Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes as of July 31, 2025, and for the three and nine months ended July 31, 2025 and 2024, included elsewhere herein. For additional information pertaining to our business, including risk factors which should be considered before investing in our common stock, refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
Our Business
We are 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 prov ide 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.
We continue to invest in organic growth initiatives and we intend to continue evaluating business acquisitions that allow us to expand our manufacturing and distribution footprint, enhance our product offerings, provide new complementary technology, enhance our leadership position within the markets we serve and expand into new markets or service lines. We have disposed of non-core businesses in the past, and continue to evaluate our business portfolio to ensure that we are investing in markets where we believe there is potential future growth.
During the three months ended July 31, 2025, in connection with our announced restructuring , we re-evaluated our reportable operating segment presentation and adjusted our segment structure to better align our business operations. As a result, we now report three reportable operating segments: Hardware Solutions, Extruded Solutions, and Custom 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.
Recent Transactions and Events
During the three months ended July 31, 2025, we restructured our reportable operating segments which triggered the requirement to assess our goodwill for potential impairment. The testing of our goodwill resulted in an asset impairment of $302.3 million. Of the goodwill impairment amount recorded in the third quarter, $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 changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
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We are monitoring the rapidly evolving tariff and global trade policies and we are working with our suppliers and customers to mitigate potential impacts on our business. The extent and duration of the tariffs and the resulting impact on general economic conditions on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions that may be granted, availability and cost of alternative sources of supply and demand for our products in affected markets.
On August 1, 2024, we completed the acquisition of Tyman plc, a company incorporated in England and Wales (the “Tyman Acquisition”). The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised 14,139,477 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.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflicts currently ongoing in Ukraine and Gaza. Although the length and impact of these ongoing military conflicts are highly unpredictable, the conflicts could lead to market or operational disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Russia, Europe’s largest provider of natural gas, has significantly reduced the export of natural gas compared to the beginning of the conflict resulting in the increase in natural gas prices and the potential for natural gas shortages. In addition, one of the suppliers of a vapor barrier used in the production of our insulating glass spacers is located in Israel and may experience a disruption as a result of the ongoing conflict in Gaza. If these trends continues, this would not only negatively impact our European manufacturing facilities, this may also impact our customers and their demand for our products. We continue to monitor these situations and their impact on our business.
The conflicts in Ukraine and Gaza and their impacts on the global economy, including inflation and the price of raw materials, supply chain disruptions, and the volatility in interest rates including home mortgage rates, are unpredictable and there may be developments outside our control requiring us to adjust our operating plan.
Market Overview and Outlook
We believe the primary drivers of our operating results continue to be North American residential remodeling and replacement (R&R) and new home construction activity. We believe that housing starts and window shipments are indicators of activity levels in the homebuilding and window industries, and we use this data, as published by or derived from third-party sources, to evaluate the market. We have historically evaluated the market using data from the National Association of Homebuilders (NAHB) with regard to housing starts and R&R activity, and published reports by Ducker Worldwide, LLC (Ducker), a consulting and research firm, with regard to window shipments in the U.S.
In July 2025 , the NAHB forecasted calendar-year housing starts to be approximately 1.4 million in the 2025, 2026 and 2027 calendar-years. In May 2025 , the Ducker forecast indicated that total window shipments are expected to decrease 4.3% and 1.5% in calendar-year 2025 and 2026.
Several commodities in our business are subject to pricing fluctuations, including polyvinyl resin (PVC), titanium dioxide (TiO2), petroleum products, stainless steel, zinc, aluminum and wood. For the majority of our customers and critical suppliers, we have price adjusters in place which effectively share the base pass-through price changes for our primary commodities with our customers commensurate with the market at large. Our long-term exposure to these price fluctuations is somewhat mitigated due to the contractual component of the adjuster program. However, these adjusters are not in place with all customers and for all commodities, and there is a level of exposure to such volatility due to the lag associated with the timing of price updates in accordance with our customer agreements, particularly with regard to hardwoods. In addition, some of these commodities are in high demand, particularly in Europe, which can affect the cost of the raw materials, a portion of which we may not be able to fully recover.
The global economy remains uncertain due to currency devaluations, political unrest, terror threats, global pandemics, and even the political landscape in the U.S. These and other macro-economic factors have impacted the global financial markets, which may have contributed to significant changes in foreign currencies. We continue to monitor our exposure to changes in exchange rates.
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Results of Operations
Three Months Ended July 31, 2025 Compared to Three Months Ended July 31, 2024
Three Months Ended July 31,
2025 2024 Change $ % Variance
(Dollars in thousands)
Net sales $ 495,273 $ 280,345 $ 214,928 77%
Cost of sales (excluding depreciation and amortization) 357,305 209,441 147,864 71%
Selling, general and administrative 71,270 36,509 34,761 95%
Restructuring charges 1,367 — 1,367 —%
Depreciation and amortization 33,882 10,953 22,929 209%
Asset impairment charges 302,284 — 302,284 —%
Operating (loss) income (270,835) 23,442 (294,277) (1,255)%
Interest expense (14,218) (878) (13,340) 1,519%
Other, net 855 9,474 (8,619) (91)%
Income tax benefit (expense) 8,191 (6,688) 14,879 (222)%
Net (loss) income $ (276,007) $ 25,350 $ (301,357) (1,189)%
Our period-over-period results by reportable segment follow.
Changes Related to Operating Income by Reportable Segment:
Hardware Solutions
Three Months Ended July 31,
2025 2024 $ Change % Variance
(Dollars in thousands)
Net sales $ 227,116 $ 75,460 $ 151,656 201%
Cost of sales (excluding depreciation and amortization) 170,282 59,092 111,190 188%
Selling, general and administrative 32,954 6,906 26,048 377%
Restructuring charges 1,140 — 1,140 —%
Depreciation and amortization 16,987 1,225 15,762 1,287%
Asset impairment charges 163,198 — 163,198 —%
Operating (loss) income $ (157,445) $ 8,237 $ (165,682) (2,011)%
Operating (loss) income margin (69) % 11 %
Net Sales. Net sales increased $151.7 million, or 201%, for the three months ended July 31, 2025 compared to the same period in 2024, which was primarily driven by an increase of $150.8 million related to the acquisition of the Tyman business and a $2.3 million increase in price and raw material indexes, partially offset by a $1.4 million decrease in volumes mainly due to softer market demand driven by weaker consumer confidence.
Cost of Sales. The cost of sales increased $111.2 million, or 188%, for the three months ended July 31, 2025 compared to the same period in 2024. Cost of sales increased primarily due to the acquisition of the Tyman business and pricing and inflation of raw materials during the period partially offset by a decrease in volumes.
Selling, General and Administrative. S elling, general and administrative expenses increased $26.0 million, or 377%, for the three months ended July 31, 2025 compared to the sa me period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $163.2 million relate to goodwill impairment incurred during the three months ended July 31, 2025. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
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Extruded Solutions
Three Months Ended July 31,
2025 2024 $ Change % Variance
(Dollars in thousands)
Net sales $ 174,427 $ 134,552 $ 39,875 30%
Cost of sales (excluding depreciation and amortization) 116,597 92,790 23,807 26%
Selling, general and administrative 20,740 15,648 5,092 33%
Restructuring charges 34 — 34 —%
Depreciation and amortization 6,989 5,460 1,529 28.0%
Asset impairment charges 54,934 — 54,934 —%
Operating (loss) income $ (24,867) $ 20,654 $ (45,521) (220)%
Operating (loss) income margin (14) % 15 %
Net Sales . Net sales increased $39.9 million, or 30%, for the three months ended July 31, 2025 compared to the same period in 2024 primarily due an increase of $39.9 million related to the acquisition of the Tyman business, a $0.9 million increase in price and raw material indexes, and $2.6 million of favorable foreign currency rate change, partially offset by a $3.5 million decrease in volumes mainly due to softer market demand driven by weaker consumer confidence.
Cost of Sales. The cost of sales increased $23.8 million, or 26%, for the three months ended July 31, 2025 compared to the same period in 2024. Cost of sales increased primarily due to the acquisition of the Tyman business, pricing and inflation of raw materials, and foreign currency impacts, partially offset by a decrease in volumes.
Selling, General and Administrative. Selling, general and administrative expense increased $5.1 million, or 33%, for the three months ended July 31, 2025 compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $54.9 million relate to goodwill impairment incurred during the three months ended July 31, 2025. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
Custom Solutions
Three Months Ended July 31,
2025 2024 $ Change Variance %
(Dollars in thousands)
Net sales $ 102,264 $ 72,667 $ 29,597 41%
Cost of sales (excluding depreciation and amortization) 77,755 59,973 17,782 30%
Selling, general and administrative 11,708 6,559 5,149 79%
Restructuring charges 26 — 26 —%
Depreciation and amortization 4,716 4,211 505 12%
Asset impairment charges 84,152 — 84,152 —%
Operating (loss) income $ (76,093) $ 1,924 $ (78,017) (4,055)%
Operating (loss) income margin (74) % 3 %
Net Sales . N et sales increased $29.6 million, or 41%, for the three months ended July 31, 2025 compared to the same period in 2024, which was primarily driven by an increase of $27.4 million related to the acquisition of the Tyman business, a $1.7 million increase in price and raw material indexes, and a $0.5 million increase in volumes.
Cost of Sales . Cost of sales increased $17.8 million, or 30%, for the three months ended July 31, 2025 compared to the same period in 2024. Cost of sales increased primarily due to the acquisition of the Tyman business, pricing and inflation of raw materials during the period, and an increase in volumes.
Selling, General and Administrative . S elling, general and administrative expenses increased $5.1 million , or 79%, for the three months ended July 31, 2025 compared to the sa me period in 2024. The increase is primarily due to increases in labor costs
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and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $84.2 million relate to goodwill impairment incurred during the three months ended July 31, 2025. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
Unallocated Corporate & Other
Three Months Ended July 31,
2025 2024 $ Change Variance %
(Dollars in thousands)
Net sales $ (8,534) $ (2,334) $ (6,200) 266%
Cost of sales (excluding depreciation and amortization) (7,329) (2,414) (4,915) 204%
Selling, general and administrative 5,868 7,396 (1,528) (21)%
Restructuring charges 167 — 167 —%
Depreciation and amortization 5,190 57 5,133 9,005%
Operating loss $ (12,430) $ (7,373) $ (5,057) 69%
Net Sales . Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the three months ended July 31, 2025 and 2024.
Cost of Sales . Cost of sales for Unallocated Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.
Selling, General and Administrative . Selling, general and administrative expenses decreased $1.5 million, or 21%, for the three months ended July 31, 2025 compared to the same period in 2024. This decrease is primarily attributable to a decrease in transaction and advisory fees and lower compensation expense, including the valuations of our stock-based compensation awards, partially offset by an increase in restructuring costs and medical expenses during the three months ended July 31, 2025 as compared to the prior year period.
Changes related to Non-Operating Items:
Interest Exp ense . Interest expense increased $13.3 million for the three months ended July 31, 2025 compared to the same period in 2024 as a result of an increase in borrowings outstanding during the three months ended July 31, 2025 as compared to the prior year period.
Income Taxes . We recorded an income tax benefit of $8.2 million on pre-tax loss of $284.2 million for the three months ended July 31, 2025, an effective rate of 2.9%, and income tax expense of $6.7 million on pre-tax income of $32.0 million for the three months ended July 31, 2024, an effective rate of 20.9%. The decrease in the effective tax rate year-over-year was primarily driven by discrete items including the asset impairment charges related to goodwill impairment.
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Nine Months Ended July 31, 2025 Compared to Nine Months Ended July 31, 2024
Nine Months Ended July 31,
2025 2024 Change $ % Variance
(Dollars in thousands)
Net sales $ 1,347,795 $ 785,701 $ 562,094 72%
Cost of sales (excluding depreciation and amortization) 986,129 597,127 389,002 65%
Selling, general and administrative 208,253 103,579 104,674 101%
Restructuring charges 10,207 — 10,207 100%
Depreciation and amortization 77,814 32,999 44,815 136%
Asset impairment charges 302,284 — 302,284 —%
Operating (loss) income (236,892) 51,996 (288,888) (556)%
Interest expense (42,344) (2,896) (39,448) 1,362%
Other, net 1,925 10,520 (8,595) (82)%
Income tax benefit (expense) 6,934 (12,644) 19,578 (155)%
Net (loss) income $ (270,377) $ 46,976 $ (317,353) (676)%
Our period-over-period results by reportable segment follow.
Changes Related to Operating Income by Reportable Segment:
Hardware Solutions
Nine Months Ended July 31,
2025 2024 $ Change % Variance
(Dollars in thousands)
Net sales $ 614,791 $ 204,127 $ 410,664 201%
Cost of sales (excluding depreciation and amortization) 466,600 165,952 300,648 181%
Selling, general and administrative 98,570 18,704 79,866 427%
Restructuring charges 8,155 — 8,155 —%
Depreciation and amortization 38,818 3,531 35,287 999%
Asset impairment charges 163,198 — 163,198 —%
Operating (loss) income $ (160,550) $ 15,940 $ (176,490) (1,107)%
Operating (loss) income margin (26) % 8 %
Net Sales. Net sales increased $410.7 million, or 201%, for the nine months ended July 31, 2025 compared to the same period in 2024, which was primarily driven by an increase of $413.4 million related to the acquisition of the Tyman business and a $6.5 million increase in price and raw material indexes, partially offset by a $9.4 million decrease in volumes mainly due to softer market demand driven by weaker consumer confidence.
Costs of Sales. The cost of sales increased $300.6 million, or 181%, for the nine months ended July 31, 2025 as compared to the same period in 2024. Cost of sales, including labor, increased primarily due to the acquisition of the Tyman business and pricing and inflation of raw materials during the period partially offset by a decrease in volumes.
Se lling, General and Administrative. S elling, general and administrative expenses increased $79.9 million, or 427%, for the nine months ended July 31, 2025 as compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $163.2 million relate to goodwill impairment incurred during the three months ended July 31, 2025. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
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Extruded Solutions
Nine Months Ended July 31,
2025 2024 $ Change Variance %
(Dollars in thousands)
Net sales $ 478,024 $ 379,860 $ 98,164 26%
Cost of sales (excluding depreciation and amortization) 325,914 263,107 62,807 24%
Selling, general and administrative 60,921 45,733 15,188 33%
Restructuring charges 34 — 34 —%
Depreciation and amortization 22,066 16,616 5,450 33%
Asset impairment charges 54,934 — 54,934 —%
Operating income $ 14,155 $ 54,404 $ (40,249) (74)%
Operating income margin 3 % 14 %
Net Sales. Net sales increased $98.2 million, or 26%, comparing the nine months ended July 31, 2025 to the same period in 2024, which was primarily due to an increase of $115.2 million related to the acquisition of the Tyman business and a $2.9 million of favorable foreign currency rate change, partially offset by a $17.9 million decrease in volumes mainly due to softer market demand driven by weaker consumer confidence and a $2.0 million decrease in price and raw material indexes.
Cost of Sales. The cost of sales increased $62.8 million, or 24%, for the nine months ended July 31, 2025 compared to the same period in 2024. Cost of sales increased primarily due to the acquisition of the Tyman business partially, offset by decrease in volumes, pricing and deflation of raw materials during the period and foreign currency impacts.
Selling, General and Administrative. Selling, general and administrative expense increased $15.2 million, or 33%, for the nine months ended July 31, 2025 compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $54.9 million relate to goodwill impairment incurred during the three months ended July 31, 2025. For additional discussion of our goodwill, see Note 6, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 14, “Segment Information.”
Custom Solutions
Nine Months Ended July 31,
2025 2024 $ Change Variance %
(Dollars in thousands)
Net sales $ 284,809 $ 208,201 $ 76,608 37%
Cost of sales (excluding depreciation and amortization) 219,755 174,365 45,390 26%
Selling, general and administrative 34,156 19,456 14,700 76%
Restructuring charges 26 — 26 —%
Depreciation and amortization 15,693 12,685 3,008 24%
Asset impairment charges 84,152 — 84,152 —%
Operating (loss) income $ (68,973) $ 1,695 $ (70,668) (4,169)%
Operating (loss) income margin (24) % 1 %
Net Sales . Net sales increased $76.6 million, or 37%, for the nine months ended July 31, 2025 compared to the same period in 2024, which was primarily due to an increase of $74.2 million related to the acquisition of the Tyman business and a $5.3 million increase in price and raw material indexes, partially offset by a $2.9 million decrease in volumes mainly due to softer market demand driven by weaker consumer confidence.
Cost of Sales . Cost of sales increased $45.4 million, or 26%, for the nine months ended July 31, 2025 compared with the same period in 2024. Cost of sales increased primarily due to the acquisition of the Tyman business and pricing and inflation of raw materials during the period partially offset by a decrease in volumes.
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Selling, General and Administrative . Selling, general and administrative expense increased $14.7 million, or 76%, for the nine months ended July 31, 2025 compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling, general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Asset impairment charges. Asset impairment charges of $84.2 million relate to goodwill impairment incurred during the three months ended July 31, 2025. 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.”
Unallocated Corporate & Other
Nine Months Ended July 31,
2025 2024 $ Change Variance %
(Dollars in thousands)
Net sales $ (29,829) $ (6,487) $ (23,342) 360%
Cost of sales (excluding depreciation and amortization) (26,140) (6,297) (19,843) 315%
Selling, general and administrative 14,606 19,686 (5,080) (26)%
Restructuring charges 1,992 — 1,992 —%
Depreciation and amortization 1,237 167 1,070 641%
Operating loss $ (21,524) $ (20,043) $ (1,481) 7%
Net Sales . Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the nine months ended July 31, 2025 and 2024.
Cost of Sales . Cost of sales for Unallocated Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.
Selling, General and Administrative . Selling, general and administrative expenses decreased $5.1 million, or 26%, for the nine months ended July 31, 2025 compared to the same period in 2024. This decrease is primarily attributable to a decrease in transaction and advisory fees and lower compensation expense, including the valuations of our stock-based compensation awards, partially offset by an increase in restructuring costs and medical expenses during the nine months ended July 31, 2025 as compared to the prior year period.
Changes related to Non-Operating Items:
Interest Exp ense . Interest expense increased $39.4 million for the nine months ended July 31, 2025 compared to the same period in 2024 primarily as a result of higher borrowings outstanding during the nine months ended July 31, 2025 as compared to the prior year period.
Income Taxes . We recorded income tax benefit of $6.9 million on pre-tax loss of $277.3 million for the nine months ended July 31, 2025, an effective rate of 2.5%, and income tax expense of $12.6 million on a pre-tax income of $59.6 million for the nine months ended July 31, 2024, an effective rate of 21.2%. The decrease in the effective tax rate year-over-year was primarily driven by discrete items including the asset impairment charges related to goodwill impairment.
Liquidity and Capital Resources
Overview
Historic ally, our principal sources of funds have been cash on hand, cash flow from operations, and borrowings under our credit facilities.
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 became effective on August 1, 2024 upon the completion of the Tyman Acquisition.
The Amended Credit Agreement (i) increased the senior secured revolving credit facility to an aggregate principal amount of $475 million (the “Revolving Credit Facility”) and (ii) provides for a senior secured term loan A facility in an aggregate
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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 will be 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.
As of July 31, 2025, we had $66.3 million of cash and equivalents, $672.5 million outstanding under the Facilities, $6.1 million of outstanding letters of credit, and $61.2 million outstanding under finance leases and other debt. Of the $61.2 million outstanding under finance leases and other de bt, $58.9 million relates to real estate leases. We had $271.4 million avail able for use under the Revolving Credit Agreement at July 31, 2025.
During December 2021, our Board of Directors approved a stock repurchase program that authorized the repurchase of up to $75.0 million worth of shares of our common stock. Repurchases under the program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors. During the three months ended July 31, 2025, we purchased 100,000 shares under this program and as of July 31, 2025 we have a maximum of $33.6 million available to purchase shares under this program. The program does not have an expiration date or a limit on the number of shares that may be purchased.
We repatriated $42.4 million and $33.2 million of f oreign cash during the nine months ended July 31, 2025 and 2024, respectively. We expect to repatriate excess cash moving forward and use the funds to retire debt or meet current working capital needs. In the U.K., we insure against a portion of our credit losses. We believe our business model, our current cash reserves and our strong balance sheet leave us well-positioned to manage our business and remain in compliance with our debt covenants.
Analysis of Cash Flow
The following table summarizes our cash flow results for the nine months ended July 31, 2025 and 2024:
Nine Months Ended
July 31,
2025 2024
(Dollars in thousands)
Cash provided by operating activities $ 76,643 $ 83,333
Cash used for investing activities $ (40,635) $ (23,320)
Cash used for financing activities $ (87,379) $ (25,456)
Operating Activities . Cash provided by operating activities decreased $6.7 million for the nine months ended July 31, 2025 compared to the same period in 2024. The decrease in operating cash flow is primarily due to unfavorable changes in working capital, partially offset by an increase in net income excluding the impact of non-cash items such as asset impairment charges and depreciation and amortization. Unfavorable changes in working capital are primarily due to unfavorable changes in prepaid expenses, accounts receivable, accrued liabilities and other long-term liabilities, partially offset by favorable changes in accounts payable and inventory.
Investing Activities. Cash used for investing activities increased $17.3 million for the nine months ended July 31, 2025 compared to the same period in 2024, primarily as a result of an increase in capital expenditures during the nine months ended July 31, 2025 compared to the prior year period. Capital expenditures have increased primarily due to spending for businesses acquired in the Tyman Acquisition.
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Financing Activities. Cash used for financing activities increased $61.9 million for the nine months ended July 31, 2025 compared to the same period in 2024. The change in financing cash flows is primarily as a result of an increase in the purchase of treasury shares and an increase in repayments of long-term debt.
Liquidity Requirements
Historically, our strategy for deploying cash has been to invest in organic growth opportunities, develop our infrastructure, and ex plore strategic acquisitions. Other uses of cash include paying cash dividends to our shareholders and repurchasing our common stock. During the nine months ended July 31, 2025 and 2024, we repatriated $42.4 million and $33.2 million, respectively, of foreign earnings from our foreign locations. We maintain cash balances in foreign countries which total $42.0 million as of July 31, 2025.
Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. Estimates and assumptions about future events and their effects cannot be perceived with certainty. Estimates may change as new events occur, as more experience is acquired, as additional information becomes available and as our operating environment changes. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, and that we believe provide a basis for making judgments about the carrying value of assets and liabilities that are not readily available through open market quotes. We must use our judgment with regard to uncertainties in order to make these estimates. Actual results could differ from these estimates.
For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. Our critical accounting policies and estimates have not changed materially during the nine months ended July 31, 2025.
New Accounting Pronouncements
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 guidance is 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.
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