What changed in this filing

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Item 1. Business

2025-12-12 compared with 2024-12-16 · 30 added, 32 removed, 125 unchanged (33% of the section changed)

Quanex was incorporated in Delaware on December 12, 2007, as Quanex Building Products Corporation.

We currently manufacture and distribute components for original equipment manufacturers (OEM) in the building products industry.

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

Examples of fenestration components include energy-efficient flexible insulating glass spacers, extruded vinyl profiles, window and door screens, precision-formed metal and wood products, window and door seals, and window and door hardware.

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

We use low-cost production processes and engineering expertise to provide our customers with specialized products for their specific applications.

We currently manufacture and distribute components for original equipment manufacturers (OEM) in the building products industry, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets.

Examples of components include energy-efficient flexible insulating glass spacers, extruded vinyl profiles, window and door screens, precision-formed metal and wood products, window and door seals, and window and door hardware.

In addition, we provide certain other components and products, which include solar panel sealants, trim moldings, vinyl decking, water retention barriers, conservatory roof components, and commercial access solutions.

We use cost-effective production processes and engineering expertise to provide our customers with specialized products for their specific applications.

We believe these capabilities provide us with unique competitive advantages.

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Since the spin-off in 2008, we have evolved our business by making investments in organic growth initiatives and taking a disciplined approach to new business and strategic acquisition opportunities, while disposing of non-core businesses.

On August 1, 2024, we completed our acquisition of Tyman plc, a company incorporated in England and Wales.

Most recently, on August 1, 2024, we completed our acquisition of Tyman plc, a company incorporated in England and Wales (“Tyman”).

This strategic acquisition creates an enlarged group with significant cross-selling opportunities amongst a highly complementary customer base, increases the Company’s global reach by adding Tyman’s international footprint, enhances scale, optimizes the Company’s asset portfolio, and moves Quanex closer to being a comprehensive solutions provider.

As of October 31, 2024, we operated 35 manufacturing facilities located in 18 states in the U.S., seven facilities in the U.K., three facilities in Mexico, two facilities in Italy, one facility in Germany, and one facility in Canada.

These facilities feature efficient plant design and flexible manufacturing processes, enabling us to produce a wide variety of custom engineered products and components primarily focused on the window and door segment of the residential building products markets.

As of October 31, 2025, we operated 34 manufacturing facilities located in 18 states in the U.S., 7 facilities in the U.K., 3 facilities in Mexico, 2 facilities in Italy, 1 facility in Germany, and 1 facility in Canada.

These facilities feature efficient plant design and flexible manufacturing processes, enabling us to produce a wide variety of custom engineered products and components.

We are able to maintain minimal levels of finished goods inventories at most locations because we typically manufacture products upon order to customer specifications.

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2027 982 3% 389 (2)% 108 2% 1,479

Ducker Worldwide LLC, a consulting and research firm, indicated in November 2024 that window shipments in the residential remodeling and replacement (R&R) market are expected to decrease approximately 5.9% for the calendar-year 2024 and increase approximately 4.0% in 2025.

Derived from reports published by Ducker, the overall decrease in window shipments for the trailing twelve months ended September 30, 2024 was 0.7%.

During this period, new construction activity decreased 2.5% and R&R replacement increased 1.1% respectively.

Ducker Worldwide LLC, a consulting and research firm, indicated in November 2025 that window shipments in the residential remodeling and replacement (R&R) market are expected to decrease approximately 5.2% and 1.9% in the calendar-years ended 2025 and 2026, respectively .

Derived from reports published by Ducker, overall window shipments decreased 3.9%, new construction activity decreased 5.3%, and R&R replacement decreased 2.6%, respectively, for the trailing twelve months ended September 30, 2025.

We have noted the following trends which we believe affect our industry:

• the recent growth in the hous ing market over the past several years has been predominately in new construction which has outpaced the growth in the residential remodeling and replacement sector;

• the growth in the hous ing market over the past several years has been predominately in new construction which has outpaced the growth in the residential remodeling and replacement sector;

• programs in the U.S.

such as Energy Star have improved customer awareness of the technological advances in window and door energy-efficiency, but the government has been reluctant to enforce stricter energy standards;

• supply chain disruptions and inflationary pressures related to transportation, labor, and raw materials have increased causing delays in production and higher prices;

• over the past several years, supply chain disruptions and inflationary pressures related to transportation, labor, and raw materials have increased and at times have caused delays in production and higher prices;

• foreign currency rates in the U.K.

and other European nations have changed significantly relative to the United States Dollar due in part to Brexit in the U.K., as well as other international unrest or uncertainties;

and other European nations have changed significantly relative to the United States Dollar due in part fluctuations in interest rates, economic indicators, political instability, as well as other international unrest or uncertainties;

• ongoing uncertainty and turmoil related to U.S.

and international tariff actions, including potential changes in tariff rates, retaliation by trading partners, and resulting volatility in material costs and supply chain planning;

• commodity prices have fluctuated in recent years, and to the extent we cannot pass this cost to our customers, this impacts the cost of critical materials used in our manufacturing processes such as resin, which affects margins related to our vinyl extrusion products;

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Our strategy to achieve this vision includes the following:

• focus on growth with a purpose and explore markets that are synergistic with existing manufacturing capabilities and expand our market share with our customers and collaborative partnerships by providing:

• focus on profitable growth and explore markets that are synergistic with existing manufacturing capabilities and expand our market share with our customers and collaborative partnerships by providing:

(1) a quality product;

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• offer logistics solutions that provide our customers with just-in-time service which can reduce their processing costs;

• recognize the importance of sustainability by continually looking for ways to reduce our environmental impact and carbon footprint, protect the health and safety of our employees and communities, engage diverse workers and leaders, and remain committed to doing good in our community;

• emphasize sustainability by continually looking for ways to reduce our environmental impact and carbon footprint, protect the health and safety of our employees and communities, engage diverse workers and leaders, and remain committed to doing good in our community;

• pursue targeted business acquisitions that allow us to expand our existing footprint, enhance our existing product offerings, acquire complementary technology, enhance our leadership position within the markets we serve, and expand into adjacent markets or service lines;

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Our products are sold under highly competitive conditions.

We compete with a number of companies, some of which have greater financial resources than us.

We believe the primary competitive factors in the markets we serve include price, product quality, delivery performance, and the ability to manufacture to customer specifications.

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compete against some larger vinyl producers and smaller window manufacturers.

and International fenestration components market is highly fragmented and we compete with a large number of other component suppliers.

For our kitchen and bathroom cabinet door business, we believe we are the largest supplier to OEMs in the U.S., but we compete with other national and regional businesses, including OEMs who are vertically integrated.

and International market is highly fragmented and we compete with a large number of other component suppliers.

For our wood business, we believe we are the largest supplier to OEMs in the U.S., but we compete with other national and regional businesses, including OEMs who are vertically integrated.

We compete against a range of small and mid-size metal, vinyl and wood products suppliers, wood molding companies, and the in-house operations of customers who have vertically integrated fenestration operations.

We also compete against insulating glass (IG) spacer manufacturing firms.

IG systems are used in numerous end markets including residential housing, commercial construction, appliances and transportation vehicles, but we primarily serve the residential housing market.

IG systems are used in numerous end markets including residential housing, commercial construction, appliances and transportation, but we primarily serve the residential housing market.

Competition is largely based on regional presence, custom engineering, product development, quality, service and price.

Primary competitors in the North American Fenestration business include, but are not limited to, Veka, Deceuninck, Energi, Vision Extrusions, GED Integrated Solutions, Technoform, Swiss Spacer, Thermix, RiteScreen, Allmetal, Endura, Klinger, Thermoseal, Fenzi Group, Caldwell, Roto, Hoppe, Ultrafab, Vision Hardware, and Radisson Industries.

Primary competitors in North America include, but are not limited to, Assa Abloy, FlexScreen, Hoppe, Interlock, Radisson Industries, RiteScreen, Roto, Screenco, ScreenFab, and Vision Hardware.

Competitors in the vinyl extrusion business in the U.K.

include Epwin, Veka, Profine U.K.

Extrusions Ltd., Eurocell and others.

Primary competitors in the cabinet door business in the U.S.

include Conestoga, Appalachian Wood, Olon, Northern Contours and others.

include Epwin, Eurocell, Profine U.K.

Extrusions Ltd., Veka, and others.

Primary competitors in the wood business in the U.S.

include Appalachian Wood, Conestoga, Northern Contours, Olon, and others.

Primary competitors in the U.K.

and European hardware and seals businesses include Assa Abloy, Roto, Siegenia, Hoppe, GU, Maco, and Tecseal.

and European hardware and seals businesses include Assa Abloy, GU, Hoppe, Maco, Roto, Siegenia, and Tecseal.

Sales, Marketing, and Distri bution

We sell our products to customers in various countries.

Therefore, we have sales representatives whose territories essentially cover the U.S., Canada, Europe, and to a lesser extent, the Middle East, Latin and South America, Australia, New Zealand and Asia.

We have sales representatives whose territories essentially cover the U.S., Canada, Europe, and to a lesser extent, the Middle East, Latin and South America, Australia, New Zealand and Asia.

Our sales force is tasked with selling and marketing our complete range of components, products and systems to national and regional OEMs through a direct sales force in North America and Europe, supplemented with the use of distributors and independent sales agents.

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Given the short lead times involved in our business, we have a backlog of approximat ely $54.1 million as of October 31, 2025.

The criteria for revenue recognition has not been met with regard to sales backlog, and therefore, we have not recor ded revenue or deferred revenue pursuant to these sales orders.

As the criteria for revenue recognition has not been met with regard to sales backlog, we have not recor ded revenue or deferred revenue pursuant to these sales orders.

If these sales orders result in a sale, we will record revenue in fiscal 2026 in accordance with our revenue recognition accounting policy.

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Our operating income tends to decline during this period of lower sales because a higher percentage of our operating expenses are fixed overhead.

We typically experience more favorable results in the third and fourth quarters of the fiscal year.

Our exposure to seasonality was somewhat tempered with the entry into the kitchen and bathroom cabinet door industry, which is focused "inside the house" and less susceptible to inclement weather.

Our business activity generally increases in the third and fourth quarters of the fiscal year as weather conditions improve, resulting in higher relative volumes compared to the first half of the year.

Expenses for labor and other costs are generally semi-variable throughout the year.

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Human Capital

We track hum an capital metrics that we consider to be key to our business, including employee headcount, temporary workers, health and safety, and turnover.

As of October 31, 2024, we had 7,068 employees located throughout our global organization.

Hum an capital metrics that we consider to be key to our business include employee headcount, temporary workers, health and safety, and turnover.

As of October 31, 2025, we had 7,071 full-time employees located throughout our global organization.

Generally, the total number of employees of Quanex and its subsidiaries does not significantly fluctuate throughout the year.

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

What changed 10-K

Item 1. Business