Quanex Building Products Announces Third Quarter 2025 Results

New Segment Reporting Implemented
Balance Sheet Further Strengthened with $51.25 Million of Debt Repaid in 3Q25
Cost Synergy Target Reaffirmed
Full Year Guidance Updated

HOUSTON, Sept. 04, 2025 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2025.

The Company reported the following selected financial results:

(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and reconciliation tables for additional information)

George Wilson, Chairman, President and Chief Executive Officer, stated, “A significant amount of work had to be done to re-segment the business, so we are pleased that the work is now complete, and we are operating and reporting in our new segments. We are encouraged by the overall resilience of the business in the current environment, demonstrated by our strong cash flow, which enabled us to repay over $51 million in bank debt in the third quarter of 2025. Our balance sheet is healthy, and our liquidity improved meaningfully during the quarter. We continue to make substantial progress on the integration of the Tyman business. After identifying additional target synergies and adjusting for lower expected volumes and pushing out the timing of when we expect to realize procurement savings, we still believe there is a path to realizing approximately $45 million in cost synergies over time, which is above our initial projection of $30 million. Although macroeconomic uncertainty and low consumer confidence, as well as operational issues related to the legacy Tyman window and door hardware business in Mexico that are ongoing but temporary in nature, posed challenges for us in our third quarter, we remain optimistic about our prospects for profitable growth and value creation.

Looking ahead, we believe Quanex is well positioned due to our solid, flexible financial foundation and advantaged strategic positioning. Despite the macroeconomic uncertainty, our near-term priorities remain unchanged, which include staying focused on the Tyman integration, capturing synergies, generating cash flow to pay down debt and opportunistically repurchasing our stock. As macroeconomic uncertainty subsides and consumer confidence improves, our team is well positioned to capitalize on pent-up demand.”

Third Quarter Results Summary

Quanex generated net sales of $495.3 million during the three months ended July 31, 2025, which represents an increase of 76.7% compared to $280.3 million for the same period of 2024. The increase reflects the contribution from the Tyman acquisition that closed on August 1, 2024. Excluding the contribution from Tyman, net sales would have increased by 1.4% for the third quarter of 2025, mainly due to increased pricing and tariff passthroughs, offset by lower volumes. Inclusive of contributions from the Tyman acquisition, the Company reported increases in net sales of 201.0%, 29.6% and 40.7% for the third quarter of 2025 in its Hardware Solutions, Extruded Solutions and Custom Solutions segments, respectively.   (See Sales Analysis table for additional information)

On a consolidated basis, the decrease in reported earnings for the three months ended July 31, 2025, was primarily the result of a $302.3 million non-cash goodwill impairment related to the re-segmentation of the business. The re-segmentation occurred at a point in time when consumer confidence is low, and equity values for building products companies are depressed. The non-cash goodwill impairment is not related to any performance indicators or revisions to long-term expectations. In addition, ongoing macroeconomic uncertainty, low consumer confidence and operational challenges related to the legacy Tyman window and door hardware business in Mexico impacted results more than expected during the third quarter of 2025. The seasonal uptick Quanex started to see in the second quarter of 2025 didn’t continue to materialize to the degree the Company anticipated, and procurement related cost synergies were lower than expected.

The increase in adjusted earnings during the third quarter of 2025, compared to the same period of 2024, was mostly due to the contribution from the Tyman acquisition combined with the realization of related cost synergies.

Balance Sheet & Liquidity Update

As of July 31, 2025, the Company had total debt of $733.7 million and Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA decreased to 2.6x. As of July 31, 2025, the Company reported a LTM Net Loss of $284.3 million, mainly due to the non-cash goodwill impairment and LTM Adjusted EBITDA was $251.8 million (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)

The leverage ratio for Quanex’s quarterly debt covenant compliance (“Debt Covenant Leverage Ratio”) for its lenders was 2.4x as of July 31, 2025. The Debt Covenant Leverage Ratio calculation is defined in the Company’s Amendment No. 1 to its Second Amended and Restated Credit Agreement (“Credit Agreement”), which was filed with the SEC on June 12, 2024. In general, the main difference is that the Debt Covenant Leverage Ratio excludes real-estate leases that are considered “finance” leases under U.S. GAAP and is calculated on a proforma basis to include Adjusted EBITDA from the Tyman acquisition, $30 million of EBITDA for the synergy target related to the acquisition, less realized synergies, and only cash from domestic subsidiaries. Note that per the terms of the Credit Agreement, the quarterly Debt Covenant Leverage Ratio must be less than 3.75x through the fourth quarter of 2025 and less than 3.25x starting in the first fiscal quarter of 2026. The Debt Covenant Leverage Ratio would be 2.3x if calculated using the full $66.3 million cash and cash equivalents balance as of July 31, 2025, and adjusting for the $2.1 million in cash used to repurchase stock during the quarter.

Quanex’s liquidity improved to $337.7 million as of July 31, 2025, consisting of $66.3 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2029, less letters of credit outstanding.

Share Repurchases

Quanex’s Board authorized a $75 million share repurchase program in December of 2021. Repurchases under this program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements, and other relevant factors. The Company repurchased 100,000 shares of common stock for approximately $2.1 million at an average price of $20.54 per share during the three months ended July 31, 2025. As of July 31, 2025, approximately $33.6 million remained under the existing share repurchase authorization.

Outlook

Quanex is updating its guidance for fiscal 2025 based on year-to-date results, recent demand trends, an updated cost synergy realization tracking and timing model, conversations with its customers, and a realistic timeline to address operational issues in the window and door hardware business in Mexico. On a consolidated basis for fiscal 2025, the Company now estimates that it will generate net sales of approximately $1.82 billion, which Quanex expects will yield Adjusted EBITDA* of approximately $235 million.

Mr. Wilson commented, “We have a strong team with a proven track record and a breadth of products that are unmatched in the industry, which gives us confidence in our ability to execute on our long-term operational and financial objectives.”

*When Quanex provides expectations for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures is generally not available without unreasonable effort. Certain items required for such a reconciliation are outside of the Company’s control and/or cannot be reasonably predicted or estimated, such as the provision for income taxes related to net income.

Conference Call and Webcast Information

The Company has also scheduled a conference call for Friday, September 5, 2025 at 11:00 a.m. ET (10:00 a.m. CT) to discuss the release. A link to the live audio webcast will be available on Quanex’s website at http://www.quanex.com in the Investors section under Presentations & Events.

Participants can pre-register for the conference call using the following link:
https://register-conf.media-server.com/register/BI1e90103192034399a255d44d3a7eb162

Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, it is recommended that participants dial into the conference call ten minutes ahead of the scheduled start time. A replay will be available for a limited time on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.

About Quanex

Quanex is a global manufacturer with core capabilities and broad applications across various end markets. The Company currently collaborates and partners with leading OEMs to provide innovative solutions in the window, door, solar, refrigeration, custom mixing, building access and cabinetry markets.  Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.

Non-GAAP Terminology Definitions and Disclaimers

Adjusted Net Income (defined as net income further adjusted to exclude amortization of step-up for purchase price adjustments on inventory, asset impairment charges, transaction, advisory fees and reorganization costs, restructuring charges related to severance and disposal of software, amortization expense related to intangible assets, pension settlement refund and other net adjustments related to foreign currency transaction gain/loss and effective tax rates reflecting impacts of adjustments on a with and without basis) and Adjusted EPS are non-GAAP financial measures that Quanex believes provide a consistent basis for comparison between periods and more accurately reflects operational performance, as they are not influenced by certain income or expense items not affecting ongoing operations. EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net), Adjusted EBITDA and LTM Adjusted EBITDA (defined as EBITDA further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges and asset impairment charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making.  Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less cash and cash equivalents. The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating Quanex’s leverage. In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company’s credit agreement.

Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures. Quanex uses the Free Cash Flow metric to measure operational and cash management performance and assist with financial decision-making.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of the Company’s residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company’s financial and cash management performance.

Quanex believes that the presented non-GAAP measures provide a consistent basis for comparison between periods and will assist investors in understanding the Company’s financial performance when comparing results to other investment opportunities.  The presented non-GAAP measures may not be the same as those used by other companies. Quanex does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP.

Forward Looking Statements

Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the following: impacts from public health issues (including pandemics) on the economy and the demand for Quanex’s products, timing estimates or any other expectations related to the acquisition of Tyman, the Company’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex’s industry, and the Company’s future growth, including any guidance discussed in this press release. The statements and guidance set forth in this release are based on current expectations. Actual results or events may differ materially from this release. For a complete discussion of factors that may affect Quanex’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024, and the Company’s Quarterly Reports on Form 10-Q under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Any forward-looking statements in this press release are made as of the date hereof, and Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.