 )

Stock-based compensation activity:

Expense related to stock-based compensation — 923 — — — 923

Restricted stock awards granted — ( 43 ) — — 43 —

Balance at April 30, 2025 $ 512 $ 698,238 $ 428,483 $ ( 27,034 ) $ ( 98,536 ) $ 1,001,663

Six Months Ended April 30, 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 — — 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

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

3 unchanged sentences

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.

The majority of these components can be categorized as window and door (fenestration) components and kitchen and bath cabinet components.

Examples of fenestration components include:

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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.

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

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Three Months Ended

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

(In thousands)

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Related Parties

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.

N et sales to a customer which is a related party with one of our non-employee directors for the six months ended April 30, 2025 and 2024 was $ 1.0 million and $ 0.5 million, respectively.

Purchases from a customer which is a related party with one of our non-employee directors for the six months ended April 30, 2025 was $ 0.1 million and zero for the comparable prior year periods.

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.

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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.

During the three and six months ended April 30, 2025 , we incurred $ 0.9 million and $ 8.8 million, respectively, in restructuring charges as a result of the reorganization, including $ 0.9 million, and $ 4.9 million, respectively, related to workforce alignment costs, primarily severance and employee-related expenses.

As of April 30, 2025 , we have paid $ 3.3 million in workforce alignment costs, with a remaining accrual of $ 1.6 million.

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

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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”).

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

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.

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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”).

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 Company’s 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.

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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.

As of April 30, 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.

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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 .

We calculated the pro forma impact of the Tyman acquisition and the associated debt financing on our operating results for the three and six months ended and April 30, 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

Three Months Ended Six Months Ended

April 30, 2024 April 30, 2024

(In thousands, except per share amounts)

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Inventories consisted of the following at April 30, 2025 and October 31, 2024 (in thousands):

2025 October 31,

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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,

The table below presents the lease-related assets and liabilities recorded on the balance sheet at April 30, 2025 and October 31, 2024 (in thousands):

Leases Classification April 30,

2025 October 31,

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Total lease liabilities $ 215,323 $ 190,711

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

Three Months Ended

The table below presents the components of lease costs for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

Operating lease cost

4 unchanged sentences

Variable lease costs

1,010 487 1,461 938

Total lease cost $ 8,710 $ 4,532 $ 16,407 $ 8,903

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The table below presents supplemental cash flow information related to leases for the six months ended April 30, 2025 and 2024 (in thousands):

Six Months Ended

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

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Finance leases $ 1,143 $ 1,228

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:

The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of April 30, 2025 and October 31, 2024:

2025 October 31,

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Financing leases 4.87 % 4.84 %

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

The table below presents the maturity of the lease liabilities as of April 30, 2025 (in thousands):

Operating Leases Finance Leases

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

2025 (remaining six months) $ 11,054 $ 3,458

2026 21,497 6,857

9 unchanged sentences

Property, Plant and Equipment

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

Property, plant and equipment consisted of the following as of April 30, 2025 and October 31, 2024 (in thousands):

2025 October 31,

6 unchanged sentences

Property, plant and equipment, net $ 417,104 $ 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.

Depreciation expense, including amortization of finance leases, for the three and six months ended April 30, 2025 of $ 12.7 million and $ 26.6 million, respectively, and $ 7.9 million and $ 15.9 million for the comparable prior year periods.

The reported balances of our property, plant and equipment as of April 30, 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.

We did not incur impairment losses associated with these assets for the periods ended April 30, 2025 and October 31, 2024.

Goodwill and Intangible Assets

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

The change in the carrying amount of goodwill for the six months ended April 30, 2025 was as follows (in thousands):

Six Months Ended

April 30, 2025

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

2 unchanged sentences

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.

We evaluated for indicators of impairment for all reporting units during the three and six months ended April 30, 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.”

2 unchanged sentences

Identifiable Intangible Assets

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

January 31, 2025 October 31, 2024

Amortizable intangible assets consisted of the following as of April 30, 2025 and October 31, 2024 (in thousands):

April 30, 2025 October 31, 2024

Gross Carrying

6 unchanged sentences

Total $ 772,944 $ 205,796 $ 780,729 $ 182,820

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):

We had aggregate amortization expense related to intangible assets for the three and six months ended April 30, 2025 of $ 6.5 million and $ 17.1 million, respectively, and $ 3.0 million and $ 6.2 million for the comparable prior year periods.

During the second quarter of 2025, we recorded a one-time adjustment to amortization expense of $ 3.5 million.

Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of April 30, 2025 (in thousands):

Amortization Expense

2025 (remaining nine months) $ 29,155

2025 (remaining six months) $ 19,906

Thereafter 399,145

1 unchanged sentence

Debt and Finance Lease Obligations

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

Long-term debt consisted of the following at April 30, 2025 and October 31, 2024 (in thousands):

2025 October 31,

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Revolving Credit Facility and Term A Facility

On June 12, 2024, in connection with the Tyman Acquisition, the Company, Wells Fargo Bank, National Association (“Wells Fargo Bank”, acting as agent, swingline lender and issuing lender, the “Agent”), the other entities therein specified in the capacities therein specified, and the lenders parties thereto, entered into an amendment to the Company’s 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.

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.

principal amount of $ 500 million (the “Term A Facility” and together with the Revolving Credit Facility, the “Facilities”).

The Revolving Credit Facility includes alternative currency, letter of credit, and swing-line sub-facilities of $ 100 million, $ 30 million, and $ 15 million, respectively.

We capitalized $ 13.8 million of deferred financing fees related to the Amended Credit Agreement.

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(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.

The consolidated Net Leverage Ratio following a Permitted Acquisition, such as Tyman, must not be greater than 3.75 to 1.00 each fiscal quarter ending during the four fiscal quarter period immediately following such acquisition.

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.

1 unchanged sentence

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.

As of April 30, 2025, we had $ 723.8 million borrowings outstanding under the Facilities, $ 12.5 million of unamortized debt issuance costs, $ 6.1 million of outstanding letters of credit, and $ 61.3 million outstanding primarily under finance leases and other debt.

We had $ 226.4 million available for use under the Facilities at April 30, 2025.

The borrowings outstanding as of April 30, 2025 under the Facilities accrue interest at 6.67 % per annum, and our weighted-average borrowing rate for borrowings outstanding during the six months ended April 30, 2025 and 2024 was 6.83 % and 6.69 %, respectively.

We were in compliance with our debt covenants as of April 30, 2025.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Retirement Plans

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.

As of April 30, 2025 and October 31, 2024, the liability associated with the deferred compensation plan was approximately $ 3.9 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 three months ended January 31, 2025 and 2024 were 25.3 % and 20.8 %, respectively.

Our estimated annual effective tax rates from continuing operations for the six m onths ended April 30, 2025 and 2024 were 18.2 % and 21.6 %, 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 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.

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

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 $ 0.6 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 $ 0.8 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 .

We maintain a valuation allowance for certain state net operating losses which totaled $ 0.8 million as of April 30, 2025 and October 31, 2024, respectively.

We also maintain a valuation allowance for capital losses which totaled $ 3.3 million as of April 30, 2025 and October 31, 2024, respectively .

Contingencies

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While we believe that our product was not defective and that we would prevail in these commercial sealant product claims if taken to trial, the timing, ultimate resolution and potential impact of these claims is not currently determinable.

Nevertheless, after taking into account all currently available information, including our defenses, the advice of our counsel, and the extent and currently-expected availability of our existing insurance coverage, we believe that the eventual outcome of these commercial sealant claims will not have a material adverse effect on our overall financial condition, results of operations or cash flows, and we have not recorded any accrual with regard to these claims.

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

Nevertheless, after taking into account all currently available

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

transaction between market participants at the measurement date.

information, including our defenses, the advice of our counsel, and the extent and currently-expected availability of our existing insurance coverage, we believe that the eventual outcome of these commercial sealant claims will not have a material adverse effect on our overall financial condition, results of operations or cash flows, and we have not recorded any accrual with regard to these claims.

Fair Value Measurement of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market data developed based on the best information available in the circumstances (unobservable inputs).

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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 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.

As a result, the fair value of our debt instrument approximates carrying value at April 30, 2025, and October 31, 2024 (Level 2 measurement).

As of April 30, 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 $ 1.0 million, and foreign currency exposures against the Mexican Peso (“MXN”) to USD, with a notional principal amount of $ 10.0 million.

Hedge accounting is not applied to our forward exchange contracts.

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

These contracts have a range of maturities up to June 17, 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).

For further information, refer to Note 11, “Stock-Based Compensation - Performance Share Awards.”

During the six months ended April 30, 2025 and 2024, we recognized a net gain of $ 0.8 million and zero , respectively, related to our forward foreign exchange contracts.

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

As of April 30, 2025, we have $ 2.9 million outstanding Bonds for the Reconstruction for a Free Argentina (“BOPREAL”) issued by the Argentine Central Bank, which we record under the caption “ Prepaid and other current assets ” in the accompanying condensed consolidated balance sheets.

The BOPREAL bond subscription in Argentine Pesos (“ARS”) will settle in USD and the proceeds will be used to repay intercompany payables.

These bonds have a range of maturities up to June 30, 2025.

We estimate total proceeds of the BOPREAL bonds to be approximately $ 2.7 million after $ 0.3 million deduction of taxes and transaction fees.

The value of the BOPREAL bonds fluctuates based on exchange rate fluctuations against ARS to USD (L evel 2 measurements).

Stock-Based Compensation

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As approved by the Compensation & Management Development Committee of our Board of Directors annually, we grant a mix of restricted stock awards, performance shares and performance restricted stock units to officers, management and key employees.

We also historically granted stock options to certain officers, directors and key employees.

We also historically

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

granted stock options to certain officers, directors and key employees.

Occasionally, we may make additional grants to key employees at other times during the year.

4 unchanged sentences

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

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

A summary of non-vested restricted stock awards activity during the six months ended April 30, 2025 is presented below:

Restricted Stock Awards Weighted-Average

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Vested ( 84,100 ) 22.95

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.

Non-vested at April 30, 2025 256,700 $ 28.28

The total weighted-average grant-date fair value of restricted stock awards that vested during each of the six months ended April 30, 2025 and 2024 was $ 1.9 million and $ 1.4 million, respectively.

As of April 30, 2025, total unrecognized compensation cost related to unamortized restricted stock awards was $ 4.2 million.

We expect to recognize this expense over the remaining weighted-average vesting period of 2.1 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 three months ended January 31, 2025:

The following table summarizes our stock option activity for the six months ended April 30, 2025:

Stock Options Weighted-Average

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Exercised ( 9,300 ) 19.97

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

Outstanding at April 30, 2025 68,950 $ 19.38 1.1 $ —

Vested at April 30, 2025 68,950 $ 19.38 1.1 $ —

Exercisable at April 30, 2025 68,950 $ 19.38 1.1 $ —

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.

The total intrinsic value of stock options exercised during the six months ended April 30, 2025 and 2024 was $ 0.1 million and $ 0.4 million, respectively.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Restricted Stock Units

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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.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

During the six months ended April 30, 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 $ 20.70 per share, respectively, which vested immediately.

During the six months ended April 30, 2025 and 2024, 45,703 and zero restricted stock units, which were awarded to key employees, vested, respectively.

During the six months ended April 30, 2025, we paid $ 1.1 million and $ 0.6 million for the comparable prior year to settle vested restricted stock units awarded to key employees and $ 0.6 million to a non-employee director who retired from the Board of Directors during the six months ended April 30, 2025.

Performance Share Awards

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December 4, 2024 88,900 $ 29.75 —

March 1, 2025 3,000 $ 18.89 —

In December 2 024, 78,589 shares vested pursuant to the December 2021 grant, which were settled with a cash payment of $ 2.4 million.

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The number of shares earned is variable depending on the metric achieved, and the settlement method is 100 % in our common stock, with accrued dividends paid in cash at the time of vesting, assuming the shares had been outstanding throughout the performance period.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

To value the performance restricted stock units, we used a Monte Carlo simulation model to arrive at a grant-date fair value.

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Level 4 A-TSR less than -20% — %

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes our performance restricted stock unit grants and the grant date fair value for the A-TSR performance metric:

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December 4, 2024 50,900 $ 29.97 —

During the three months ended January 31, 2025 , 69,825 performance restricted stock units vested.

March 1, 2025 2,200 $ 18.89 —

During the six months ended April 30, 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 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

As of April 30, 2025, w e have deemed 19,786 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 and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

Restricted stock awards $ 595 $ 502 $ 1,188 $ 819

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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 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

There were no charges to retained earnings during the six months ended April 30, 2025.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the treasury stock activity during the six months ended April 30, 2025:

Six Months Ended

April 30, 2025

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

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Treasury stock repurchases 1,409,407

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

Three Months Ended

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

Balance at April 30, 2025 5,240,713

Other, net on the condensed consolidated statements of income consisted of the following for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

Foreign currency transaction losses $ ( 1,003 ) $ ( 46 ) $ ( 831 ) $ ( 56 )

Foreign currency derivative gains 486 — 835 —

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Interest income 469 189 1,087 472

Other ( 111 ) 2 ( 32 ) 6

Other, net $ ( 159 ) $ 4 $ 1,070 $ 1,046

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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 month period ended January 31, 2025 was $ 7.9 million and $ 7.3 million for the comparable prior year period.

Corporate general and administrative expense allocated during the three and six month period ended April 30, 2025 was $ 10.0 million and $ 17.9 million, respectively, and $ 6.9 million and $ 14.2 million for the comparable prior year periods.

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 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):

Segment information for the three and six months ended April 30, 2025 and 2024, and total assets as of April 30, 2025 and October 31, 2024 are summarized in the following table (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

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& Other Total

Three Months Ended January 31, 2025

Three Months Ended April 30, 2025

Net sales $ 151,026 $ 61,257 $ 51,237 $ 190,107 $ ( 1,149 ) 452,478

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Capital expenditures 6,489 727 1,239 5,368 1,097 14,920

Three Months Ended January 31, 2024

Three Months Ended April 30, 2024

Net sales $ 159,774 $ 56,583 $ 51,078 $ — $ ( 1,234 ) $ 266,201

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Capital expenditures 5,739 605 1,099 — 160 7,603

As of January 31, 2025

Six Months Ended April 30, 2025

Net sales $ 285,359 $ 109,728 $ 95,047 $ 365,783 $ ( 3,395 ) $ 852,522

Depreciation and amortization 9,446 5,269 6,024 23,038 155 43,932

Operating income (loss) 23,515 17,862 ( 3,790 ) 2,717 ( 6,361 ) 33,943

Capital expenditures 12,140 1,329 1,656 9,456 1,963 26,544

Six Months Ended April 30, 2024

Net sales $ 307,769 $ 106,020 $ 94,215 $ — $ ( 2,648 ) $ 505,356

Depreciation and amortization 10,693 5,096 6,147 — 110 22,046

Operating income (loss) 26,807 17,909 ( 3,491 ) — ( 12,671 ) 28,554

Capital expenditures 11,460 2,406 2,935 — 382 17,183

As of April 30, 2025

Total assets $ 407,552 $ 244,562 $ 145,170 $ 916,393 $ 594,589 $ 2,308,266

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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 three months ended January 31, 2025 (in thousands):

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the six months ended April 30, 2025 (in thousands):

NA Fenestration EU Fenestration NA Cabinet Comp.

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Foreign currency translation adjustment — 2,421 — 1,978 — 4,399

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

Balance as of April 30, 2025 $ 80,105 $ 69,615 $ 39,147 $ 390,243 $ — $ 579,110

For further details of Goodwill, see Note 6, “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 months ended January 31, 2025 and 2024 (in thousands):

Three Months Ended

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

The following table reconciles operating income as reported above to net income for the three and six months ended April 30, 2025 and 2024 (in thousands):

Three Months Ended Six Months Ended

April 30, April 30,

2025 2024 2025 2024

Operating income $ 40,921 $ 20,637 $ 33,943 $ 28,554

Interest expense ( 13,940 ) ( 950 ) ( 28,126 ) ( 2,018 )

Other, net ( 159 ) 4 1,070 1,046

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

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

Income tax expense ( 6,307 ) ( 4,314 ) ( 1,257 ) ( 5,956 )

Net income $ 20,515 $ 15,377 $ 5,630 $ 21,626

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 months ended January 31, 2025 and 2024 were calculated as follows (in thousands, except per share data):

Basic and diluted earnings per share for the three and six months ended April 30, 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

Three Months Ended April 30, 2025

Basic earnings per common share $ 20,515 46,483 $ 0.44

Effect of dilutive securities:

Stock options — — —

Restricted stock awards — 60 —

Performance restricted stock units — 20 —

Diluted earnings per common share $ 20,515 46,563 $ 0.44

Three Months Ended April 30, 2024

Basic earnings per common share $ 15,377 32,870 $ 0.47

Effect of dilutive securities:

Stock options — 37 —

Restricted stock awards — 130 —

Performance restricted stock units — 66 —

Diluted earnings per common share $ 15,377 33,103 $ 0.46

Six Months Ended April 30, 2025

Basic and diluted loss per common share $ 5,630 46,753 $ 0.12

Three Months Ended January 31, 2024

Effect of dilutive securities:

Stock options — 11 —

Restricted stock awards — 84 —

Performance restricted stock units — 20 —

Diluted earnings per common share $ 5,630 46,868 $ 0.12

Six Months Ended April 30, 2024

Basic earnings per common share $ 21,626 32,847 $ 0.66

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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 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.

We had 41,871 and 17,580 of anti-dilutive restricted stock award equivalents for the three and six months ended April 30, 2025, respectively, and no corresponding equivalents for the comparable prior year periods.

Such dilution is dependent on the excess of the market price of our stock over the exercise price and other components of the treasury stock method.

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 months ended January 31, 2025.

QUANEX BUILDING PRODUCTS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

New Accounting Guidance

We did not adopt any new accounting pronouncements during the three and six months ended April 30, 2025.

Accounting Standards Not Yet Adopted

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For information on additional factors that could cause actual results to differ materially, please refer to the section entitled “Item 1A.

Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

Risk Factors” within this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

About Third-Party Information

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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