Quanex Building Products CORP 10-Q

Item 1. Financial Statements QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) July 31, 2025 October 31, 2024 (In thousands, except share amounts) ASSETS Current assets: Cash and cash equivalents $ 66,272 $ 97,744 Restricted cash 1,654 5,251 Accounts receivable, net of allowance for credit losses of $ 3,025 and $ 254 201,837 197,689 Inventories 272,222 275,550 Income taxes receivable — 5,937 Prepaid and other current assets 41,339 29,097 Total current assets 583,324 611,268 Property, plant and equipment, net of accumulated depreciation of $ 404,974 and $ 391,851 405,510 402,466 Operating lease right-of-use assets 147,829 126,715 Deferred income tax assets 3,654 3,845 Goodwill 271,459 574,711 Intangible assets, net 558,768 597,909 Other assets 2,133 2,874 Total assets $ 1,972,677 $ 2,319,788 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 126,486 $ 124,404 Accrued liabilities 95,378 103,623 Income taxes payable 1,273 6,620 Current maturities of long-term debt 26,313 25,745 Current operating lease liabilities 15,243 12,475 Total current liabilities 264,693 272,867 Long-term debt 695,605 737,198 Noncurrent operating lease liabilities 138,246 117,560 Deferred income taxes liabilities 143,576 162,304 Other liabilities 13,166 19,113 Total liabilities 1,255,286 1,309,042 Commitments and contingencies Stockholders’ equity: Preferred stock, no par value, shares authorized 1,000,000 ; issued and outstanding - none — — Common stock, $ 0.01 par valu e, shares authorized 125,000,000 ; issued 51,213,869 and 51,266,501 , respectively; outstanding 45,876,838 and 47,252,070 , respectively 512 513 Additional paid-in-capital 699,106 701,008 Retained earnings 148,795 430,405 Accumulated other comprehensive loss ( 30,501 ) ( 46,428 ) Less: Treasury stock at cost, 5,337,031 and 4,014,431 shares, respectively ( 100,521 ) ( 74,752 ) Total stockholders’ equity 717,391 1,010,746 Total liabilities and stockholders' equity $ 1,972,677 $ 2,319,788 The accompanying notes are an integral part of the financial statements. 1 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 (In thousands, except per share amounts) Net sales $ 495,273 $ 280,345 $ 1,347,795 $ 785,701 Cost and expenses: Cost of sales (excluding depreciation and amortization) 357,305 209,441 986,129 597,127 Selling, general and administrative 71,270 36,509 208,253 103,579 Restructuring charges 1,367 — 10,207 — Depreciation and amortization 33,882 10,953 77,814 32,999 Asset impairment charges 302,284 — 302,284 — Operating (loss) income ( 270,835 ) 23,442 ( 236,892 ) 51,996 Non-operating (expense) income: Interest expense ( 14,218 ) ( 878 ) ( 42,344 ) ( 2,896 ) Other, net 855 9,474 1,925 10,520 (Loss) income before income taxes ( 284,198 ) 32,038 ( 277,311 ) 59,620 Income tax benefit (expense) 8,191 ( 6,688 ) 6,934 ( 12,644 ) Net (loss) income $ ( 276,007 ) $ 25,350 $ ( 270,377 ) $ 46,976 (Loss) earnings per common share $ ( 6.04 ) $ 0.77 $ ( 5.83 ) $ 1.43 Diluted (loss) earnings per common share $ ( 6.04 ) $ 0.77 $ ( 5.83 ) $ 1.42 Weighted-average common shares outstanding: Basic 45,691 32,876 46,395 32,857 Diluted 45,691 33,106 46,395 33,087 Cash dividends per share $ 0.08 $ 0.08 $ 0.24 $ 0.24 The accompanying notes are an integral part of the financial statements. 2 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 (In thousands) Net (loss) income $ ( 276,007 ) $ 25,350 $ ( 270,377 ) $ 46,976 Other comprehensive income: Foreign currency translation (loss) gain, net of tax ( 3,467 ) 4,500 15,927 8,010 Other comprehensive (loss) income, net of tax ( 3,467 ) 4,500 15,927 8,010 Comprehensive (loss) income $ ( 279,474 ) $ 29,850 $ ( 254,450 ) $ 54,986 The accompanying notes are an integral part of the financial statements. 3 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended July 31, 2025 2024 (In thousands) Operating activities: Net (loss) income $ ( 270,377 ) $ 46,976 Adjustments to reconcile net (loss) income to cash provided by operating activities: Depreciation and amortization 77,814 32,999 Stock-based compensation 2,762 2,159 Deferred income tax ( 26,440 ) ( 2,321 ) Asset impairment charges 302,284 — Gain on deal contingent foreign exchange forward currency contract — ( 9,200 ) Other, net 9,203 886 Changes in assets and liabilities: (Increase) decrease in accounts receivable ( 1,727 ) 11,114 Decrease (increase) in inventory 5,261 ( 183 ) (Increase) decrease in other current assets ( 7,228 ) 1,646 Increase (decrease) in accounts payable 144 ( 9,634 ) (Decrease) increase in accrued liabilities ( 9,725 ) 948 (Decrease) increase in income taxes payable ( 21 ) 6,659 (Decrease) increase in other long-term liabilities ( 5,395 ) 707 Other, net 88 577 Cash provided by operating activities 76,643 83,333 Investing activities: Capital expenditures ( 40,996 ) ( 23,435 ) Proceeds from disposition of capital assets 361 115 Cash used for investing activities ( 40,635 ) ( 23,320 ) Financing activities: Borrowings under credit facilities 170,000 — Repayments of credit facility borrowings ( 213,750 ) ( 15,000 ) Repayments of other long-term debt ( 1,962 ) ( 1,893 ) Common stock dividends paid ( 11,233 ) ( 7,943 ) Issuance of common stock 214 573 Payroll tax paid to settle shares forfeited upon vesting of stock ( 1,400 ) ( 1,193 ) Purchase of treasury stock ( 29,248 ) — Cash used for financing activities ( 87,379 ) ( 25,456 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 16,302 935 (Decrease) increase in cash, cash equivalents and restricted cash ( 35,069 ) 35,492 Cash, cash equivalents and restricted cash at beginning of period 102,995 58,474 Cash, cash equivalents and restricted cash at end of period $ 67,926 $ 93,966 The accompanying notes are an integral part of the financial statements. 4 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) Nine Months Ended July 31, 2025 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity (In thousands, no per share amounts shown except in verbiage) Balance at October 31, 2024 $ 513 $ 701,008 $ 430,405 $ ( 46,428 ) $ ( 74,752 ) $ 1,010,746 Net loss — — ( 14,885 ) — — ( 14,885 ) Foreign currency translation adjustment — — — ( 15,951 ) — ( 15,951 ) Common dividends ($ 0.08 per share) — — ( 3,812 ) — — ( 3,812 ) Purchase of treasury stock — — — — ( 3,698 ) ( 3,698 ) Stock-based compensation activity: Expense related to stock-based compensation — 902 — — 902 Stock options exercised — 41 — — 173 214 Restricted stock awards granted — ( 1,894 ) — — 1,894 — Performance restricted stock units vested — ( 1,300 ) — — 1,300 — Other ( 1 ) ( 1,399 ) — — — ( 1,400 ) Balance at January 31, 2025 $ 512 $ 697,358 $ 411,708 $ ( 62,379 ) $ ( 75,083 ) $ 972,116 Net income — — 20,515 — — 20,515 Foreign currency translation adjustment — — — 35,345 — 35,345 Common dividends ($ 0.08 per share) — — ( 3,740 ) — — ( 3,740 ) Purchase of treasury stock — — — — ( 23,496 ) ( 23,496 ) Stock-based compensation activity: Expense related to stock-based compensation — 923 — — — 923 Restricted stock awards granted — ( 43 ) — — 43 — Balance at April 30, 2025 $ 512 $ 698,238 $ 428,483 $ ( 27,034 ) $ ( 98,536 ) $ 1,001,663 Net income — — ( 276,007 ) — — ( 276,007 ) Foreign currency translation adjustment — — — ( 3,467 ) — ( 3,467 ) Common dividends ($ 0.08 per share) — — ( 3,681 ) — — ( 3,681 ) Purchase of treasury stock — — — — ( 2,054 ) ( 2,054 ) Stock-based compensation activity: Expense related to stock-based compensation — 937 — — — 937 Restricted stock awards granted — ( 69 ) — — 69 — Balance at July 31, 2025 $ 512 $ 699,106 $ 148,795 $ ( 30,501 ) $ ( 100,521 ) $ 717,391 5 Table of Contents Nine Months Ended July 31, 2024 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity (In thousands, no per share amounts shown except in verbiage) Balance at October 31, 2023 $ 372 $ 251,576 $ 409,318 $ ( 38,141 ) $ ( 77,571 ) $ 545,554 Net income — — 6,249 — — 6,249 Foreign currency translation adjustment — — — 6,081 — 6,081 Common dividends ($ 0.08 per share) — — ( 2,645 ) — — ( 2,645 ) Stock-based compensation activity: Expense related to stock-based compensation — 583 — — 583 Stock options exercised — 22 — — 378 400 Restricted stock awards granted — ( 1,357 ) — — 1,357 — Performance restricted stock units vested — ( 917 ) — — 917 — Other ( 1 ) ( 1,192 ) — — — ( 1,193 ) 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 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 The accompanying notes are an integral part of the financial statements. 6 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations and Basis of Presentation 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. We have organized our business into three reportable business segments: Hardware Solutions, which manufactures window and door hardware and screens; Extruded Solutions, which manufacturers insulating glass spacers, vinyl window and door profiles, seals, and weatherstripping; and Custom Solutions, which manufactures wood, mixing, and building access solutions. 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. Basis of Presentation and Principles of Consolidation The accompanying interim unaudited condensed consolidated financial statements include the accounts of Quanex Building Products Corporation. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of October 31, 2024 was derived from audited financial information but does not include all disclosures required by U.S. GAAP. The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. In our opinion, the accompanying financial statements contain all adjustments (which consist of normal recurring adjustments, except as disclosed herein) necessary to fairly present our financial position, results of operations and cash flows for the interim periods. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year or for any future periods. Use of Estimates In preparing financial statements, we make informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. We review our estimates on an on-going basis, including those related to impairment of long-lived assets and goodwill, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates. Revenue from Contracts with Customers Revenue recognition We recognize revenue that reflects the consideration we expect to receive for product sales upon transfer to customers. Revenue for product sales is recognized when control of the promised products is transferred to our customers, and we are entitled to consideration in exchange for such transfer. 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. Performance obligations A performance obligation is a promise to provide the customer with a good or service. Our performance obligations include product sales, with each product included in a customer contract being recognized as a separate performance obligation. For contracts with multiple performance obligations, the standalone selling price of each product is generally readily observable. 7 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Revenue from product sales is recognized at a point in time when the product is transferred to the customer, in accordance with the shipping terms, which is generally upon shipment. We estimate a provision for sales returns and warranty allowances to account for product returns related to general returns and product nonconformance. We generally expense incremental costs of obtaining a contract when incurred because the amortization period would be less than one year. Additionally, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Pricing and sales incentives Pricing is established at or prior to the time of sale with our customers and we record sales at the agreed-upon net selling price, reflective of current and prospective discounts. Shipping and handling costs We account for shipping and handling services as fulfillment services; accordingly, freight revenue is combined with the product deliverable rather than being accounted for as a distinct performance obligation within the terms of the agreement. Shipping and handling costs incurred by us for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying condensed consolidated statements of income. Contract assets and liabilities Deferred revenue, which is not significant, is recorded when we have remaining unsatisfied performance obligations for which we have received consideration. Disaggregation of revenue We manufacture and distribute a diverse portfolio of products for OEMs operating in hardware, extrusion, and custom markets worldwide. Our broad geographic reach exposes us to diverse economic conditions, which can impact demand, currency fluctuations, and supply chain dynamics. The following table summarizes our product sales for the three and nine months ended July 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.” 8 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 (In thousands) Hardware Solutions: Window and door hardware $ 150,307 $ — $ 411,522 $ — Screens 76,809 75,460 203,269 204,127 $ 227,116 $ 75,460 $ 614,791 $ 204,127 Extruded Solutions: Window profiles $ 68,165 $ 67,802 182,273 193,758 Seals and gaskets 29,865 16,513 84,915 42,714 Spacers 54,743 37,868 146,544 104,047 Solar 5,250 5,198 17,835 16,074 Flashing Tape 3,038 4,905 6,751 13,512 Window and door hardware 10,044 — 29,694 — Other 3,322 2,266 10,012 9,755 $ 174,427 $ 134,552 $ 478,024 $ 379,860 Custom Solutions: Wood solutions $ 53,409 $ 51,448 $ 148,456 $ 145,663 Access solutions 27,370 — 74,158 — Mixing solutions 21,485 21,219 62,195 62,538 $ 102,264 $ 72,667 $ 284,809 $ 208,201 Unallocated Corporate & Other: Eliminations $ ( 8,534 ) $ ( 2,334 ) $ ( 29,829 ) $ ( 6,487 ) $ ( 8,534 ) $ ( 2,334 ) $ ( 29,829 ) $ ( 6,487 ) Net sales $ 495,273 $ 280,345 $ 1,347,795 $ 785,701 Allowance for Credit Losses We have established an allowance for credit losses to estimate the risk of losses, which represents an estimate of expected losses over the remaining contractual life of our receivables. The allowance is determined using two methods. The amounts calculated from each of these methods are combined to determine the total amount reserved. First, a specific reserve is established for individual accounts where information indicates the customers may have an inability to meet financial obligations. Second, a reserve is determined for all customers based on a range of percentages applied to aging categories. These percentages are based on historical collection rates, write-off experience, and forecasts of future economic conditions. Actual write-offs are charged against the allowance when collection efforts have been unsuccessful. Related Parties N et sales to a customer which is a related party with one of our non-employee directors for the three and nine months ended July 31, 2025 was $ 0.4 million and $ 1.4 million, respectively, and $ 0.3 million and $ 0.8 million for comparable prior year periods. Purchases from a customer which is a related party with one of our non-employee directors for the three and nine months ended July 31, 2025 was $ 0.1 million, respectively, and zero for 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. We are not aware of any other related party transactions with any of our current non-employee directors or officers outside of their normal business functions or expected contractual duties. 9 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. During the three months ended July 31, 2025, we restructured our reportable operating segments to integrate the acquisition of Tyman plc with our legacy Quanex operations. This restructuring aligns our business into three operating segments: Hardware Solutions, Extruded Solutions, and Custom Solutions, which is how our Chief Operating Decision Maker (“CODM”) assesses the performance of our business, makes key operating decisions and allocates resources. Prior period amounts have been recast to conform to the new segment structure. For additional discussion of our acquisition of Tyman plc, see Note 2, “Acquisition.” For additional discussion of our reportable business segments, see Note 14, “Segment Information.” During the three and nine months ended July 31, 2025 , we incurred $ 1.4 million and $ 10.2 million, respectively, in restructuring charges including $ 1.4 million, and $ 6.3 million, respectively, related to workforce alignment costs, primarily severance and employee-related expenses. As of July 31, 2025, we have paid $ 5.1 million in workforce alignment costs, with a remaining accrual of $ 1.2 million. Additionally, we recognized $ 3.9 million related to the disposal of software which no longer supports our business. We may incur additional restructuring charges in future periods. The nature and amount of any such charges will depend on further developments in the restructuring process. Goodwill impairment During the three months ended July 31, 2025, as a result of the restructuring , we tested goodwill for impairment. The testing of our goodwill resulted in an asset impairment of $ 302.3 million. Of the goodwill impairment amount recorded during the three months ended July 31, 2025, $ 44.8 million relates to tax-deductible goodwill. The remaining charge was not deductible for tax purposes, and no deferred tax asset was recognized. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” 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. Acquisition 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. 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 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. 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. T he purchase price for the Tyman Acquisition was initially allocated on a preliminary basis as of the acquisition date. 10 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Despite basing our initial estimates on the information available on August 1, 2024, further data and evidence obtained during the third quarter of 2025 prompted several measurement period adjustments. These adjustments primarily affected deferred income taxes, fixed assets, inventories, accounts payable, and other assets, resulting in a 4.1 million reduction in the preliminary goodwill we initially recognized. The revised allocation of the purchase price, reflecting the fair value of the assets acquired and liabilities assumed, including the identified measurement period adjustments, and the final purchase price allocation is detailed in the table below. As of Date of Opening Balance Sheet Measurement Period Adjustments Final Purchase Price Allocation (In thousands) Net assets acquired: Accounts receivable $ 99,574 $ — $ 99,574 Inventories 211,617 ( 286 ) 211,331 Prepaid and other assets 21,516 ( 1,754 ) 19,762 Property, plant and equipment 157,981 ( 130 ) 157,851 Operating lease right-of-use assets 65,414 — 65,414 Goodwill 385,045 ( 4,104 ) 380,941 Intangible assets 539,285 — 539,285 Accounts payable ( 66,769 ) ( 595 ) ( 67,364 ) Accrued liabilities ( 41,958 ) — ( 41,958 ) Long-term debt ( 300,684 ) — ( 300,684 ) Operating lease liabilities ( 66,228 ) — ( 66,228 ) Deferred income taxes ( 145,677 ) 6,869 ( 138,808 ) Other liabilities ( 10,502 ) — ( 10,502 ) Net assets acquired $ 848,614 $ — $ 848,614 Consideration: Total consideration, net of cash and cash equivalents $ 848,614 $ — $ 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’s results are allocated to our Hardware Solutions, Extruded Solutions, and Custom Solutions segments in accordance with the nature of operations. For additional discussion of our reportable business segments, see Note 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 and nine months ended July 31, 2024 . The following pro forma results give effect to this acquisition, assuming the transaction occurred on November 1, 2023. Three Months Ended Nine Months Ended July 31, 2024 July 31, 2024 (In thousands, except per share amounts) (Unaudited) Net sales $ 493,804 $ 1,395,632 Net income $ 17,283 $ 48,846 Basic earnings per share $ 0.37 $ 1.04 Diluted earnings per share $ 0.37 $ 1.03 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 11 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. GAAP. 3. Inventories Inventories consisted of the following at July 31, 2025 and October 31, 2024 (in thousands): July 31, 2025 October 31, 2024 Raw materials $ 88,257 $ 81,330 Finished goods and work in process 181,374 192,448 Supplies and other 2,591 1,772 Total $ 272,222 $ 275,550 Fixed costs related to excess manufacturing capacity, if any, have been expensed in the period they were incurred and, therefore, are not capitalized into inventory. 4. Leases We recognize a right-of-use (ROU) asset and lease liability for each operating and finance lease with a contractual term greater than 12 months at the time of lease inception. We include ROU assets and lease liabilities for leases that exist within other contracts. Leases with an original term of 12 months or less are not recognized on the balance sheet, and the rent expense related to those short-term leases is recognized over the lease term. We do not account for lease and non-lease (e.g., common area maintenance) components of contracts separately for any underlying asset class. We lease certain manufacturing plants, warehouses, office space, vehicles and equipment under finance and operating leases. Lease commencement occurs on the date we take possession or control of the property or equipment. Original terms for our real estate-related leases are generally between five years and twenty years . Original terms for equipment-related leases, primarily manufacturing equipment and vehicles, are generally between one year and ten years . Some of our leases also include rental escalation clauses. Renewal options are included in the determination of lease payments when management determines the options are reasonably certain of exercise, considering financial performance, strategic importance and/or invested capital. If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. When the implicit rate is not determinable, our estimated incremental borrowing rate is utilized, determined on a collateralized basis, to discount lease payments based on information available at lease commencement. Total lease costs recorded include fixed operating lease costs and variable lease costs. Most of our real estate leases require we pay certain expenses, such as common area maintenance costs, of which the fixed portion is included in operating lease costs. We recognize operating lease costs on a straight-line basis over the lease term. In addition to the above costs, variable lease costs are recognized when probable and are not included in determining the present value of our lease liability. The ROU asset is measured at the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date and initial direct costs. For operating leases, ROU assets are reduced over the lease term by the recognized straight-line lease expense less the amount of accretion of the lease liability determined using the effective interest method. For finance leases, ROU assets are amortized on a straight-line basis over the shorter of the useful life of the leased asset or the lease term. Interest expense on each finance lease liability is recognized utilizing the effective interest method. ROU assets are tested for impairment in the same manner as long-lived assets. Additionally, we monitor for events or changes in circumstances that may require a reassessment of one of our leases and determine if a remeasurement is required. 12 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION 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, 2025 and October 31, 2024 (in thousands): Leases Classification July 31, 2025 October 31, 2024 Assets Operating lease assets Operating lease right-of-use assets $ 147,829 $ 126,715 Finance lease assets Property, plant and equipment (less accumulated depreciation of $ 14,406 and $ 10,362 ) 71,521 67,046 Total lease assets $ 219,350 $ 193,761 Liabilities Current Operating Current operating lease liabilities $ 15,243 $ 12,475 Finance Current maturities of long-term debt 4,257 3,688 Noncurrent Operating Noncurrent operating lease liabilities 138,246 117,560 Finance Long-term debt 56,769 56,988 Total lease liabilities $ 214,515 $ 190,711 The table below presents the components of lease costs for the three and nine months ended July 31, 2025 and 2024 (in thousands): Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 Operating lease cost $ 8,112 $ 3,722 $ 17,181 $ 7,720 Finance lease cost Amortization of leased assets 1,697 1,237 3,666 2,706 Interest on lease liabilities 992 839 2,190 1,863 Variable lease costs 899 523 2,360 1,461 Total lease cost $ 11,700 $ 6,321 $ 25,397 $ 13,750 13 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION 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, 2025 and 2024 (in thousands): Nine Months Ended July 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Finance leases - financing cash flows $ 2,952 $ 2,112 Finance leases - operating cash flows $ 2,190 $ 1,863 Operating leases - operating cash flows $ 15,084 $ 6,826 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 30,701 $ 22,025 Finance leases $ 2,092 $ 1,308 The table below presents the weighted-average remaining lease terms and weighted-average discount rates for the Company's leases as of July 31, 2025 and October 31, 2024: July 31, 2025 October 31, 2024 Weighted-average remaining lease term (in years) Operating leases 11.5 11.5 Financing leases 15.4 16.3 Weighted-average discount rate Operating leases 5.56 % 5.31 % Financing leases 4.90 % 4.84 % The table below presents the maturity of the lease liabilities as of July 31, 2025 (in thousands): Operating Leases Finance Leases 2025 (remaining three months) $ 5,823 $ 1,783 2026 22,290 7,077 2027 19,689 6,928 2028 18,032 6,698 2029 16,998 6,365 Thereafter 127,654 57,665 Total lease payments 210,486 86,516 Less: present value discount 56,997 25,490 Total lease liabilities $ 153,489 $ 61,026 14 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Property, Plant and Equipment Property, plant and equipment consisted of the following as of July 31, 2025 and October 31, 2024 (in thousands): July 31, 2025 October 31, 2024 Land and land improvements $ 21,632 $ 99,068 Buildings and building improvements 192,456 186,087 Machinery and equipment 530,829 462,628 Construction in progress 65,567 46,534 Property, plant and equipment, gross 810,484 794,317 Less: Accumulated depreciation 404,974 391,851 Property, plant and equipment, net $ 405,510 $ 402,466 Depreciation expense, including amortization of finance leases, for the three and nine months ended July 31, 2025 was $ 21.6 million and $ 48.2 million, respectively, and $ 8.1 million and $ 24.0 million for the comparable prior year periods. As a result of push-down accounting related to the assets acquired in the Tyman acquisition, we recorded a one-time depreciation charge of $ 7.3 million to reflect the application on useful lives on an asset by asset basis thus requiring an adjustment during during the three months ended July 31, 2025. The reported balances of our property, plant and equipment as of July 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. As discussed in the Restructuring section of our Nature of Operations and Basis of Presentation in Note 1, we restructured our reportable operating segments during the third quarter of 2025, which triggered the requirement to assess our goodwill for potential impairment. We did not record any impairment charges related to property, plant and equipment or intangible assets as a result of the analysis for the periods ended July 31, 2025 and October 31, 2024. 6. Goodwill and Intangible Assets Goodwill The change in the carrying amount of goodwill for the nine months ended July 31, 2025 was as follows (in thousands): Nine Months Ended July 31, 2025 Beginning balance as of November 1, 2024 $ 574,711 Measurement period adjustments ( 3,989 ) Goodwill impairment charge ( 302,284 ) Foreign currency translation adjustment 3,021 Balance as of the end of the period $ 271,459 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. In connection with our restructuring , we reassigned goodwill among certain of our reporting units using a r elative fair value approach and performed a quantitative goodwill impairment test on all reporting units to determine if any impairment existed. To estimate the fair value of our reporting units, we applied the discounted cash flow method under the income approach. The resulting fair value was lower than the carrying value for certain reporting units, as a result of the prolonged decline in our market price driven by weaker consumer confidence and high levels of uncertainty across the industry, necessitating the 15 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) recognition of a non-cash goodwill impairment charge of $ 302.3 million, which has been recorded in the consolidated statements of income within “Asset impairment charges” for the three months ended July 31, 2025. As a result of the restructuring , as of July 31, 2025, we have ten reporting units, nine of which comprised our goodwill balance prior to the goodwill impairment. These ten reporting units are aggregated into our three operating reportable segments. After the goodwill impairment, seven of the reporting units comprise the remaining goodwill balance. 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.” For additional discussion of our acquisition of Tyman plc and for further details on the measurement period adjustments, see Note 2, “Acquisition.” Identifiable Intangible Assets Amortizable intangible assets consisted of the following as of July 31, 2025 and October 31, 2024 (in thousands): July 31, 2025 October 31, 2024 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships $ 506,524 $ 134,838 $ 512,131 $ 112,748 Trademarks and trade names 240,667 56,947 243,434 47,685 Patents and other technology 26,050 22,688 25,164 22,387 Total $ 773,241 $ 214,473 $ 780,729 $ 182,820 We had amortization expense related to intangible assets for the three and nine months ended July 31, 2025 of $ 12.3 million and $ 29.4 million, respectively, and $ 2.8 million and $ 9.0 million for the comparable prior year periods. During the nine months ended July 31, 2025, we recorded a one-time adjustment to amortization expense of $ 3.5 million . As discussed in the Restructuring section of our Nature of Operations and Basis of Presentation in Note 1, we restructured our reportable operating segments during the third quarter of 2025, which triggered the requirement to assess our goodwill for potential impairment. We did not record any impairment charges related to property, plant and equipment or intangible assets as a result of the analysis for the periods ended July 31, 2025 and October 31, 2024. Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of July 31, 2025 (in thousands): Estimated Amortization Expense 2025 (remaining three months) $ 9,760 2026 38,874 2027 38,874 2028 33,641 2029 33,623 Thereafter 403,996 Total $ 558,768 16 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 7. Debt and Finance Lease Obligations Long-term debt consisted of the following at July 31, 2025 and October 31, 2024 (in thousands): July 31, 2025 October 31, 2024 Term Loan A Facility 475,000 493,750 Revolving Credit Facility 197,500 222,500 Finance lease obligations and other 61,194 60,676 Unamortized deferred financing fees ( 11,776 ) ( 13,983 ) Total debt $ 721,918 $ 762,943 Less: Current maturities of long-term debt 26,313 25,745 Long-term debt $ 695,605 $ 737,198 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) 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. 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 Term SOFR Loans, Eurocurrency Rate Loans and RFR Loans Base Rate Loans I Less than or equal to 1.50 to 1.00 0.150 % 2.00 % 1.00 % II Greater than 1.50 to 1.00, but less than or equal to 2.25 to 1.00 0.175 % 2.25 % 1.25 % III Greater than 2.25 to 1.00, but less than or equal to 3.00 to 1.00 0.200 % 2.50 % 1.50 % IV Greater than 3.00 to 1.00 0.250 % 2.75 % 1.75 % In the event of default, outstanding borrowings 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 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 17 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. 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. 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 Amended Credit Agreement. As of July 31, 2025, we had $ 672.5 million borrowings outstanding under the Facilities, $ 11.8 million of unamortized debt issuance costs, $ 6.1 million of outstanding letters of credit, and $ 61.2 million outstanding primarily under finance leases and other debt. We had $ 271.4 million available for use under the Facilities at July 31, 2025. The borrowings outstanding as of July 31, 2025 under the Facilities accrue interest at 6.96 % per annum, and our weighted-average borrowing rate for borrowings outstanding during the nine months ended July 31, 2025 and 2024 was 6.81 % and 6.69 %, respectively. We were in compliance with our debt covenants as of July 31, 2025. 8. Retirement Plans We maintain a non-qualified deferred compensation plan covering members of the Board of Directors and certain key employees. As of July 31, 2025 and October 31, 2024, the liability associated with the deferred compensation plan was approximately $ 4.1 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. 9. Income Taxes To determine our income tax expense or benefit for interim periods, consistent with accounting standards, we apply the estimated annual effective income tax rate 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, 2025 and 2024 were 2.5 % and 21.2 %, respectively. The difference between our estimated annual effective income tax rate and the U.S. federal statutory rate of 21 % principally results from discrete tax items, U.S. state taxes, a non-U.S. tax rate differential and other permanent differences. The primary discrete item affecting the 2025 effective rate was the benefit of $ 10.8 million related to the goodwill impairment. 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. 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 $ 0.2 million and $ 0.8 million as of July 31, 2025 and October 31, 2024, respectively. We also maintain a valuation allowance for capital losses which totaled $ 3.5 million and $ 3.3 million as of July 31, 2025 and October 31, 2024, respectively . On July 4, 2025, the One Big Beautiful Bill Act was enacted. There were multiple business tax provisions that have an impact to the company, including a reclass of our income tax payable and deferred tax liability related to the timing differences on fixed assets depreciation. 18 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 10. Contingencies Remediation and Environmental Compliance Costs Under applicable state and federal laws, we may be responsible for, among other things, all or part of the costs required to remove or remediate wastes or hazardous substances at locations we, or our predecessors, have owned or operated. From time to time, we also have been alleged to be liable for all or part of the costs incurred to clean up third-party sites where there might have been an alleged improper disposal of hazardous substances. Currently, we are not involved in any such matters. From time to time, we incur routine expenses and capital expenditures associated with compliance with existing environmental regulations, including control of air emissions and water discharges, and plant decommissioning costs. We have not incurred any material expenses or capital expenditures related to environmental matters during the past three fiscal years, and do not expect to incur a material amount of such costs in fiscal 2025. While we will continue to have future expenditures related to environmental matters, any such amounts are impossible to reasonably estimate at this time. Based upon our experience to date, we do not believe that our compliance with environmental requirements will have a material adverse effect on our operations, financial condition or cash flows. Litigation From time to time, we, along with our subsidiaries, are involved in various litigation matters arising in the ordinary course of our business, including those arising from or related to contractual matters, commercial disputes, intellectual property, personal injury, environmental matters, product performance or warranties, product liability, insurance coverage and personnel and employment disputes. We regularly review with legal counsel the status of all ongoing proceedings, and we maintain insurance against these risks to the extent deemed prudent by our management and to the extent such insurance is available. However, there is no assurance that we will prevail in these matters or that our insurers will accept full coverage of these matters, and we could, in the future, incur judgments, enter into settlements of claims, or revise our expectations regarding the outcome or insurability of matters we face, which could materially impact our results of operations. We have been and are currently party to multiple claims, some of which are in litigation, relating to alleged defects in a commercial sealant product that was manufactured and sold during the 2000’s. While we believe that our product was not defective and that we would prevail in these commercial sealant product claims if taken to trial, the timing, ultimate resolution and potential impact of these claims is not currently determinable. 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. 11. Fair Value Measurement of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market data developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to Level 1 and the lowest priority to Level 3. The three levels of the fair value hierarchy are described below: • Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. • Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates) and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Carrying amounts reported on the balance sheet for cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturity of these instruments. Our outstanding debt is variable rate debt that re-prices frequently, thereby limiting our exposure to significant change in interest rate risk. As a result, the fair value of our debt instrument approximates carrying value at July 31, 2025, and October 31, 2024 (Level 2 measurement). 19 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) During the nine months ended July 31, 2025, we used forward foreign exchange contracts to hedge our foreign currency exposures against the U.S. Dollar (“USD”) to Great British Pound (“GBP”) and Mexican Peso (“MXN”) to USD. We did not apply hedge accounting to our forward exchange contracts. During the nine months ended July 31, 2025 and 2024, we recognized a net gain of $ 0.3 million and zero , respectively, related to our forward foreign exchange contracts. As of July 31, 2025, we do not have any foreign exchange contracts outstanding. During the nine months ended July 31, 2025, we subscribed to Bonds for the Reconstruction for a Free Argentina (“BOPREAL”) issued by the Argentine Central Banks. The BOPREAL bond subscriptions were denominated in Argentine Pesos (“ARS”) and settled in USD during the three months ended July 31, 2025, resulting in total proceeds of the BOPREAL bonds to be appr oximately $ 2.6 million after $ 0.1 million deduction of taxes and transaction fees. As of July 31, 2025, we do not have any BOPREAL bond subscriptions outstanding. 12. Stock-Based Compensation We have established and maintain an Omnibus Incentive Plan (2020 Plan) that provides for the granting of restricted stock awards, stock options, restricted stock units, performance share awards, performance restricted stock units, and other stock-based and cash-based awards. The 2020 Plan is administered by the Compensation and Management Development Committee of the Board of Directors. The aggregate number of shares of common stock authorized for grant under the 2020 Plan is 3,139,895 as approved by shareholders. Any officer, key employee and/or non-employee director is eligible for awards under the 2020 Plan. We grant restricted stock units to non-employee directors on the first business day of each fiscal year. As approved by the Compensation & Management Development Committee of our Board of Directors annually, we grant a mix of restricted stock awards, performance shares and performance restricted stock units to officers, management and key employees. We also historically granted stock options to certain officers, directors and key employees. Occasionally, we may make additional grants to key employees at other times during the year. Restricted Stock Awards Restricted stock awards are granted to key employees and officers annually, and typically cliff vest over a three-year period with service and continued employment as the only vesting criteria. The recipient of the restricted stock award is entitled to all of the rights of a shareholder, except that the award is nontransferable during the vesting period and quarterly dividends are not paid until the award vests. The fair value of the restricted stock award is established on the grant date and then expensed over the vesting period resulting in an increase in additional paid-in-capital. Shares are generally issued from treasury stock at the time of grant. A summary of non-vested restricted stock awards activity during the nine months ended July 31, 2025 is presented below: Restricted Stock Awards Weighted-Average Grant Date Fair Value per Share Non-vested at October 31, 2024 236,800 $ 25.85 Granted 107,682 29.19 Vested ( 84,100 ) 22.95 Non-vested at July 31, 2025 260,382 $ 28.16 The total weighted-average grant-date fair value of restricted stock awards that vested during each of the nine months ended July 31, 2025 and 2024 was $ 1.9 million and $ 1.4 million, respectively. As of July 31, 2025, total unrecognized compensation cost related to unamortized restricted stock awards was $ 3.7 million. We expect to recognize this expense over the remaining weighted-average vesting period of 2.0 years. Stock Options Historically, stock options have been awarded to key employees, officers and non-employee directors. In December 2017, the Compensation & Management Development Committee of the Board of Directors approved a change to the long-term incentive award program eliminating the grant of stock options and replacing this award with a grant of performance restricted stock units and performance shares as further described below. As a result, the final stock options were granted during the fiscal year ended October 31, 2017. Stock options typically vested ratably over a three-year period with service and continued employment as the vesting conditions. Our stock options may be exercised up to a maximum of ten years from the date of grant. The fair value of the stock options was determined on the grant date and expensed over the vesting period resulting in an 20 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) increase in additional paid-in-capital. For employees who were nearing retirement-eligibility, we recognize stock option expense ratably over the shorter of the vesting period or the period from the grant-date to the retirement-eligibility date. We use a Black-Scholes pricing model to estimate the fair value of stock options. 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, 2025: Stock Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (000s) Outstanding at October 31, 2024 78,250 $ 19.45 Exercised ( 9,300 ) 19.97 Outstanding at July 31, 2025 68,950 $ 19.38 0.8 $ 7 Vested at July 31, 2025 68,950 $ 19.38 0.8 $ 7 Exercisable at July 31, 2025 68,950 $ 19.38 0.8 $ 7 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 nine months ended July 31, 2025 and 2024 was $ 0.1 million and $ 0.4 million, respectively. Restricted Stock Units Restricted stock units may be awarded to key employees and officers from time to time, and annually to non-employee directors. The non-employee director restricted stock units vest immediately but are payable only upon the director's cessation of service unless an election is made by the non-employee director to settle and pay the award on an earlier specified date. Restricted stock units awarded to employees and officers typically cliff vest after a three-year period with service and continued employment as the vesting conditions. Restricted stock units are not considered outstanding shares and do not have voting rights, although the holder does receive a cash payment equivalent to the dividend paid, on a one-for-one basis, on our outstanding common shares. Once the criteria is met, each restricted stock unit is payable to the holder in cash based on the market value of one share of our common stock. Accordingly, we record a liability for the restricted stock units on our balance sheet and recognize any changes in the market value during each reporting period as compensation expense. During the nine months ended July 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 $ 20.70 per share, respectively, which vested immediately. During the nine months ended July 31, 2025 and 2024, 61,206 and zero restricted stock units, which were awarded to key employees, vested, respectively, and 1,998 and zero restricted stock units were forfeited for the same periods, respectively. During the nine months ended July 31, 2025, we paid $ 1.4 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 nine months ended July 31, 2025. Performance Share Awards We have awarded annual grants of performance shares to key employees and officers. 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 December 2022 and December 2023 awarded performance shares may ultimately vest and 0% to 250% of the December 2024 performance share may ultimately vest. 21 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 December 7, 2022 89,300 $ 23.49 4,600 December 7, 2023 72,200 $ 32.15 — December 4, 2024 88,900 $ 29.75 — March 1, 2025 3,000 $ 12.48 — 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. Performance share awards are payable in cash based upon the number of performance shares ultimately earned, and are therefore not considered outstanding shares. Performance Restricted Stock Units We award performance restricted stock units to key employees and officers. These awards cliff vest upon a three-year service period with the absolute total shareholder return of our common stock over this three-year term as the vesting criteria. The number of 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. To value the performance restricted stock units, we used a Monte Carlo simulation model to arrive at a grant-date fair value. This amount will be adjusted for forfeitures and expensed over the three-year term of the award with a credit to additional paid-in-capital. Depending on the achievement of the performance conditions, a minimum of 0 % and a maximum of 150 % of the awarded performance restricted stock units may vest. Specifically, the awards vest on a continuum with the following Absolute Total Shareholder Return (A-TSR) milestones: Vesting Level Vesting Criteria Percentage of Award Vested Level 1 A-TSR greater than or equal to 50% 150 % Level 2 A-TSR less than 50% and greater than or equal to 20% 100 % Level 3 A-TSR less than 20% and greater than or equal to -20% 50 % Level 4 A-TSR less than -20% — % The following table summarizes our performance restricted stock unit grants and the grant date fair value for the A-TSR performance metric: Grant Date Shares Awarded Grant Date Fair Value Shares Forfeited December 7, 2022 51,500 $ 23.22 3,100 December 7, 2023 40,700 $ 30.35 — December 4, 2024 50,900 $ 29.97 — March 1, 2025 2,200 $ 18.89 — During the nine months ended July 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, 2025, w e have deemed 31,189 shares related to the December 2022 grant of performance restricted stock units as probable to vest. 22 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes amounts expensed as selling, general and administrative expense related to restricted stock awards, stock options, restricted stock units, performance share awards and performance restricted stock units for the three and nine months ended July 31, 2025 and 2024 (in thousands): Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 Restricted stock awards $ 607 $ 514 $ 1,795 $ 1,333 Restricted stock units 700 39 41 1,815 Performance share awards 163 444 753 1,372 Performance restricted stock units 330 280 967 826 Total compensation expense $ 1,800 $ 1,277 $ 3,556 $ 5,346 Treasury Shares We record treasury stock purchases under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Shares are generally issued from treasury stock at the time of grant of restricted stock awards, upon the exercise of stock options, and upon the vesting of performance restricted stock units. On the subsequent issuance of treasury shares, we record proceeds in excess of cost as an increase in additional paid in capital. A deficiency of such proceeds relative to costs would be applied to reduce paid-in-capital associated with prior issuances to the extent available, with the remainder recorded as a charge to retained earnings. There were no charges to retained earnings during the nine months ended July 31, 2025. The following table summarizes the treasury stock activity during the nine months ended July 31, 2025: Nine Months Ended July 31, 2025 Beginning Balance as of November 1, 2024 4,014,431 Restricted stock awards granted ( 107,682 ) Performance restricted stock units vested ( 69,825 ) Stock options exercised ( 9,300 ) Treasury stock repurchases 1,509,407 Balance at July 31, 2025 5,337,031 13. Other, net Other, net on the condensed consolidated statements of income consisted of the following for the three and nine months ended July 31, 2025 and 2024 (in thousands): Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 Foreign currency transaction gains (losses) $ 949 $ ( 38 ) $ 118 $ ( 94 ) Foreign currency derivative gains (losses) ( 546 ) 9,200 289 9,200 Pension service (costs) benefit ( 50 ) — ( 39 ) 903 Interest income 591 300 1,678 772 Other ( 89 ) 12 ( 121 ) ( 261 ) Other, net $ 855 $ 9,474 $ 1,925 $ 10,520 23 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) l4. Segment Information In our Annual Report on Form 10-K as of October 31, 2024 and our Quarterly Reports on Form 10- Q as of January 31, 2025 and April 30, 2025, respectively, we presented 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. During the third quarter of 2025, we restructured our reportable segments due to changes in our organizational structure and how our CODM makes key operating decisions, allocates resources and assesses the performance of our business. As a result, we now report in three operating segments: Hardware Solutions, which provides window and door hardware and screens; Extruded Solutions, which supplies insulating glass spacers, vinyl window and door profiles, seals, and weatherstripping; and Custom Solutions, which provides wood, mixing, and building access solutions. We continue to maintain a grouping called Unallocated Corporate & Other, which includes transaction expenses, stock-based compensation, long-term incentive awards based on the performance of our common stock and other factors, certain severance and legal costs not deemed to be allocable to all segments, depreciation of corporate assets, interest expense, other, net, income taxes 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. 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 periods ended July 31, 2025 was $ 11.5 million and $ 29.4 million, respectively, and $ 6.6 million and $ 20.8 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: (1) similar nature of products serving the building products industry, primarily the fenestration business; (2) similar production processes, although there are some differences in the amount of automation amongst operating plants; (3) similar types or classes of customers, namely the primary OEMs; (4) similar distribution methods for product delivery, although the extent of the use of third-party distributors will vary amongst the businesses; (5) similar regulatory environment; and (6) converging long-term economic similarities. 24 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) Segment information for the three and nine months ended July 31, 2025 and 2024, and total assets as of July 31, 2025 and October 31, 2024 are summarized in the following table (in thousands): Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total Three Months Ended July 31, 2025 Net sales $ 227,116 $ 174,427 $ 102,264 $ ( 8,534 ) 495,273 Depreciation and amortization 16,987 6,989 4,716 5,190 33,882 Operating loss ( 157,445 ) ( 24,867 ) ( 76,093 ) ( 12,430 ) ( 270,835 ) Capital expenditures 6,009 4,981 3,258 204 14,452 Three Months Ended July 31, 2024 Net sales $ 75,460 $ 134,552 $ 72,667 $ ( 2,334 ) $ 280,345 Depreciation and amortization 1,225 5,460 4,211 57 10,953 Operating income (loss) 8,237 20,654 1,924 ( 7,373 ) 23,442 Capital expenditures 2,278 2,728 1,204 42 6,252 Nine Months Ended July 31, 2025 Net sales $ 614,791 $ 478,024 $ 284,809 $ ( 29,829 ) $ 1,347,795 Depreciation and amortization 38,818 22,066 15,693 1,237 77,814 Operating (loss) income ( 160,550 ) 14,155 ( 68,973 ) ( 21,524 ) ( 236,892 ) Capital expenditures 16,305 15,004 7,519 2,168 40,996 Nine Months Ended July 31, 2024 Net sales $ 204,127 $ 379,860 $ 208,201 $ ( 6,487 ) $ 785,701 Depreciation and amortization 3,531 16,616 12,685 167 32,999 Operating income (loss) 15,940 54,404 1,695 ( 20,043 ) 51,996 Capital expenditures 9,874 7,739 5,398 424 23,435 25 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The following tables reconcile our segment presentation, as previously reported in our Quarterly Report on Form 10-Q for the three and nine months ended July 31, 2024, to the current presentation (in thousands): NA Fenestration EU Fenestration NA Cabinet Components 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 Hardware Solutions (1) Extruded Solutions (2) Custom Solutions (3) Unallocated Corp. & Other Total Three Months Ended July 31, 2024 Net sales $ 75,460 $ 134,552 $ 72,667 $ ( 2,334 ) $ 280,345 Depreciation and amortization 1,225 5,460 4,211 57 10,953 Operating income (loss) 8,237 20,654 1,924 ( 7,373 ) 23,442 Capital expenditures 2,278 2,728 1,204 42 6,252 NA Fenestration EU Fenestration NA Cabinet Components Unallocated Corp. & Other Total Nine Months Ended July 31, 2024 Net sales $ 478,027 $ 165,637 $ 145,663 $ ( 3,626 ) $ 785,701 Depreciation and amortization 15,887 7,705 9,240 167 32,999 Operating income (loss) 44,652 30,597 ( 3,209 ) ( 20,044 ) 51,996 Capital expenditures 15,799 3,253 3,959 424 23,435 Hardware Solutions (1) Extruded Solutions (2) Custom Solutions (3) Unallocated Corp. & Other Total Nine Months Ended July 31, 2024 Net sales $ 204,127 $ 379,860 $ 208,201 $ ( 6,487 ) $ 785,701 Depreciation and amortization 3,531 16,616 12,685 167 32,999 Operating income (loss) 15,940 54,404 1,695 ( 20,043 ) 51,996 Capital expenditures 9,874 7,739 5,398 424 23,435 (1) The Hardware Solutions segment contains a portion of the previously reported NA Fenestration segment. (2) The Extruded Solutions segment contains a portion of the NA Fenestration segment and the EU Fenestration segment. (3) The Custom Solutions segment contains a portion of the NA Fenestration segment and the NA Cabinet Components segment. 26 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the nine months ended July 31, 2025 (in thousands): Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total Balance as of October 31, 2024 $ 170,367 $ 243,633 $ 160,711 $ — $ 574,711 Measurement period adjustment 6,984 ( 9,986 ) ( 987 ) — ( 3,989 ) Asset impairment charge ( 163,198 ) ( 54,934 ) ( 84,152 ) — ( 302,284 ) Foreign currency translation adjustment 428 2,366 227 — 3,021 Balance as of July 31, 2025 $ 14,581 $ 181,079 $ 75,799 $ — $ 271,459 As a result of the impairment test performed during the three months ended July 31, 2025, we recognized non-cash goodwill impairment losses totaling $ 302.3 million . Of this amount, $ 163.2 million pertains to two out of the three reporting units within the Hardware Solutions reportable segment, $ 54.9 million relates to one of the four reporting units within Extruded Solutions, and $ 84.2 million impacts all three reporting units within the Custom Solutions reportable segment. One of the reporting units within Hardware Solutions and one reporting unit within Custom Solutions were fully impaired, resulting in seven reporting units remaining with goodwill. For further details of Goodwill, see Note 6, “Goodwill & Intangible Assets,” located herewith. See Note 2, “Acquisition”, for further details on the measurement period adjustments. We did not allocate non-operating amounts or income tax impacts 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, 2025 and 2024 (in thousands): Three Months Ended Nine Months Ended July 31, July 31, 2025 2024 2025 2024 Operating (loss) income $ ( 270,835 ) $ 23,442 $ ( 236,892 ) $ 51,996 Interest expense ( 14,218 ) ( 878 ) ( 42,344 ) ( 2,896 ) Other, net 855 9,474 1,925 10,520 Income tax benefit (expense) 8,191 ( 6,688 ) 6,934 ( 12,644 ) Net (loss) income $ ( 276,007 ) $ 25,350 $ ( 270,377 ) $ 46,976 27 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 15. Earnings Per Share We compute basic earnings per share by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per common and potential common shares include the weighted-average of additional shares associated with the incremental effect of dilutive employee stock options, non-vested restricted stock as determined using the treasury stock method prescribed by U.S. 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, 2025 and 2024 were calculated as follows (in thousands, except per share data): Net (Loss) Income Weighted-Average Shares Per Share Three Months Ended July 31, 2025 Basic and diluted loss per common share $ ( 276,007 ) 45,691 $ ( 6.04 ) 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 Nine Months Ended July 31, 2025 Basic and diluted loss per common share $ ( 270,377 ) 46,395 $ ( 5.83 ) 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 We do not include equity instruments in our calculation of diluted earnings per share if those instruments would be anti-dilutive. We had anti-dilutive restricted stock award equivalents for the three and nine months ended July 31, 2025 of 37,142 and 21,538 , respectively, and zero and 1,364 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. 28 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 16. 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, 2025. Accounting Standards Not Yet Adopted 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. In December 2023, the FASB issued “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes updates to the income tax disclosures related to the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The amendments should be applied prospectively, however retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. 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. 29 Table of Contents Unless the context indicates otherwise, references to “Quanex,” the “Company,” “we,” “us,” and “our” refer to the consolidated business operations of Quanex Building Products Corporation and its subsidiaries. Cautionary Note Regarding Forward-Looking Statements Certain of the statements contained in this document and in documents incorporated by reference herein, including those made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” include “forward-looking” statements as defined under the Private Securities Litigation Reform Act of 1995. Generally, the words “expect,” “believe,” “intend,” “estimate,” “anticipate,” “project,” “will,” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are statements as to matters that are not historical facts, and include statements about our plans, objectives, expectations and intentions, including (1) all statements which address future operating performance, (2) events or developments that we expect or anticipate will occur in the future, including statements relating to the Tyman Acquisition and statements relating to volume, sales, operating income, and earnings per share, and (3) statements expressing general outlook about future operating results. Forward-looking statements also include any statements relating to future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses, future prospects or business or management strategies, and the expansion and/or growth of the operations of the Company. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations. As and when made, we believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, provided, that we cannot give any assurance that such expectations will prove to be correct. However, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to the following: • 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 foreign trade relations and associated tariffs could result in a global trade war; • 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, Italy and elsewhere; • changes in non-pass-through raw material costs; • changes in domestic and international economic conditions; • changes in availability and prices of raw material including inflationary pressures and supply chain challenges, which could be exacerbated by political or global unrest such as the current military conflicts in Ukraine and Gaza; • our ability to attract and retain skilled labor; • changes in purchases by our principal customers; • fluctuations in foreign currency exchange rates; • our ability to maintain an effective system of internal controls; • our ability to successfully implement our internal operating plans and acquisition strategies; • our ability to successfully implement our plans with respect to information technology (IT) systems and processes; • our ability to control costs and increase profitability; • changes in environmental laws and regulations; • changes in warranty obligations; • changes in energy costs and the availability of energy; • changes in tax laws, and interpretations thereof; • changes in interest rates; • our ability to service our debt facilities and remain in good standing with our lenders; • our ability to remediate 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; • our ability to maintain good relationships with our suppliers, subcontractors, and key customers; 30 Table of Contents • the impairment of goodwill or our long-lived assets; and • the resolution of litigation and other legal proceedings. For information on additional factors that could cause actual results to differ materially, please refer to the section entitled “Item 1A. Risk Factors” within this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. About Third-Party Information In this report, we rely on and refer to information regarding industry data obtained from market research, publicly available information, industry publications, U.S. government sources and other third parties. Although we believe this information is reliable, we cannot guarantee the accuracy or completeness of the information and have not independently verified it. 31 Table of Contents