Quanex Building Products CORP 10-K

Item 8. Financial Statements and Supplementary Data. INDEX TO FINANCIAL STATEMENTS Quanex Building Products Corporation Page Reports of Independent Registered Public Accounting Firm (PCAOB ID 248 ) 38 Management's Annual Report on Internal Control over Financial Reporting 41 Consolidated Financial Statements Consolidated Balance Sheets 42 Consolidated Statements of (Loss) Income 43 Consolidated Statements of Comprehensive (Loss) Income 44 Consolidated Statements of Stockholders’ Equity 45 Consolidated Statements of Cash Flow 46 Notes to Consolidated Financial Statements 47 37 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Quanex Building Products Corporation Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Quanex Building Products Corporation and subsidiaries (the “Company”) as of October 31, 2025 and 2024, the related consolidated statements of (loss) income, comprehensive (loss) income, stockholders' equity, and cash flow for each of the three years in the period ended October 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of October 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated December 12, 2025 expressed an adverse opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Quantitative goodwill impairment assessment of each of the Company’s reporting units As described in Note 1 to the financial statements, the Company performs its annual goodwill impairment test as of August 31, or more frequently if indicators of impairment exist. In the third quarter of 2025 the Company tested goodwill for impairment due to the restructuring of its reportable segments. Also, during the fourth quarter of 2025, the Company tested goodwill for impairment due to the identified triggering event related to the decline in the Company’s stock price. We identified the estimation of the fair value of the reporting units as a critical audit matter. The principal consideration for our determination that the estimation of the fair value of the reporting units is a critical audit matter relates to the use of the income approach which is one method management uses to estimate the fair value of the reporting units. Auditing the fair value of the reporting units involved a high degree of auditor judgment, subjectivity and audit effort in evaluating management’s significant assumptions used in the income approach, including future cash flows related to the reporting units and the weighted average cost of capital (WACC). In addition, the audit effort involved the use of valuation specialists to assist in performing these procedures and evaluating the audit evidence obtained. Our audit procedures related to the estimation of the fair value of the reporting units included the following, among others. • We tested the effectiveness of controls over goodwill impairment including those over the determination of fair value, including controls relating to management’s development of forecasts of future revenues, earnings, cash flows and WACC. 38 Table of Contents • We evaluated the reasonableness of management’s forecasts of revenues, earnings and cash flows by comparing the forecasts to historical revenues, earnings and cash flows, current budgets, our understanding of the current business strategy, communications to the Board of Directors, press releases and industry reports. • We utilized our valuation specialists to evaluate the reasonableness of the WACC used by management, including the testing of underlying source information and developing a range of independent estimates and comparing those to the rate selected by management. /s/ GRANT THORNTON LLP We have served as the Company's auditor since 2014. Houston, Texas December 12, 2025 39 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Quanex Building Products Corporation Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Quanex Building Products Corporation and subsidiaries (the “Company”) as of October 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, because of the effect of the material weakness described in the following paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of October 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness have been identified and included in management’s assessment. Management identified a material weakness in internal controls related to the design and operation of controls over the Company’s preparation and review of the statement of cash flows. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended October 31, 2025, and our report dated December 12, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP Houston, Texas December 12, 2025 40 Table of Contents MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of the Company, including the Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control system was designed to provide reasonable assurance to management and the Company’s Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. A system of internal control may become inadequate over time because of changes in conditions, or deterioration in the degree of compliance with the policies or procedures. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of the Company’s internal control over financial reporting as of October 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on this assessment, management identified a material weakness in the Company’s internal control over financial reporting related to the design and operation of controls over the Company’s preparation and review of the statement of cash flows. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. As a result of the identified material weakness, management has concluded that the Company’s internal control over financial reporting was not effective as of October 31, 2025. We are actively implementing remedial measures to address the identified material weakness. We expect the remediation of this material weakness to be completed prior to the end of fiscal year 2026. Grant Thornton LLP , the Company’s independent registered public accounting firm, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting. 41 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONSOLIDATED BALANCE SHEETS As of October 31, 2025 and 2024 October 31, 2025 2024 (In thousands, except share amounts) ASSETS Current assets: Cash and cash equivalents $ 76,018 $ 97,744 Restricted cash 2,100 5,251 Accounts receivable, net of allowance for credit losses of $ 2,039 and $ 254 205,384 197,689 Inventories 254,122 275,550 Income tax receivable — 5,937 Prepaid assets 32,387 23,419 Other current assets 3,764 5,678 Total current assets 573,775 611,268 Property, plant and equipment, net of accumulated depreciation of $ 414,809 and $ 391,851 411,591 402,466 Operating lease right-of-use assets 154,866 126,715 Deferred income tax assets 2,706 3,845 Goodwill 271,346 574,711 Intangible assets, net 549,137 597,909 Other assets 4,812 2,874 Total assets $ 1,968,233 $ 2,319,788 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 131,307 $ 124,404 Accrued liabilities 95,155 103,623 Income taxes payable 12,076 6,620 Current maturities of long-term debt 27,561 25,745 Current operating lease liabilities 15,446 12,475 Total current liabilities 281,545 272,867 Long-term debt 665,268 737,198 Non-current operating lease liabilities 145,459 117,560 Deferred income taxes 135,993 162,304 Other liabilities 13,789 19,113 Total liabilities 1,242,054 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 value, shares authorized 125,000,000 issued 51,211,469 and 51,266,501 respectively; outstanding 45,674,726 and 47,252,070 , respectively 512 513 Additional paid-in-capital 700,029 701,008 Retained earnings 164,710 430,405 Accumulated other comprehensive loss ( 35,439 ) ( 46,428 ) Less: Treasury stock at cost, 5,536,743 and 4,014,431 shares, respectively ( 103,633 ) ( 74,752 ) Total stockholders’ equity 726,179 1,010,746 Total liabilities and stockholders' equity $ 1,968,233 $ 2,319,788 See notes to consolidated financial statements. 42 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF (LOSS) INCOME For the Years Ended October 31, 2025, 2024 and 2023 Year Ended October 31, 2025 2024 2023 (In thousands, except per share amounts) Net sales $ 1,837,641 $ 1,277,862 $ 1,130,583 Cost and expenses: Cost of sales (excluding depreciation and amortization) 1,338,413 972,238 853,059 Selling, general and administrative 277,261 190,470 123,957 Restructuring charges 10,191 — — Depreciation and amortization 103,444 60,328 42,866 Goodwill impairment charges 302,284 — — Operating (loss) income ( 193,952 ) 54,826 110,701 Non-operating (expense) income: Interest expense ( 55,812 ) ( 20,593 ) ( 8,136 ) Other, net 7,171 7,849 ( 5,519 ) (Loss) income before income taxes ( 242,593 ) 42,082 97,046 Income tax expense ( 8,213 ) ( 9,023 ) ( 14,545 ) Net (loss) income $ ( 250,806 ) $ 33,059 $ 82,501 Basic (loss) earnings per common share $ ( 5.43 ) $ 0.91 $ 2.51 Diluted (loss) earnings per common share $ ( 5.43 ) $ 0.90 $ 2.50 Weighted-average common shares outstanding: Basic 46,170 36,416 32,819 Diluted 46,170 36,648 33,026 Cash dividends per share $ 0.32 $ 0.32 $ 0.32 See notes to consolidated financial statements. 43 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME For the Years Ended October 31, 2025, 2024 and 2023 Year Ended October 31, 2025 2024 2023 (In thousands) Net (loss) income $ ( 250,806 ) $ 33,059 $ 82,501 Other comprehensive income (loss): Foreign currency translation adjustments gain (loss), net of tax 10,989 ( 8,287 ) 8,542 Change in pension from net unamortized gain (pretax) — — 3,558 Change in pension from net unamortized gain tax expense — — ( 819 ) Total other comprehensive income (loss), net of tax 10,989 ( 8,287 ) 11,281 Comprehensive (loss) income $ ( 239,817 ) $ 24,772 $ 93,782 See notes to consolidated financial statements. 44 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY For the Years Ended October 31, 2025, 2024 and 2023 Common Stock Accumulated Treasury Stock Total Shares Amount Additional Paid-in Capital Retained Earnings Other Comprehensive Loss Shares Amount Stockholders’ Equity (In thousands, except share amounts) Balance at October 31, 2022 37,211,056 $ 372 $ 251,947 $ 337,456 $ ( 49,422 ) ( 4,081,806 ) $ ( 75,518 ) $ 464,835 Net income — — — 82,501 — — — 82,501 Foreign currency translation adjustments — — — — 8,542 — — 8,542 Change in pension from net unamortized gain (net of tax benefit of $ 819 ) — — — — 2,739 — — 2,739 Common dividends ($ 0.32 per share) — — — ( 10,639 ) — — — ( 10,639 ) Treasury shares purchased, at cost — — — — — ( 275,000 ) ( 5,593 ) ( 5,593 ) Expense related to stock-based compensation — — 2,521 — — — — 2,521 Stock options exercised — — 32 — — 63,587 1,183 1,215 Restricted stock awards granted — — ( 1,752 ) — — 94,700 1,752 — Performance restricted stock unit awards vested — — ( 605 ) — — 32,680 605 — Other ( 34,098 ) — ( 567 ) — — — — ( 567 ) Balance at October 31, 2023 37,176,958 $ 372 $ 251,576 $ 409,318 $ ( 38,141 ) ( 4,165,839 ) $ ( 77,571 ) $ 545,554 Net income — — — 33,059 — — — 33,059 Foreign currency translation adjustments — — — — ( 8,287 ) — — ( 8,287 ) Common dividends ($ 0.32 per share) — — — ( 11,972 ) — — — ( 11,972 ) Issuance of common stock, acquisition 14,139,477 142 449,918 — — — — 450,060 Expense related to stock-based compensation — — 2,952 — — — — 2,952 Stock options exercised — — 28 — — 29,280 545 573 Restricted stock awards granted — — ( 1,357 ) — — 72,900 1,357 — Performance restricted stock unit awards vested — — ( 917 ) — — 49,228 917 — Other ( 49,934 ) ( 1 ) ( 1,192 ) — — — — ( 1,193 ) Balance at October 31, 2024 51,266,501 $ 513 $ 701,008 $ 430,405 $ ( 46,428 ) ( 4,014,431 ) $ ( 74,752 ) $ 1,010,746 Net loss — — — ( 250,806 ) — — — ( 250,806 ) Foreign currency translation adjustments — — — — 10,989 — — 10,989 Common dividends ($ 0.32 per share) — — — ( 14,889 ) — — — ( 14,889 ) Treasury shares purchased, at cost — — — — — ( 1,709,119 ) ( 32,360 ) ( 32,360 ) Expense related to stock-based compensation — — 3,685 — — — 3,685 Stock options exercised — — 41 — — 9,300 173 214 Restricted stock awards granted — — ( 2,006 ) — — 107,682 2,006 — Performance restricted stock unit awards vested — — ( 1,300 ) — — 69,825 1,300 — Other ( 55,032 ) ( 1 ) ( 1,399 ) — — — — ( 1,400 ) Balance at October 31, 2025 51,211,469 $ 512 $ 700,029 $ 164,710 $ ( 35,439 ) ( 5,536,743 ) $ ( 103,633 ) $ 726,179 See notes to consolidated financial statements. 45 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOW For the Years Ended October 31, 2025, 2024 and 2023 Year Ended October 31, 2025 2024 2023 (In thousands) Operating activities: Net (loss) income $ ( 250,806 ) $ 33,059 $ 82,501 Adjustments to reconcile net (loss) income to cash provided by operating activities: Depreciation and amortization 103,444 60,328 42,866 Loss (gain) on disposition of capital assets 613 ( 5,218 ) 278 Stock-based compensation 3,685 2,952 2,521 Deferred income tax ( 18,535 ) ( 15,336 ) 5,147 Charge for deferred loan costs and debt discount — 3,469 — Goodwill impairment charges 302,284 — — Gain on deal contingent foreign exchange forward currency contract — ( 6,512 ) — Noncash restructuring charges 4,561 — — Other, net 7,114 4,495 1,529 Changes in assets and liabilities: (Increase) decrease in accounts receivable ( 6,878 ) 973 6,969 Decrease in inventory 23,553 33,484 30,024 (Increase) decrease in other current assets ( 3,653 ) 4,297 ( 1,880 ) Increase (decrease) in accounts payable 3,313 ( 35,824 ) ( 11,611 ) (Decrease) increase in accrued liabilities ( 9,657 ) 6,250 ( 4,249 ) Increase (decrease) in current income taxes payable 11,108 9,139 ( 9,009 ) (Decrease) increase in other long-term liabilities ( 4,693 ) ( 7,155 ) 683 Other, net ( 556 ) 411 1,283 Cash provided by operating activities 164,897 88,812 147,052 Investing activities: Acquisitions, net of cash acquired — ( 398,554 ) ( 91,302 ) Capital expenditures ( 62,642 ) ( 37,086 ) ( 37,390 ) Proceeds from disposition of capital assets 634 15,046 253 Cash used for investing activities ( 62,008 ) ( 420,594 ) ( 128,439 ) Financing activities: Borrowings under credit facility 190,000 785,000 102,000 Repayments of credit facility borrowings ( 265,000 ) ( 83,750 ) ( 100,000 ) Debt issuance costs — ( 13,808 ) — Repayments of other long-term debt ( 4,045 ) ( 296,206 ) ( 2,567 ) Common stock dividends paid ( 14,889 ) ( 11,972 ) ( 10,639 ) Issuance of common stock 214 573 1,215 Proceeds from deal contingent foreign exchange forward currency contract — 6,512 — Payroll tax paid to settle shares forfeited upon vesting of stock ( 1,400 ) ( 1,193 ) ( 567 ) Purchase of treasury stock ( 32,360 ) — ( 5,593 ) Cash (used for) provided by financing activities ( 127,480 ) 385,156 ( 16,151 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 286 ) ( 8,853 ) 919 (Decrease) increase in cash, cash equivalents and restricted cash ( 24,877 ) 44,521 3,381 Cash, cash equivalents and restricted cash at beginning of period 102,995 58,474 55,093 Cash, cash equivalents and restricted cash at end of period $ 78,118 $ 102,995 $ 58,474 See notes to consolidated financial statements. 46 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations, Basis of Presentation and Significant Accounting Policies Nature of Operations Quanex Building Products Corporation is a leading manufacturer and component supplier to original equipment manufacturers (OEMs) in the building products industry, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets. We have organized our business into three reportable business segments: (1) Hardware Solutions, (2) Extruded Solutions, and (3) Custom Solutions. For additional discussion of our reportable business segments, see Note 17, “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 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 Our consolidated financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). We consolidate our wholly-owned subsidiaries and eliminate intercompany sales and transactions. We have no cost or equity investments in companies that are not wholl y-owned. Certain reclassifications were made to prior period balances for current period presentation. In our opinion, these au dited financial statements contain all adjustments necessary to fairly present our financial position, results of operations and cash flows for the periods presented. 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 ongoing basis, including those related to impairment of long lived assets and goodwill, pension and retirement liabilities, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates. A summary of our significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: 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 reasonably assured. 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. 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 acc ount 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 as our contract terms are less than one year. 47 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Pricing and sales i ncentives 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 cost s 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 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 years ended October 31, 2025, 2024, and 2023 into groupings by segment which we believe depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. For further details regarding our results by segment, refer to Note 17, “Segment Information.” 48 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Year Ended October 31, 2025 2024 2023 (in thousands) Hardware Solutions: Window and door hardware $ 552,825 $ 146,187 $ — Screens 280,814 279,804 296,959 Other 8,035 1,848 — $ 841,674 $ 427,839 $ 296,959 Extruded Solutions: Window profiles $ 278,399 $ 255,816 $ 284,119 Seals and gaskets 80,916 21,321 — Spacers 199,217 198,475 191,212 Solar 24,080 25,672 21,061 Flashing tape 9,825 18,263 16,271 Window and door hardware 39,726 11,177 — Other 14,464 29,271 31,922 $ 646,627 $ 559,995 $ 544,585 Custom Solutions: Wood solutions $ 200,104 $ 198,424 $ 215,445 Access solutions 101,904 25,792 — Mixing solutions 86,202 85,225 82,916 $ 388,210 $ 309,441 $ 298,361 Unallocated Corporate & Other: Eliminations $ ( 38,870 ) $ ( 19,413 ) $ ( 9,322 ) $ ( 38,870 ) $ ( 19,413 ) $ ( 9,322 ) Net sales $ 1,837,641 $ 1,277,862 $ 1,130,583 Cash, Cash Equivalents and Restricted Cash Cash equivalents include all highly liquid investments with an original maturity of three months or less. Such securities with an original maturity which exceeds three months are deemed to be short-term investments. Restricted cash is cash held in a foreign subsidiary that is not available for use as a result of exchange control restrictions. We maintain cash, cash equivalents and restricted cash at several financial institutions, which at times may not be federally insured or may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risks on such accounts. Concentration of Credit Risk and Allowance for Credit Losses Certain of our businesses or product lines are largely dependent on a relatively few large customers. Although we believe we have an extensive customer base, the loss of one of these large customers or if such customers were to incur a prolonged period of decline in business, our financial condition and results of operations could be adversely affected. For the years ended October 31, 2025, 2024 and 2023, one customer provided more than 10 % of our consolidated net sales and accounts receivable. We have establishe d an allowance for credit losses to estimate the risk of loss associated with our accounts receivable balances. Our policy for determining the allowance is based on factors that affect collectability, including: (a) historical trends of write-offs, recoveries and credit losses; (b) the credit quality of our customers; and (c) projected economic and market conditions. We believe our allowance is adequate to absorb any known or probable lo sses as of October 31, 2025. Different assumptions or changes in economic circumstances could result in changes to the allowance. 49 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Business Combinations We apply the acquisition method of accounting for business combinations, which requires us to make use of estimates and judgments to allocate the purchase price paid for acquisitions to the fair value of the assets and liabilities acquired. We account for contingent assets and liabilities at fair value on the acquisition date, and record changes to fair value associated with these asse ts and liabilities as a period cost as incurred. We use established valuation techniques and engage reputable valuation specialists to assist us with these valuations. However, there is a risk that we may not identify all pre-acquisition contingencies or that our estimates may not reflect the actual results when realized. We use a reasonable measurement period to record any adjustment related to the opening balance sheet (generally, less than one year). After the measurement period, changes to the opening balance sheet can result in the recognition of income or expense as period costs. To the extent these items stem from contingencies that existed at the balance sheet date, but are contingent upon the realization of future events, the cost is charged to expense at the time the future event becomes known. Inventory We record inventory at the lower of cost or net realizable value. Inventories are valued using the first-in first-out (FIFO) method. Fixed costs related to excess manufacturing capacity are evaluated and expensed in the period, to ensure that inventory is properly capitalized. Inventory quantities are regularly reviewed and write-downs for excess or obsolete inventory are recorded primarily based on our forecast of future demand and our estimates regarding current and future market conditions. Significant unanticipated variances to our forecasts could require a change in the provision for excess or obsolete inventory, resulting in a charge to net income during the period of the change. Long-Lived Assets Property, Plant and Equipment and Intangible Assets with Defined Lives We make judgments and estimates related to the carrying value of property, plant and equipment, intangible assets with defined lives, and long-lived assets, which include determining when to capitalize costs, the depreciation and amortization methods to use and the useful lives of these assets. We evaluate these assets for impairment when there are indicators that the carrying values of these assets might not be recoverable. Such indicators of impairment may include changes in technology, significant market fluctuations, historical losses or loss of a significant customer, or other changes in circumstance that could affect the assets’ ability to generate future cash flows. When we evaluate these assets for impairment, we compare the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. If the carrying value exceeds the sum of the undiscounted cash flows, and there is no alternative use for the asset, we determine that the asset is impaired. To measure the impairment charge, we compare the carrying amount of the long-lived asset to its fair value, as determined by quoted market prices in active markets, if available, or by discounting the projected future cash flows. This calculation of fair value requires us to develop and employ long-term forecas ts of future operating results related to these assets. These forecasts are based on assumptions about demand for our products and future market condit ions. Future events and unanticipated changes to these assumptions could require a provision for impairment, resulting in a charge to net income during the period of the change. We monitor relevant circumstances, including industry trends, general economic conditions, and the potential impact that such circumstances might have on the valuation of our identifiable intangible assets with finite lives. Events and changes in circumstance that may cause a triggering event and necessitate such a review include, but are not limited to: a decrease in sales for certain customers, improvements or changes in technology, and/or a decision to discontinue the use of a trademark or trade name, or to allow a patent to lapse. Such events could negatively impact the fair value of our identifiable intangible assets. In such circumstances, we may evaluate the underlying assumptions and estimates made by us in order to assess the appropriate valuation of these identifiable intangible assets and compare to the carrying value of the assets. We may be required to write down these identifiable intangible assets and record a non-cash impairment charge. When we originally value our intangible assets, we use a variety of techniques to establish the carrying value of the assets, including the relief from royalty method, excess current year earnings method and income method. 50 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) As discussed in the “Restructuring” section of our “Nature of Operations and Basis of Presentation and Significant Accounting Policies” in Note 1, we restructured our reportable segments during the third quarter of 2025, which triggered the requirement to assess our goodwill for potential impairment. In addition, during the fourth quarter of 2025, we noted a sustained decline in our stock price, which represented an additional triggering indicator of impairment. We did not record any impairment charges related to property, plant and equipment or intangible assets with defined lives as a result of either impairment analyses. There were no other indicators of triggering events noted for any period in the years ended October 31, 2025, 2024 and 2023. Therefore, we did not record an impairment charge related to property, plant and equipment or intangible assets with defined lives during the years ended October 31, 2025, 2024 and 2023. Software development costs, including costs incurred to purchase third-party software, are capitalized when we have determined that the technology is capable of meeting our performance requirements, and we have authorized funding for the project. We cease capitalization of software costs when the software is substantially complete and is ready for its intended use. The software is then amortized over its estimated useful life. When events or circumstances indicate the carrying value of internal use software might not be recoverable, we assess the recoverability of these assets by comparing the carrying value of the asset to the undiscounted future cash flows expected to be generated from the asset’s use, consistent with the methodology to test other property, plant and equipment for impairment. Property, plant and equipment is stated at cost and is depreciated using the straight-line method over the estimated useful lives of the assets. We capitalize betterments which extend the useful lives or significantly improve the operational efficiency of assets. We expense repair and maintenance costs as incurred. The estimated useful lives of our primary asset categories at October 31, 2025 were as follows: Useful Life (in Years) Land improvements 7 to 25 Buildings 25 to 40 Building improvements 5 to 20 Machinery and equipment 2 to 15 Leasehold improvements are depreciated over the shorter of their estimated useful lives or the term of the lease. Goodwill We use the acquisition method to account for business combinations and, to the extent that the purchase price exceeds the fair value of the net assets acquired, we record goodwill. In accordance with U.S. GAAP, we are required to evaluate our goodwill at least annually. We perform our annual goodwill assessment as of August 31, or more frequently if indicators of impairment exist. Qualitative factors that indicate impairment could include, but are not limited to, (i) macroeconomic conditions, (ii) industry and market considerations, (iii) cost factors, (iv) overall financial performance of the reporting unit, and (v) other relevant entity-specific events. The first step in our annual goodwill assessment is to perform the optional qualitative assessment allowed by ASC Topic 350 “Intangibles - Goodwill and Other” (ASC 350). In our qualitative assessment, we evaluate relevant events or circumstances to determine whether it is more likely than not (i.e., greater than 50%) that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, ASC 350 requires us to compare the fair value of such reporting unit to its carrying value including goodwill. To determine the fair value of our reporting units, we use multiple valuation techniques including a discounted cash flow analysis, using the applicable weighted average cost of capital, in combination with a market approach that uses market multiples and a selection of guideline public companies. This test requires us to make assumptions about the future growth of our business and the market in general, as well as other variables such as the level of investment in capital expenditure, growth in working capital requirements and the terminal or residual value of our reporting units beyond the periods of estimated annual cash flows. We use a third-party valuation firm to assist us with this analysis. If the fair value of each reporting unit exceeds its carrying value, no action is required. Otherwise, an impairment loss is recorded to the extent that the carrying amount of the reporting unit including goodwill exceeds the fair value of that reporting unit. We believe the estimates and assumptions used in our impairment assessment are reasonable based on available market information, but variations in any of the assumptions could result in materially different calculations of fair value and determinations of whether or not an impairment is indicated during current or future periods. 51 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In the third quarter of 2025, we tested goodwill for impairment as a result of the restructuring of our reportable segments. The testing of our goodwill resulted in an goodwill impairment of $ 302.3 million . Of the goodwill impairment amount recorded during the nine 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. At our annual testing date, August 31, 2025, we had seven reporting units with goodwill balances: two reporting units included in our Hardware Solutions operating segment, three reporting units included in our Extruded Solutions operating segment, and two reporting units included in our Custom Solutions operating segment. We performed a qualitative assessment of the reporting units in all three reportable segments. This review included an analysis of historical goodwill test results, operating results relative to forecast, projected results over the next five years, and other measures and concluded that there were no indicators of potential impairment associated with these reporting units. During the fourth quarter of 2025, after reviewing general potential indicators of impairment and noting a triggering event related to the decline in stock price, we performed an interim impairment assessment as of September 30, 2025. Based on the results of this analysis, no additional goodwill impairment was identified. For additional discussion of the restructuring, see Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies - Restructuring.” For additional discussion of our goodwill, see Note 7, “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 17, “Segment Information.” Restructuring We accrue one-time severance costs pursuant to an approved plan of restructuring at the communication date, when affected employees have been notified of the potential severance and sufficient information has been provided for the employee to calculate severance benefits, in the event the employee is involuntarily terminated. 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 twelve months ended October 31, 2025, we restructured our reportable segments to integrate the acquisition of Tyman plc with our legacy Quanex operations. This restructuring aligns our business into three reportable 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 17, “Segment Information.” During the twelve months ended October 31, 2025 , we incurred $ 10.2 million in restructuring charges including $ 6.3 million related to workforce alignment costs, primarily severance and employee-related expenses. As of October 31, 2025, we have paid $ 5.6 million in workforce alignment costs, with a remaining accrual of $ 0.7 million. Additionally, we recognized $ 3.9 million related to the disposal of software which no longer supports our business as restr uctured. 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. Insurance We manage our exposure to losses for workers’ compensation, group medical, property, casualty and other insurance claims through a combination of self-insurance retentions and insurance coverage with third-party carriers. We record undiscounted liabilities associated with our portion of these exposures, which we estimate by considering various factors such as our historical claims experience, severity factors and estimated claims incurred but not reported, for which we have developed loss development factors, which are estimates as to how claims will develop over time until closed. While we consider a number of factors in preparing the estimates, sensitive assumptions using significant judgment are made in determining the amounts that are accrued in the financial statements. Actual claims could differ significantly from these estimated liabilities, depending on future claims experience. We do not record insurance recoveries until any contingencies relating to the claim have been resolved. 52 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Retirement Plans We historically sponsored a defined benefit pension plan. To measure our liabilities associated with these plans, we made assumptions related to future events, including expected return on plan assets, and rate of compensation increases. The discount rate reflected the rate at which benefits could be effectively settled on the measurement date. We determined our discount rate using a FTSE Above Median pension discount curve whereby target yields were developed from bonds across a range of maturity points, and a curve was fitted to those targets. Spot rates (zero coupon bond yields) were developed from the curve and used to discount benefit payments associated with each future year. During the year ended October 31, 2023, the defined benefit pension plan was terminated and the pension obligation was settled. Warranty Obligations We accrue warranty obligations when we recognize revenue for certain products. Our provision for warranty obligations is based on historical costs incurred for such obligations and is adjusted, where appropriate, based on current conditions and factors. Our ability to estimate our warranty obligations is subject to significant uncertainties, including changes in product design and our overall product sales mix. Income Taxes We record the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and the amounts reported in our consolidated balance sheets, as well as net operating losses and tax credit carry forwards. We evaluate the carrying value of the net deferred tax assets and determine whether we will be able to generate sufficient future taxable income to realize our deferred tax assets. We perform this review for recoverability on a jurisdictional basis, whereby we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence can be objectively verified. Cumulative losses in recent years is a significant piece of negative evidence that is difficult to overcome in determining that a valuation allowance is not needed against deferred tax assets. Thus, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. We believe we will fully realize our deferred tax assets, net of a recorded valuation allowance. We project future taxable income using the same forecasts used to test long-lived assets and intangibles for impairment, scheduling out the future reversal of existing taxable temporary differences and reviewing our most recent financial operations. In the event the estimates and assumptions indicate we will not generate sufficient future taxable income to realize our deferred tax assets, we record a valuation allowance against a portion of our deferred tax assets. The deferred tax assets, net of valuation allowance, offset the deferred liability within a jurisdiction. The Company has elected to account for the tax effects of Global Intangible Low-Taxed Income (GILTI) as a current-period expense in the period the tax is incurred and, accordingly, does not recognize deferred tax assets or liabilities related to GILTI. We evaluate our ongoing tax positions to determine if it is more-likely-than-not we will be successful in defending such positions if challenged by taxing authorities. To the extent that our tax positions do not meet the more-likely-than-not criteria, we record a liability for uncertain tax positions. As of October 31, 2025, we accrued $ 0.7 million of unrecognized tax benefits primarily related to transfer pricing matters. Derivative Instruments We have historically used financial and commodity-based derivative contracts to manage our exposure to fluctuations in foreign currency exchange rates and raw material prices. All derivatives are measured at fair value on a recurring basis. We have not designated the derivative instruments we use as cash flow hedges under ASC Topic 815 “Derivatives and Hedging” (ASC 815). Therefore, all gains and losses, both realized and unrealized, are recognized in the consolidated statements of income (loss) in the period of the change as the underlying assets and liabilities are marked-to-market. We do not enter into derivative instruments for speculative or trading purposes. As such, these instruments are considered economic hedges, and are reflected in the operating activities section of the consolidated statements of cash flow. 53 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Foreign Currency Translation Our consolidated financial statements are presented in our reporting currency, the United States Dollar. Our foreign operations are measured using the local currency as the functional currency. The assets and liabilities of our foreign operations which are denominated in other currencies are translated to United States Dollars using the prevailing exchange rates as of the balance sheet date. Revenues and expenses are translated at the average exchange rates for the applicable period. The resulting translation adjustments are recorded as a component of accumulated other comprehensive loss on the consolidated balance sheets. We enter into transactions throughout our locations that are denominated in currencies other than the applicable functional currency where they originated. At each balance sheet date, we translate these asset or liability accounts to our functional currency and record unrealized transaction gains or losses. When these assets or liabilities settle, we record realized transaction gains or losses. These realized and unrealized gains or losses are included in the accompanying consolidated statements of (loss) income under the caption, “Other, net.” Stock–Based Compensation We have issued stock-based compensation in the form of stock options to directors, employees and officers, and non-vested restricted stock awards to certain key employees and officers. We apply the provisions of ASC Topic 718 “Compensation - Stock Compensation” (ASC 718), to determine the fair value of stock option awards on the date of grant using the Black-Scholes valuation model. We recognize the fair value as compensation expense on a straight-line basis over the requisite service period of the award based on awards ultimately expected to vest. Stock options granted to directors vest immediately while the stock options granted to our employees and officers typically vest ratably over a three-year period with service and continued employment as the vesting conditions. For new option grants to retirement-eligible employees, we recognize expense and vest immediately upon grant, consistent with the retirement vesting acceleration provisions of these grants. For employees near retirement age, we amortize such grants over the period from the grant date to the retirement-eligibility date if such period is shorter than the standard vesting schedule. For grants of non-vested restricted stock, we calculate the compensation expense at the grant date as the number of shares granted multiplied by the closing stock price of our common stock on the date of grant. This expense is recognized ratably over the vesting period. Our non-vested restricted stock grants to officers and employees typically cliff vest over a three-year period or a three-year grated vesting schedule with service and continued employment as the only vesting criteria. Our fair value determination of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behavior over the expected term, our dividend rate, risk-free rate and expectation with regards to forfeitures. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, the valuation models may not provide an accurate measure of the fair value of our employee stock options. Accordingly, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. We have granted other awards which are linked to the performance of our common stock, but will settle in cash rather than the issuance of shares of our common stock. The value of these awards fluctuates with changes in our stock price, with the resulting gains or losses reflected in the period of the change. We have recorded current and non-current liabilities related to these awards reflected in the accompanying consolidated balance sheets at October 31, 2025 and 2024. See Note 14, “Stock-based Compensation.” In addition, we have granted performance share awards which use return on net assets as the vesting condition and the awards settle in cash. We use a Monte Carlo simulation model to value the market condition and our stock price on the date of grant to value the internal performance condition and recognize expense ratably over the vesting period of three years . We esti mate that the performance measures will be met and shares will vest at target until the year of settlement (third year of cliff vesting). As of October 31, 2025, we have deemed none of the p erformance share awards related to the December 2022 grants are probable to vest. Beginning with the December 2024 and March 2025 grant cycles, certain performance share awards include adjusted earnings per share as the primary vesting condition and apply return on net assets (“RONA”) as a performance modifier. These awards also settle in cash. The fair value of these awards is measured at grant and remeasured each reporting period based on changes in our stock price and the number of units expected to vest. Compensation cost is recognized over the three-year requisite service period and adjusted for changes in estimated performance outcomes, including the impact of the RONA modifier. 54 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) We have also granted performance restricted stock units which settle in shares upon vesting. These awards cliff vest upon a three-year service period with the absolute performance of our common stock as the vesting criteria. The number of performance restricted stock units 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 use 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. Similar to performance shares, the performance restricted stock units are not considered outstanding shares, do not have voting rights, and are excluded 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 October 31, 2025, we have deemed none of the shares related to the December 2022 grants of performance restricted stock units are probable to vest. Treasury Stock We use the cost method to record treasury stock purchases whereby the entire cost of the acquired shares of our common stock is recorded as treasury stock (at cost). When we subsequently reissue these shares, proceeds in excess of cost upon the issuance of treasury shares are credited to additional paid-in-capital, while any deficiency is charged to retained earnings. Earnings per Share Data We calculate basic earnings per share based on the weighted average number of our common shares outstanding for the applicable period. We calculate diluted earnings per share based on the weighted average number of our common shares outstanding for the period plus all potentially dilutive securities using the treasury stock method, whereby we assume that all such shares are converted into common shares at the beginning of the period, if deemed to be dilutive. If we incur a loss from continuing operations, the effects of potentially dilutive common stock equivalents (stock options and unvested restricted stock awards) are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. Performance shares and performance restricted stock units are excluded from contingent shares for purposes of calculating diluted weighted average shares until the performance measure criteria is probable and shares are likely to be issued. Supplemental Cash Flow Information The following table summarizes our supplemental cash flow information for the years ended October 31, 2025, 2024 and 2023 (in thousands): Year Ended October 31, 2025 2024 2023 Cash paid for interest $ 52,630 $ 10,910 $ 5,737 Cash paid for income taxes 23,533 18,291 22,224 Cash received from income tax refunds 6,695 3,502 2,460 Noncash investing and financing activities: Increase (decrease) in capitalized expenditures in accounts payable $ 1,127 $ ( 2,229 ) $ 1,953 Issuance of common stock for acquisition — 450,060 — Related Party Transactions N et sales for the year ended October 31, 2025, 2024, and 2023 included approxim ately $ 2.0 million , $ 1.2 million and $ 1.2 million of transactions with customers which are related parties with two of our non-employee directors. Purchases for the year ended October 31, 2025, 2024, and 2023 included approxim ately $ 0.1 million , $ 0.2 million and zero of transactions with a customer which is a related party with one of our non-employee directors. 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 in fair transactions. 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. Subsequent Events We have evaluated events occurring after the balance sheet date for possible disclosure as a subsequent event through the date the consolidated financial statements were is sued. 55 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 2. Acquisitions Tyman Acquisition On August 1, 2024, we completed the acquisition of Tyman plc (the “Tyman Acquisition”), a company incorporated in England and Wales (“Tyman”). The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised 14,139,477 newly issued Quanex common shares (“New Quanex Shares”) and cash consideration of approximately $ 504.1 million (being the Pound Sterling amount of cash consideration of £ 392.2 million in respect of all of the Tyman Shares converted to U.S. Dollars at an exchange rate of 1.2855 ). New Quanex Shares issued in connection with the Tyman Acquisition on the New York Stock Exchange took effect on August 2, 2024 and Tyman’s shares on the London Stock Exchange were canceled. On June 12, 2024, in connection with the Tyman Acquisition, the Company, Wells Fargo Bank, National Association (“Wells Fargo Bank”, acting as agent, swingline lender and issuing lender, the “Agent”), the other entities therein specified in the capacities therein specified, and the lenders parties thereto, entered into an amendment to the Second Amended and Restated Credit Agreement, dated as of July 6, 2022 (the “Existing Credit Agreement”, and the Existing Credit Agreement as so amended, the “Amended Credit Agreement”). The Amended Credit Agreement did not become effective until August 1, 2024 upon the completion of the Tyman Acquisition. The Amended Credit Agreement (i) increased the senior secured revolving credit facility to an aggregate principal amount of $ 475 million (the “Revolving Credit Facility”) and (ii) provided for a senior secured term loan A facility in an aggregate principal amount of $ 500 million (the “Term Loan A Facility” and together with the Revolving Credit Facility, the “Facilities”). The Revolving Credit Facility includes alternative currency, letter of credit, and swing-line sub-facilities of $ 100 million, $ 30 million, and $ 15 million, respectively. The maturity date of the Facilities will be 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. 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. 56 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 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 17 , “Segment Information.” During the fourth quarter of 2025, the Company recorded a $ 9.0 million discrete income tax charge related to post measurement period corrections to the deferred tax assets and liabilities established in the acquisition of Tyman. This amount has been recognized through current-period income tax expense. The discrete income tax charge is reflected in the line item “Income tax expense” in the Consolidated Statements of (Loss) Income for the year ended October 31, 2025, and is separately disclosed in the Company’s effective tax rate reconciliation. For additional discussion, see Note 11, “Income Taxes”. LMI Acquisition On November 1, 2022, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with LMI Custom Mixing, LLC (“LMI”) and the equity owners of LMI, Lauren International, Ltd. and Meteor-US-Beteiligungs GMBH. Under the Purchase Agreement, we acquired substantially all of the operating assets comprising LMI’s polymer mixing and rubber compound production business (collectively, the “Purchased Assets”) and also agreed to assume certain liabilities relating to the Purchased Assets (collectively, the “LMI Acquisition”). As consideration for the Purchased Assets, we paid $91.3 million in cash utilizing funds borrowed under our Credit Facility. Subsequent to the LMI Acquisition, we had approximately $ 215 million available for use under the Credit Facility. For the twelve months ended October 31, 2023, our consolidated operating results included net sales of $ 75.6 million and operating income of $ 8.3 million associated with LMI. In connection with the LMI Acquisition, we amended our existing finance lease with Lauren Real Estate Hol ding LLC for the purpose of adding an additional lease renewal option and increasing rental space by approximately 60,000 square feet of rental space which was added to the 313,595 square feet of rentable area located in Cambridge, Ohio. 57 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The purchase price has been allocated to the fair value of the assets acquired and liabilities assumed, as indicated in the table below. As of Date of Opening Balance Sheet (In thousands) Net assets acquired: Accounts receivable $ 7,012 Inventories 5,684 Other assets 790 Property, plant and equipment 35,887 Goodwill 41,393 Intangible assets 19,500 Accounts payable ( 4,736 ) Accrued liabilities ( 507 ) Long-term debt (finance leases) ( 13,721 ) Net assets acquired $ 91,302 Consideration: Cash, net of cash and cash equivalents acquired $ 91,302 We used recognized valuation techniques to determine the fair value of the assets and liabilities, including the 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. The goodwill balance is deductible for tax purposes. LMI is allocated entirely to our Custom Solutions reportable segment. Pro Forma Results We calculated the pro forma impact of the Tyman acquisition and the associated debt financing on our operating results for the twelve months ended October 31, 2024, and 2023. The following pro forma results give effect to these acquisitions, assuming the transaction occurred on November 1, 2023. Year ended October 31, 2024 2023 (In thousands, except per share amounts) (Unaudited) Net sales $ 1,886,834 $ 1,954,950 Net income $ 66,037 $ 48,458 Basic earnings per share $ 1.40 $ 1.03 Diluted earnings per share $ 1.40 $ 1.03 We derived the pro forma results for the Tyman and LMI acquisition based on historical financial information obtained from the sellers and certain management assumptions. Our Tyman pro forma adjustments relate to the impact of preliminary fair value adjustments on the underlying assets and liabilities of Tyman, transaction costs and the financing of the Tyman Acquisition, and the conversion of Tyman’s financial information prepared in accordance with IFRS to Quanex accounting policies in accordance with U.S. GAAP. 58 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 3. Accounts Receivable and Allowance for Credit Losses Accounts receivable consisted of the following as of October 31, 2025 and 2024 (in thousands): October 31, 2025 2024 Trade receivables $ 202,549 $ 191,981 Other 4,874 5,962 Total 207,423 197,943 Less: Allowance for credit losses 2,039 254 Accounts receivable, net $ 205,384 $ 197,689 Accounts receivable, net as of October 31, 2023 was $ 97.3 million. The changes in our allowance for credit losses were as follows (in thousands): Year Ended October 31, 2025 2024 2023 Beginning balance as of November 1, 2024, 2023 and 2022 $ 254 $ 843 $ 289 Current period provision for expected credit losses 2,032 137 711 Amounts written off ( 255 ) ( 782 ) ( 165 ) Recoveries 2 12 — Foreign currency translation adjustments 6 44 8 Balance as of October 31, 2025, 2024 and 2023 $ 2,039 $ 254 $ 843 4. Inventories Inventories consisted of the following at October 31, 2025 and 2024 (in thousands): October 31, 2025 2024 Raw materials $ 85,054 $ 81,330 Finished goods and work in process 165,711 192,448 Supplies and other 3,357 1,772 Total $ 254,122 $ 275,550 5. Property, Plant and Equipment Property, plant and equipment consisted of the following at October 31, 2025 and 2024 (in thousands): October 31, 2025 2024 Land and land improvements $ 21,725 $ 99,068 Buildings and building improvements 194,034 186,087 Machinery and equipment 548,623 462,628 Construction in progress 62,018 46,534 Property, plant and equipment, gross 826,400 794,317 Less: Accumulated depreciation 414,809 391,851 Property, plant and equipment, net $ 411,591 $ 402,466 Depreciation expense, including amortization of finance leases, for the years ended October 31, 2025, 2024, and 2023 was $ 64.0 million , $ 34.9 million and $ 27.6 million, respectively. As a result of push-down accounting related to the assets acquired 59 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 year ended October 31, 2025. The reported balances of our property, plant and equipment as of October 31, 2025 have been updated to incorporate reclassifications of balances between categories of assets and between gross and accumulated depreciation values. These reclassifications are immaterial to the current and prior period financial statements. If there are indicators of potential impairment, we evaluate our property, plant and equipment for recoverability over the remaining useful lives of the assets. We did not incur impairment losses associated with these assets for the years ended October 31, 2025, 2024, and 2023. See further discussion at Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies - Long-Lived Assets - Property, Plant and Equipment and Intangible Assets with Defined Lives.” 6. 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 and twenty years . Original terms for equipment-related leases, primarily manufacturing equipment and vehicles, are generally between one 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 (calculated as the present value of lease payments over the term of the lease) 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 and we determined there have been no triggering events for impairment. 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. 60 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The table below presents the lease-related assets and liabilities recorded on the balance sheet at October 31, 2025 and 2024 (in thousands): October 31, Leases Classification 2025 2024 Assets Operating lease assets Operating lease right-of-use assets $ 154,866 $ 126,715 Finance lease assets Property, plant and equipment (less accumulated depreciation of $ 15,680 and $ 10,362 ) 72,275 67,046 Total lease assets $ 227,141 $ 193,761 Liabilities Current Operating Current operating lease liabilities $ 15,446 $ 12,475 Finance Current maturities of long-term debt 4,477 3,688 Noncurrent Operating Noncurrent operating lease liabilities 145,459 117,560 Finance Long-term debt 56,256 56,988 Total lease liabilities $ 221,638 $ 190,711 The table below presents the components of lease costs for the year ended October 31, 2025 and 2024 (in thousands): Year Ended October 31, 2025 2024 Operating lease cost $ 23,758 $ 13,074 Finance lease cost Amortization of leased assets 4,970 3,915 Interest on lease liabilities 2,934 2,599 Variable lease costs 3,441 2,450 Total lease cost $ 35,103 $ 22,038 The table below presents supplemental cash flow information related to leases for the year ended October 31, 2025 and 2024 (in thousands): Year Ended October 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Finance leases - financing cash flows $ 4,026 $ 3,068 Finance leases - operating cash flows $ 2,934 $ 2,599 Operating leases - operating cash flows $ 21,077 $ 11,731 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 43,121 $ 89,796 Finance leases $ 2,901 $ 8,507 61 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The table below presents the weighted average remaining lease terms and weighted average discount rates for the Company's leases as of October 31, 2025 and 2024: October 31, 2025 2024 Weighted average remaining lease term (in years) Operating leases 11.2 11.5 Financing leases 15.1 16.3 Weighted average discount rate Operating leases 5.64 % 5.31 % Financing leases 4.92 % 4.84 % The table below presents the maturity of the lease liabilities as of October 31, 2025 (in thousands): Year ended October 31, 2025 Operating Leases Finance Leases 2026 $ 23,884 $ 7,323 2027 21,242 7,173 2028 19,576 6,830 2029 18,314 6,498 2030 16,982 6,146 Thereafter 120,209 51,637 Total lease payments 220,207 85,607 Less: present value discount 59,302 24,874 Total lease liabilities $ 160,905 $ 60,733 7. Goodwill and Intangible Assets Goodwill The change in the carrying amount of goodwill for the years ended October 31, 2025 and 2024 was as follows (in thousands): Year Ended October 31, 2025 2024 Beginning balance as of November 1, 2024 and 2023 $ 574,711 $ 182,956 Acquisitions — 385,045 Measurement period adjustments ( 3,989 ) — Goodwill impairment charge ( 302,284 ) — Foreign currency translation adjustment 2,908 6,710 Balance as of October 31, 2025 and 2024 $ 271,346 $ 574,711 In connection with our restructuring, we reassigned goodwill among certain of our reporting units using a relative 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 both the discounted cash flow method under the income approach and the market approach. The resulting fair value was lower than the carrying value for certain reporting units as a result of the prolonged decline in our stock price through the testing date, driven by weaker consumer confidence and high levels of uncertainty across the industry, necessitating the recognition of a non-cash goodwill impairment charge of $302.3 62 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) million, which has been recorded in the consolidated statements of (loss) income within “Goodwill impairment charges” for the year ended October 31, 2025. As a result of the restructuring in the third quarter of 2025, we had ten reporting units, nine of which comprised our goodwill balance prior to the goodwill impairment during the nine months ended July 31, 2025. These ten reporting units were aggregated into our three reportable segments. After the goodwill impairment, seven of the reporting units comprise the remaining goodwill balance. At our last annual test date, August 31, 2025, we evaluated the recoverability of goodwill at each of our seven reporting units with goodwill balances and determined that our goodwill was not impaired. During the fourth quarter of 2025, after reviewing general potential indicators of impairment and noting a triggering event related to the decline in stock price, we performed an interim goodwill impairment assessment as of September 30, 2025. Based on the results of this analysis, no additional goodwill impairment was identified. 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 17, “Segment Information.” For additional discussion of our acquisition of Tyman plc and for further details on the measurement period adjustments, see Note 2, “Acquisitions.” Identifiable Intangible Assets Amortizable intangible assets consisted of the following as of October 31, 2025 and 2024 (in thousands): October 31, 2025 October 31, 2025 October 31, 2024 Remaining Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Customer relationships 16 years $ 506,473 $ 141,462 $ 512,131 $ 112,748 Trademarks and trade names 18 years 240,622 59,833 243,434 47,685 Patents and other technology 11 years 26,105 22,768 25,164 22,387 Total $ 773,200 $ 224,063 $ 780,729 $ 182,820 We do not estimate a residual value associated with these intangible assets. See additional disclosure at Note 1, "Nature of Operations, Basis of Presentation and Significant Accounting Policies - Restructuring." The aggregate amortization expense associated with identifiable intangible assets for the years ended October 31, 2025, 2024, and 2023 was $ 39.3 million, $ 21.6 million and $ 12.1 million, respectively. During the year ended October 31, 2025, we recorded a one-time adjustment to amortization expense of $ 3.5 million . Estimated remaining amortization expense, assuming current in tangible balances and no new acquisitions, for future fiscal years as of October 31, 2025 (in thousands): Estimated Amortization Expense 2026 $ 38,873 2027 38,873 2028 33,640 2029 33,623 2030 32,189 Thereafter 371,939 Total $ 549,137 As discussed in Note 1, "Nature of Operations, Basis of Presentation and Significant Accounting Policies - Long-Lived Assets,” we did not record any impairment charges related to property, plant and equipment or intangible assets as a result of the restructuring in the third quarter of 2025 or the decline in stock price in the fourth quarter of 2025. We did not incur impairment losses related to our identifiable intangible assets during the years ended October 31, 2025, 2024, and 2023. 63 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. Accrued Liabilities Accrued liabilities consisted of the following at October 31, 2025 and 2024 (in thousands): October 31, 2025 2024 Payroll, payroll taxes and employee benefits $ 34,588 $ 45,642 Accrued insurance and workers compensation 12,331 10,765 Sales allowances 11,677 13,338 Deferred compensation (current portion) 3,310 855 Goods and services 3,541 1,378 Deferred revenue 2,355 3,149 Warranties 887 1,362 Audit, legal, and other professional fees 6,397 4,222 Accrued taxes, other 4,870 5,329 Freight 1,958 2,040 Utilities 1,297 1,760 Other 11,944 13,783 Accrued liabilities $ 95,155 $ 103,623 9. Debt Long-term debt consisted of the following at October 31, 2025 and 2024 (in thousands): October 31, 2025 2024 Term Loan A Facility $ 468,750 $ 493,750 Revolving Credit Facility 172,500 222,500 Finance lease obligations and other 62,619 60,676 Unamortized deferred financing fees ( 11,040 ) ( 13,983 ) Total debt 692,829 762,943 Less: Current maturities of long-term debt 27,561 25,745 Long-term debt $ 665,268 $ 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 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, 2023. The Amended Credit Agreement (i) increased the senior secured revolving credit facility to an aggregate principal amount of $ 475 million (the “Revolving Credit Facility”) and (ii) provides for a senior secured term loan A facility in an aggregate principal amount of $ 500 million (the “Term A Facility” and together with the Revolving Credit Facility, the “Facilities”). The Revolving Credit Facility will include alternative currency, letter of credit, and swing-line sub-facilities of $ 100 million, $ 30 million, and $ 15 million, respectively. 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 64 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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 percentages are based on the Consolidated Net Leverage Ratio outlined in the following table: Pricing Level Consolidated 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 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 Facilities provide for incremental revolving credit commitments for a minimum principal amount of $ 10.0 million, up to an aggregate amount of the greater of (1) $ 310.0 million and (2) 100% of Consolidated EBITDA, subject to the lender's discretion to elect or decline the incremental increase. We can also borrow up to the lesser of $ 15.0 million or the revolving credit commitment, as defined, under a Swingline feature of the Credit Agreement. The Facilities contain 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 the Consolidated Net Leverage Ratio, as defined, must be greater than 3.25 to 1.00. 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 Credit Facility. Some of these limitations, however, do not take effect so long as total leverage 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, were used as collateral for the Credit Agreement. As of October 31, 2025, we had $ 641.3 million of borrowings outstanding under the Facilities (reduced by unamortized debt issuance costs of $ 11.0 million), $ 6.2 million of outstanding letters of credit and $ 62.6 million outstanding primarily under finance leases and other debt. We had $ 296.3 million available for use under the Revolving Credit Facility at October 31, 2025. The borrowings outstanding as of October 31, 2025 under the Facilities accrue interest at 6.57 % per annum, and our weighted average borrowing rate for borrowings outstanding during the years ended October 31, 2025 and 2024 was 6.83 % and 7.20 %, respectively. We were in compliance with our debt covenants as of October 31, 2025. We maintain certain finance lease obligations related to equipment purchases, vehicles, and warehouse space. Refer to Note 6 “Leases” for further information regarding our finance leases. 65 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The table below presents the scheduled maturity dates of our long-term debt outstanding (excluding deferred financing fees of $ 11.0 million) at October 31, 2025 (in thousands): Facilities Finance Leases and Other Aggregate Maturities 2026 $ 25,000 $ 8,351 $ 33,351 2027 25,000 8,031 33,031 2028 25,000 6,830 31,830 2029 566,250 6,498 572,748 2030 — 6,146 6,146 Thereafter — 51,637 51,637 Total debt payments 641,250 87,493 728,743 Less: present value discount of finance leases — 24,874 24,874 Total $ 641,250 $ 62,619 $ 703,869 10. Retirement Plans We have a number of retirement plans covering substantially all employees. We have provided both defined benefit and defined contribution plans, though we terminated our defined benefit plan in 2023. In general, an employee’s coverage for retirement benefits depends on the location of employment. Defined Benefit Plan During the year ended October 31, 2023, we terminated our defined benefit plan and settled the obligation during the three months ended October 31, 2023. Until such time that the termination was complete, the participants received an interest related credit on their respective balance equivalent to the prevailing 30-year Treasury rate. The majority of our pension plan participants had their benefit determined pursuant to the cash balance formula. For the remaining participants, the benefit formula was a traditional formula for retirement benefits, whereby the plan payed benefits to employees using a formula which considered years of service and pensionable compensation. During the year ended October 31, 2023, we contributed $ 6.3 million to the plan in connection with the termination and distribution of the obligation. The net periodic benefit cost for the year ended October 2023, was as follows (in thousands): Year Ended October 31, 2023 Service cost $ 383 Interest cost 1,558 Expected return on plan assets ( 1,465 ) Amortization of net loss 42 Settlements 5,431 Net periodic benefit cost $ 5,949 Defined Contribution Plan We also sponsor a defined contribution plan into which we and our employees make contributions. We match 100 % of employee deferrals up to 5 % of eligible annual compensation for all employees under the plan. We do not offer our common stock as a direct investment option under these plans. For the years ended October 31, 2025, 2024 and 2023, we contributed approximately $ 10.4 million, $ 7.7 million and $ 6.5 million for these plans, respectively. Other Plans We have had supplemental benefit plans covering certain executive officers and currently have a non-qualified deferred compensation plan covering members of the Board of Directors and certain key employees. During the year ended October 31, 2024, the supplemental benefit plan was terminated and the benefits associated with this plan were distributed in accordance with Internal Revenue Service regulations. As of October 31, 2025 and 2024 our liability under the deferred compensation plan 66 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) was approximately $ 4.1 million a nd $ 4.7 million, respectively. As of October 31, 2025 and 2024, the current portion of these liabilities was recorded under the caption “Accrued Liabilities,” and the long-term portion was included under the caption “Other Liabilities” in the accompanying balance sheets. 11. Income Taxes The provision or benefit for income taxes includes U.S. federal income taxes, foreign income taxes and state income taxes. We provide for income taxes on taxable income at the applicable statutory rates. The following table summarizes the components of income tax expense for the years ended October 31, 2025, 2024 and 2023 (in thousands): Year Ended October 31, 2025 2024 2023 Current Federal $ 9,396 $ 12,453 $ 2,631 State and local 2,950 3,326 1,860 Non-United States 14,402 8,580 4,907 Total current 26,748 24,359 9,398 Deferred Federal ( 19,091 ) ( 2,371 ) 4,637 State and local ( 2,997 ) ( 154 ) 1,015 Non-United States 3,553 ( 12,811 ) ( 505 ) Total deferred ( 18,535 ) ( 15,336 ) 5,147 Total income tax expense $ 8,213 $ 9,023 $ 14,545 For financial reporting purposes, income before income taxes for the years ended October 31, 2025, 2024 and 2023 includes the following components (in thousands): Year Ended October 31, 2025 2024 2023 Domestic $ ( 221,468 ) $ 34,315 $ 42,586 Foreign ( 21,125 ) 7,767 54,460 Total (loss) income before income taxes $ ( 242,593 ) $ 42,082 $ 97,046 67 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table reconciles our effective income tax rate to the federal statutory rate for the years ended October 31, 2025, 2024 and 2023: Year Ended October 31, 2025 2024 2023 United States tax at statutory rate 21.0 % 21.0 % 21.0 % Goodwill impairment ( 22.4 ) % — % — % Deferred true up ( 3.3 ) % — % — % State and local income taxes net of federal tax benefit 0.5 % 5.9 % 1.8 % Foreign tax rate differential ( 0.7 ) % ( 1.4 ) % 1.1 % U.K. patent box benefit 1.8 % ( 12.5 ) % ( 5.9 ) % Non-deductible transaction costs — % 8.4 % — % U.S. income tax credits 2.3 % ( 8.4 ) % ( 4.9 ) % Foreign inclusions (including global intangible low-taxed income) ( 2.6 ) % 8.4 % 4.6 % Permanent differences ( 0.7 ) % ( 1.3 ) % 1.3 % Tax return to accrual adjustments 0.7 % 3.5 % ( 2.3 ) % Change in valuation allowance — % ( 3.1 ) % — % Change in uncertain tax position ( 0.3 ) % 0.1 % ( 1.1 ) % Other 0.3 % 0.8 % ( 0.6 ) % Effective tax rate ( 3.4 ) % 21.4 % 15.0 % During the year ended October 31, 2025, the Company recorded a $ 9.0 million discrete income tax charge related to post measurement period corrections to the deferred tax assets and liabilities established in the acquisition of Tyman. This amount has been recognized through current-period income tax expense. The discrete income tax charge is reflected in the line item “Income tax expense” in the Consolidated Statements of (Loss) Income for the year ended October 31, 2025, and is separately disclosed in the Company’s effective tax rate reconciliation as “Deferred true up”. Our earnings from our foreign subsidiaries qualify for Federal Dividend Received Deduction and are not subject to withholding taxes upon remittance to the U.S. However, some of the states do not conform to the Federal Dividend Received Deduction. As a result, we have $ 0.7 million of future tax liability related to potential repatriation of unremitted foreign retained earnings. The amount of undistributed foreign earnings and profits from international operations as of the years ended October 31, 2025 and 2024, respectively, was $ 66.1 million and $ 21.7 million. On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. We have completed our initial assessment of the OBBBA corporate tax provisions which were enacted on July 4, 2025 and estimated our impact on the consolidated financial statements to be immaterial and primarily resulted in a reclass of our income tax payable and deferred tax liability related to the timing differences arising from accelerated tax depreciation. We continue to monitor the impact of these updates. The Organization for Economic Co-operation and Development ("OECD") Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) developed an agreement on a two-pillar approach to help address the tax challenges arising from the digitalization of the economy. Pillar One applies to large multinational enterprises and re-allocates part of their profit to the countries where they sell their products and provide services. Quanex does not expect to be subject to the Pillar One rules. Pillar Two aims to establish a minimum global tax rate of 15%, assessed through a top-up tax imposed on a country-by-country basis. In 2023, certain jurisdictions in which we operate enacted legislation consistent with the OECD Pillar Two model effective for taxation year beginning on or after January 1, 2024. We have accrued for additional top-up tax in the United Kingdom and United Arab Emirates where our effective tax rate drops below 15%. The Pillar Two legislation has an immaterial impact our 2025 fiscal year effective tax rate. However, further changes to our entity structure or changes in jurisdictions in which we operate could adversely impact analysis. 68 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Significant components of our net deferred tax liabilities and assets were as follows (in thousands): October 31, 2025 2024 Deferred tax assets: Employee benefit obligations $ 4,179 $ 6,830 Accrued liabilities and reserves 2,836 4,132 Pension and other benefit obligations 36 125 Inventory 8,502 2,368 Right of use liability 32,470 31,399 Research and development 5,894 5,810 Loss and tax credit carry forwards 11,311 9,637 Other — 24 Total gross deferred tax assets 65,228 60,325 Less: Valuation allowance 4,408 4,395 Total deferred tax assets, net of valuation allowance 60,820 55,930 Deferred tax liabilities: Property, plant and equipment 39,305 45,554 Goodwill and intangibles 123,596 138,396 Investments in foreign subsidiaries 700 500 Right of use asset 30,193 29,939 Other 313 — Total deferred tax liabilities 194,107 214,389 Net deferred tax liabilities $ 133,287 $ 158,459 As of October 31, 2025, gross foreign capital loss, gross foreign net operating loss and gross state operating loss carry forwards t otaled $ 14.2 million, $ 10.8 million and $ 25.9 million, respectively. The capital loss and the majority of the foreign net operating loss can be carried forward indefinitely. The majority of the state losses begin to expire in 2033. We evaluate tax benefits of operating losses and tax credit carry forwards on an ongoing basis, including a review of historical and projected future operating results, the eligible carry forward period and other circumstances. We have recorded a valuation allowance for the foreign capital loss and certain foreign operating and state net operating losses as of October 31, 2025 and 2024, totaling $ 4.4 million and $ 4.4 million, respectively. The valuation allowance can be affected in future periods by changes to tax laws, changes to statut ory tax rates, and changes in estimates of future taxable income. To fully realize these net deferred tax assets, we will need to generate sufficient future taxable income in the jurisdictions where these tax attributes exist during the periods in which the attributes can be utilized. As of each reporting date, management considers the weight of all evidence, both positive and negative, to determine if a valuation allowance is necessary for each jurisdiction’s net deferred tax assets. We place greater weight on historical evidence over future predictions of our ability to utilize net deferred tax assets. We consider future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income in prior carryback year(s) if carryback is permitted under applicable law. 69 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table shows the change in the unrecognized income tax benefit associated with uncertain tax positions for the years ended October 31, 2025, 2024 and 2023 (in thousands): Unrecognized Income Tax Benefits Balance at October 31, 2022 $ 1,361 Reassessment of position ( 1,111 ) Balance at October 31, 2023 $ 250 Reversal ( 250 ) Balance at October 31, 2024 $ — Reassessment of position 710 Balance at October 31, 2025 $ 710 We account for uncertain tax benefits in accordance with guidance in ASC 740, which prescribes the minimum recognition threshold a tax position taken or expected to be tak en in a tax return is required to meet before being recognized in the financial statements. During the year ended October 31, 2025, we accrued $ 0.7 million of unrecognized tax benefits primarily related to transfer pricing matters. We, along with our subsidiaries, file income tax returns in the U.S. and various state and foreign jurisdictions. In certain jurisdictions, the statute of limitations has not yet expired. We generally remain subject to examination of our U.S. income tax returns for 2022 and subsequent years. We generally remain subject to examination of our various state and foreign income tax returns for a period of four to five years from the date the return was filed. The state impact of a reported federal adjustment or change remains subject to examination by various states within the longer of one year or the expiration date of the otherwise applicable statute of limitations. We classify interest on income tax as income tax expenses and classify penalties on income tax as other expenses. 12. Commitments and Contingencies Purchase Obligations We are a party to non-cancelable purchase obligations primarily for door hardware, primary and secondary steel and primary and se condary aluminum used in our manufacturing processes, as well as expenditures related to capital projects in progress. We paid $ 9.5 million and $ 4.5 million pursuant to these arrangements for the years ended October 31, 2025 and 2024, respectively. These obligations total $ 8.3 million and $ 2.5 million at October 31, 2025 and 2024, respectively, and extend through fiscal 2027 . Future amounts paid pursuant to th ese arrangements will depend, to some extent, on our usage. Asset Retirement Obligation We maintain asset retirement obligations associated with leased facilities primarily in the U.K. We have estimated our future cash flows associated with this asset retirement obligation and recorded an asset and corresponding liability. We are depreciating the assets and accre ting the liabilities over the terms of the corresponding leases and have included an asset retirement obligation of $ 3.0 million in Other Liabilities on the consolidated balance sheet. 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. At present, 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 fi scal 2026. Wh ile 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. 70 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. On September 19, 2025, a purported shareholder class action lawsuit against the Company and two of its officers was filed in federal court in the Southern District of Texas, titled Zanol v. Quanex Building Products Corporation et al, Case No. 4:25-cv-04453. The suit alleges certain violations of federal securities laws related to public disclosures made by the Company in 2025 principally related to our window and door operations in Mexico and seeks unspecified damages. While the ultimate outcome of any legal matter cannot be predicted with certainty, the Company strongly believes that this complaint is without merit, intends to vigorously defend itself and its officers against the allegations, and maintains insurance coverage for such matters. At present, the Company cannot reasonably estimate a range of loss, if any, for this action based on its early stage and the information available to the Company, and accordingly, the Company has not accrued any liability associated with this action. 13. Fair Value Measurements 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 participant assumptions 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 b y correlation or other means. • Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Assets and Liabilities Measured at Fair Value on a Recurring Basis Carrying amounts reported on the balance sheets for cash, cash equivalen ts, 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 changes in interest rate risk. As a result, the fair value of our debt instruments approximates carrying value at October 31, 2025 and 2024 (Level 2 measurement). As of October 31, 2025 , we have outstanding forward foreign exchange contracts to hedge our foreign currency exposures 71 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) against the Mexican Peso (“MXN”) to U.S. Dollar (“USD”), with a notional principal amount of $ 20.0 million . Hedge accounting is not applied to our forward exchange contracts. These contracts have a range of maturities up to February 27, 2026. Our forward foreign exchange contracts are adjusted to fair value by recording gains and losses to “Other, net,” and we record the related asset or liability to “Other Assets” or “Current Liabilities” in the accompanying consolidated statement of (loss) income and consolidated balance sheets, respectively. During the year ended October 31, 2025 and 2024, we recognized a net loss of less than $ 0.1 million and $ 0.3 million , respectively, related to our forward foreign exchange contracts. The value of our forward foreign exchange contracts fluctuates based on exchange rate fluctuations against the USD to GBP, and the MXN to USD (L evel 2 measurements). During the twelve months ended October 31, 2025, we subscribed to Bonds for the Reconstruction for a Free Argentina (“BOPREAL”) issued by the Argentine Central Bank. The BOPREAL bond subscriptions were denominated in Argentine Pesos (“ARS”) and settled in USD during the twelve months ended October 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 October 31, 2025, we do not have any BOPREAL bond subscriptions outstanding. Our restricted stock units and performance share awards are marked-to-market on a quarterly basis during a three-year vesting period based on market data. For further information refer to Note 14, “Stock-Based Compensation - Performance Share Awards.” We performed a fair value assessment corresponding with the purchase of Tyman. Due to the unique nature of this acquisition, this is considered a Level 3 measurement. For further information refer to Note 2, “Acquisitions.” Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. The result of our third quarter 2025 goodwill impairment quantitative test indicated that the fair value of certain reporting units were less than the carrying value of the respective reporting units, resulting in a goodwill impairment of $302.3 million. We estimated the fair value utilizing an income approach and market approach valuation techniques, which incorporated significant unobservable Level 3 inputs. For further information, refer to Note 7, “Goodwill and Intangible Assets”. 14. 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 the 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/or 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 or a three year graded vesting schedule with service and continued employment as the only vesting criteria. The recipient of a restricted stock award is entitled to all of the rights of a shareholder, except that the awards are nontransferable during the vesting period and dividends are not paid until vesting. 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. 72 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) A summary of non-vested restricted stock award activity during the years ended October 31, 2025, 2024 and 2023, follows: Restricted Stock Awards Weighted Average Grant Date Fair Value per Share Non-vested at October 31, 2022 212,100 $ 20.86 Granted 94,700 23.49 Vested ( 54,400 ) 18.49 Forfeited ( 10,100 ) 22.30 Non-vested at October 31, 2023 242,300 22.36 Granted 72,900 32.15 Vested ( 66,600 ) 22.30 Forfeited ( 11,800 ) 20.68 Non-vested at October 31, 2024 236,800 25.85 Granted 107,682 29.19 Vested ( 84,100 ) 22.95 Forfeited ( 2,400 ) 29.75 Non-vested at October 31, 2025 257,982 $ 28.15 The total weighted average grant-date fair value of restricted stock awards that vested during the years ended October 31, 2025, 2024 and 2023 wa s $ 1.9 million, $ 1.4 million and $ 1.0 million, respectively. As of October 31, 2025, total unrecognized compensation cost related to unamortized restricted stock awards totaled $ 3.0 million. We expect to recognize this expense over the remaining weighted average period of 1.8 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 as further described below. As a result, stock options were not granted during the years ended October 31, 2025, 2024 and 2023 . 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 increase in additional paid-in-capital. We used the Black-Scholes pricing model to estimate the grant date fair value. The inputs to this model included expected volatility, expected term, a risk-free rate and expected dividend rate at the time of grant. For employees who were nearing retirement-eligibility, we recognized stock option expense ratably over the shorter of the vesting period or the period from the grant-date to the retirement-eligibility date. 73 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes our stock option activity for the years ended October 31, 2025, 2024 and 2023. Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (000s) Outstanding at October 31, 2022 175,117 $ 19.39 2.9 $ 485 Exercised ( 63,587 ) 19.12 Forfeited/Expired ( 4,000 ) 21.11 Outstanding at October 31, 2023 107,530 $ 19.48 2.3 $ 792 Exercised ( 29,280 ) 19.58 Outstanding at October 31, 2024 78,250 $ 19.45 1.5 $ 752 Exercised ( 9,300 ) 19.97 Outstanding at October 31, 2025 68,950 19.38 0.6 $ — Vested at October 31, 2025 68,950 $ 19.38 0.6 $ — Exercisable at October 31, 2025 68,950 $ 19.38 0.6 $ — Intrinsic value is the amount by which the market price of the common stock on the date of exercise exceeds the exercise price of the stock option. For the years ended October 31, 2025, 2024 and 2023, the total intrinsic value of our stock options that were exercised to taled $ 0.1 million, $ 0.4 million and $ 0.5 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 vesting 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 years ended October 31, 2025, 2024 and 2023, 28,240 , 26,215 and 38,704 restricted stock units, respectively, were granted to non employee directors with corresponding weighted average grant date fair value of $ 29.02 , $ 26.70 , and $ 20.67 , respectively. During the fiscal year ended October 31, 2023, 21,774 restricted stock units, which were awarded to key employees, vested. During the years ended October 31, 2025, 2024 and 2023, we paid $ 0.6 million , $ 0.6 million and $ 0.4 million to settle restricted stock units. During the year ended October 31, 2024, 166,070 restricted stock units were granted to key employees with a weighted average grant date fair value of $ 31.83 . These key employee grants vest in accordance with criteria which extend up to three years. During the years ended October 31, 2025 and 2024 , 64,293 and 42,933 of these grants vested, respectively, and 2,756 and 1,242 were forfeited, respectively. During the years ended October 31, 2025 and 2024 w e paid approximately $ 1.4 million and $1.2 million to settle these grants, respectively. Performance Share Award s 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 and March 2025 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 shares may ultimately vest. 74 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarizes our performance share grants and the grant date fair value for the RONA performance metric: 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 — Based on the results of the performance conditions, none of the December 2022 grants are expected to vest. In December 2024, 78,589 shares vested pursuant to the December 2021 grant, which were settled with a cash payment of $ 2.4 million. In December 2023, 122,400 shares vested pursuant to the December 2020 grant, which were settled with a cash payment of $ 3.4 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 awarded 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 performance restricted stock units 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 utilized 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 $ 29.75 — March 1, 2025 2,200 $ 18.89 — The performance restricted stock units are not considered outstanding shares, do not have voting rights, and are excluded 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. Based on the results of the vesting criteria, none of the December 2022 grants are expected to vest. 75 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO 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 years ended October 31, 2025, 2024 and 2023 (in thousands): Year Ended October 31, 2025 2024 2023 Restricted stock awards $ 2,388 $ 1,846 $ 1,712 Restricted stock units (1) ( 592 ) 2,784 1,686 Performance share awards (1) ( 706 ) 1,599 5,106 Performance restricted stock units 1,297 1,106 809 Total compensation expense 2,387 7,335 9,313 Income tax effect 81 1,570 1,396 Net compensation expense $ 2,306 $ 5,765 $ 7,917 (1) The change in market value of our common stock will have a positive or negative impact on the compensation expense of our share based liability awards, including restricted stock units and performance share awards. 15. Stockholders' Equity As of October 31, 2025, our authorized capital stock consists of 125,000,000 shares of common stock, at par value of $ 0.01 per s hare, and 1,000,000 shares of preferred stock, with no par value. As of October 31, 2025 and 2024, we had 51,211,469 and 51,266,501 shares of common stock issued, respectively, and 45,674,726 and 47,252,070 shares of common stock outstanding, respectively. There were no shares of preferred stock issued or outstanding at October 31, 2025 and 2024. Stock Repurchase Program and Treasury Stock 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 are made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors. The program does not have an expiration date or a limit on the number of shares that may be purchas ed. During the years ended October 31, 2025 and 2024, we purchased 1,709,119 shares and zero shares, respectively, at a cost of $ 32.4 million and zero , respectively, under this program. 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 shares and 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. For a summary of treasury stock activity for the years ended October 31, 2025, 2024 and 2023, refer to the Consolidated Statements of Stockholders' Equity located elsewhere herein. 76 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 16. Other, net Other income included under the caption “Other, net” on the accompanying consolidated statements of income (loss), consisted of the following (in thousands): Year Ended October 31, 2025 2024 2023 Foreign currency transaction gains (losses) $ 5,015 $ ( 677 ) $ ( 146 ) Foreign currency exchange derivative (losses) gains ( 36 ) 6,232 1 Pension service (expense) benefit ( 64 ) 903 ( 5,566 ) Interest income 2,092 1,690 248 Other 164 ( 299 ) ( 56 ) Other income (loss) $ 7,171 $ 7,849 $ ( 5,519 ) 17. 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 business segments: (1) NA Fenestration, comprising four operating segments primarily focused on the fenestration market in North America including vinyl profiles, insulating glass spacers, screens, custom compound mixing, and other fenestration components; (2) EU Fenestration, comprising our U.K.-based vinyl extrusion business, manufacturing vinyl profiles 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 reportable 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, inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during annual planning process. Other general and administrative costs associated with the corporate office are allocated to the reportable segments, based upon each segment’s relative operating activity. The accounting policies of our operating segments are the same as those used to prepare the accompanying consolidated financial statements. Corporate general and administrative expenses allocated during the years ended October 31, 2025, 2024 and 2023 were $ 40.3 million, $ 27.3 million and $ 23.5 million, respectively. 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. Our CODM, the President and Chief Executive Officer, reviews several measures of segment profitability to assess performance and allocate resources. Segment operating income (loss) is the measure of segment profit or loss that is most consistent with GAAP and is used by the CODM to evaluate segment results, allocate resources, and monitor performance against the annual budget and forecasts. The CODM considers forecast-to-actual variances on a monthly basis using the segment operating income (loss) for each segment when making decisions about allocating capital and personnel to the segments. The CODM also uses segment operating income (loss), along with net sales, to assess the performance for each segment by comparing the results of each segment with one another and in the compensation of certain employees. The Company does not provide segment asset information as such information is not provided to the CODM and accordingly, asset information is not used in assessing segment performance. 77 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Selected segment information for the years ended October 31, 2025, 2024 and 2023 was as follows (in thousands): Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total Year Ended October 31, 2025 Net sales $ 841,674 $ 646,627 $ 388,210 $ ( 38,870 ) $ 1,837,641 Cost of sales (excluding depreciation and amortization) 635,481 440,141 298,316 ( 35,525 ) 1,338,413 Selling, general and administrative 128,009 83,716 48,273 17,263 277,261 Restructuring charges 7,936 34 205 2,016 10,191 Depreciation and amortization 51,681 29,204 21,248 1,311 103,444 Goodwill impairment charges 163,198 54,934 84,152 — 302,284 Operating (loss) income ( 144,631 ) 38,598 ( 63,984 ) ( 23,935 ) ( 193,952 ) Year Ended October 31, 2024 Net sales $ 427,839 $ 559,995 $ 309,441 $ ( 19,413 ) $ 1,277,862 Cost of sales (excluding depreciation and amortization) 349,379 389,760 252,111 ( 19,012 ) 972,238 Selling, general and administrative 51,564 58,100 31,068 49,738 190,470 Depreciation and amortization 16,580 25,119 18,348 281 60,328 Operating income (loss) 10,316 87,016 7,914 ( 50,420 ) 54,826 Year Ended October 31, 2023 Net sales $ 296,959 $ 544,585 $ 298,361 $ ( 9,322 ) $ 1,130,583 Cost of sales (excluding depreciation and amortization) 239,505 378,791 244,026 ( 9,263 ) 853,059 Selling, general and administrative 21,608 62,349 24,834 15,166 123,957 Depreciation and amortization 3,968 22,351 16,277 270 42,866 Operating income (loss) 31,878 81,094 13,224 ( 15,495 ) 110,701 The following tables reconcile our segment presentation, as previously reported in our Annual Report on Form 10-K for the twelve months ended October 31, 2024 and 2023, to the current presentation (in thousands): 78 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NA Fenestration EU Fenestration NA Cabinet Components Tyman Unallocated Corp. & Other Total Year Ended October 31, 2024 Net sales $ 650,058 $ 230,712 $ 198,424 $ 203,435 $ ( 4,767 ) $ 1,277,862 Cost of sales (excluding depreciation and amortization) 498,378 144,585 168,414 163,946 ( 3,085 ) 972,238 Selling, general and administrative 56,630 31,318 20,727 44,453 37,342 190,470 Depreciation and amortization 20,994 10,420 12,244 16,438 232 60,328 Operating income (loss) 74,056 44,389 ( 2,961 ) ( 21,402 ) ( 39,256 ) 54,826 Hardware Solutions (1) Extruded Solutions (2) Custom Solutions (3) Unallocated Corp. & Other Total Year Ended October 31, 2024 Net sales $ 427,839 $ 559,995 $ 309,441 $ ( 19,413 ) $ 1,277,862 Cost of sales (excluding depreciation and amortization) 349,379 389,760 252,111 ( 19,012 ) 972,238 Selling, general and administrative 51,564 58,100 31,068 49,738 190,470 Depreciation and amortization 16,580 25,119 18,348 281 60,328 Operating income (loss) 10,316 87,016 7,914 ( 50,420 ) 54,826 NA Fenestration EU Fenestration NA Cabinet Components Tyman Unallocated Corp. & Other Total Year Ended October 31, 2023 Net sales $ 667,482 $ 250,774 $ 215,445 $ — $ ( 3,118 ) $ 1,130,583 Cost of sales (excluding depreciation and amortization) 517,805 158,491 178,210 — ( 1,447 ) 853,059 Selling, general and administrative 56,979 32,350 21,074 — 13,554 123,957 Depreciation and amortization 20,539 9,849 12,208 — 270 42,866 Operating income (loss) 72,159 50,084 3,953 — ( 15,495 ) 110,701 Hardware Solutions (1) Extruded Solutions (2) Custom Solutions (3) Unallocated Corp. & Other Total Year Ended October 31, 2023 Net sales $ 296,959 $ 544,585 $ 298,361 $ ( 9,322 ) $ 1,130,583 Cost of sales (excluding depreciation and amortization) 239,505 378,791 244,026 ( 9,263 ) 853,059 Selling, general and administrative 21,608 62,349 24,834 15,166 123,957 Depreciation and amortization 3,968 22,351 16,277 270 42,866 Operating income (loss) 31,878 81,094 13,224 ( 15,495 ) 110,701 (1) The Hardware Solutions segment contains a portion of the previously reported NA Fenestration and Tyman segments. (2) The Extruded Solutions segment contains a portion of the NA Fenestration, EU Fenestration, and Tyman segments. (3) The Custom Solutions segment contains a portion of the NA Fenestration, NA Cabinet Components, and Tyman segments. The following table summarizes the change in the carrying amount of goodwill by segment for the years ended October 31, 2025 and 2024 (in thousands): 79 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Hardware Solutions Extruded Solutions Custom Solutions Unallocated Corp. & Other Total Balance as of October 31, 2023 $ 2,784 $ 99,632 $ 80,540 $ — $ 182,956 Tyman acquisition 163,647 140,329 81,069 — 385,045 Foreign currency translation adjustment 3,936 3,672 ( 898 ) — 6,710 Balance as of October 31, 2024 $ 170,367 $ 243,633 $ 160,711 $ — $ 574,711 Measurement period adjustment 6,984 ( 9,986 ) ( 987 ) — ( 3,989 ) Goodwill impairment charge ( 163,198 ) ( 54,934 ) ( 84,152 ) — ( 302,284 ) Foreign currency translation adjustment 448 2,220 240 — 2,908 Balance as of October 31, 2025 $ 14,601 $ 180,933 $ 75,812 $ — $ 271,346 As a result of the impairment test performed during the year ended October 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 7, “Goodwill and Intangible Assets”, located herewith. We did not allocate non-operating expense or income tax expense to the reportable segments. The following table reconciles operating income as reported above to net income for the years ended October 31, 2025, 2024 and 2023 (in thousands): Year Ended October 31, 2025 2024 2023 Operating (loss) income $ ( 193,952 ) $ 54,826 $ 110,701 Interest expense ( 55,812 ) ( 20,593 ) ( 8,136 ) Other, net 7,171 7,849 ( 5,519 ) Income tax expense ( 8,213 ) ( 9,023 ) ( 14,545 ) Net (loss) income $ ( 250,806 ) $ 33,059 $ 82,501 80 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Geographic Information Our manufacturing facilities and all long-lived assets are located primarily in the U.S. and Europe. We attribute our net sales to a geographic region based on the location of the customer. The following tables provide information concerning our net sales for the years ended October 31, 2025, 2024 and 2023, and our long-lived assets as of October 31, 2025 and 2024 (in thousands): Year Ended October 31, Net sales 2025 2024 2023 United States $ 1,248,137 $ 926,864 $ 834,525 Europe 450,359 271,182 244,560 Canada 66,026 35,333 25,845 Asia 58,849 24,091 14,298 Other foreign countries 14,270 20,392 11,355 Total net sales $ 1,837,641 $ 1,277,862 $ 1,130,583 October 31, Long-lived assets, net 2025 2024 United States $ 1,003,958 $ 1,229,157 Europe 355,950 441,129 Other foreign countries 27,032 31,515 Total long-lived assets, net $ 1,386,940 $ 1,701,801 Long-lived assets, net includes: property, plant and equipment, net; goodwill, intangible assets, net, and operating leases. 81 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 18. 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 and contingent shares associated with performance share awards, if dilutive. The computation of basic and diluted earnings per share for the years ended October 31, 2025, 2024 and 2023 follows (in thousands, except per share data): Year Ended October 31, 2025 Net (Loss) Income Weighted Average Shares Per Share Basic and diluted loss per common share $ ( 250,806 ) 46,170 $ ( 5.43 ) Year Ended October 31, 2024 Basic earnings per common share $ 33,059 36,416 $ 0.91 Effect of dilutive securities: Stock options 31 Restricted stock awards 131 Performance restricted stock units 70 Diluted earnings per common share $ 33,059 36,648 $ 0.90 Year Ended October 31, 2023 Basic earnings per common share $ 82,501 32,819 $ 2.51 Effect of dilutive securities: Stock options 33 Restricted stock awards 124 Performance restricted stock units 50 Diluted earnings per common share $ 82,501 33,026 $ 2.50 We do not include equity instruments in our calculation of diluted earnings per share if those instruments would be antidilutive. During the years ended October 31, 2025, 2024 and 2023, we had anti-dilutive restricted stock award equivalents of 23,224 , 1,417 and zero , respectively. 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. 19. 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. Recent Accounting Pronouncements Adopted In November 2023, the FASB issued “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption is permitted. Our adoption of this standard 82 Table of Contents QUANEX BUILDING PRODUCTS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) effective for the fiscal year ending October 31, 2025 resulted in increased disclosures in the notes to its financial statements. This guidance was applied retrospectively to all prior periods presented in the financial statements. Recent 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. 83 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.