NX

Net Sales GrowthVolumes Continue to Track Normal Seasonality PatternsMargin Expansion Realized in Hardware Solutions Segment and on Consolidated Basis$42.25 Million of Debt Repaid in 3Q26Continued Progress and Execution on Working Capital Management HOUSTON, Sept. 03, 2026 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2026. 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, “Volumes continued to track normal seasonality patterns during the third quarter of 2026, and we made meaningful progress addressing the price versus cost imbalance that impacted our margins in the second quarter of 2026. Inflationary pressures related to macroeconomic concerns and the ongoing conflict in the Middle East are still having an impact, but the initial rate and magnitude of these pressures have somewhat subsided. “We stayed focused on managing our working capital during the third quarter of 2026, which when coupled with the seasonal uptick in volumes, enabled us to repay $42.25 million of debt and buy back some of our shares. We will continue to prioritize repaying debt and opportunistically repurchasing our shares as we generate cash in the fourth quarter of 2026. In addition, we will continue to identify operational efficiencies and commercial synergies that we believe will benefit us when consumer confidence and demand improve.” Third Quarter 2026 Results Summary Quanex reported net sales of $501.8 million during the three months ended July 31, 2026, which represents an increase of 1.3% compared to $495.3 million for the same period in 2025, mainly due to favorable impacts from pricing, partially offset by the impact of IEEPA tariff reimbursements to customers. The Hardware Solutions segments reported a 2.7% decline in net sales for the third quarter of 2026, driven by lower volumes and the impact of IEEPA tariff reimbursements to customers, which were somewhat offset by favorable impacts from pricing. The Extruded Solutions segments reported net sales growth of 2.8% for the third quarter of 2026, as lower volumes were more than offset by favorable impacts from pricing. Quanex reported an increase of 8.5% in net sales for the third quarter of 2026 in its Custom Solutions segment, largely due to increased volume and improved pricing. (See Sales Analysis table for additional information) On a consolidated basis, the increase in reported earnings for the third quarter of 2026 compared to the third quarter of 2025 was mainly due to improved pricing, lower depreciation and amortization expense and lower interest expense. Results for the third quarter of 2025 were also impacted by a $302.3 million non-cash goodwill impairment. Balance Sheet & Liquidity Update As of July 31, 2026, the Company had total debt of $672.2 million and Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA was 2.8x. As of July 31, 2026, Quanex reported LTM Net Income of $45.4 million and LTM Adjusted EBITDA of $215.2 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 Company’s liquidity increased by 10.5% to $363.1 million as of July 31, 2026, consisting of $62.1 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 99,786 shares of common stock for approximately $1.7 million at an average price of $17.10 per share during the three months ended July 31, 2026. As of July 31, 2026, approximately $28.7 million remained under the existing share repurchase authorization. Conference Call and Webcast Information The Company has scheduled a conference call for Friday, September 4, 2026, 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/BIac7900426be941999342c141e5049229 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 partners with leading OEMs to provide innovative solutions in 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 reflect 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.  These measures allow management and investors to evaluate operational performance and trends without the impact of certain non-cash charges, acquisition-related costs, and other items that may vary significantly from period to period and may not be reflective of Quanex’s core operating results. The presented non-GAAP measures may not be the same as those used by other companies. The Company 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 This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.   Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” “anticipate,” “intend,” “plan,” “project,” “seek,” “would,” “may,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the following: Quanex’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to the Company’s industry, expectations regarding the recovery of price versus cost imbalances, anticipated debt repayment and share repurchase activity, expected operational efficiencies and synergies 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 those expressed or implied in these forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. For a complete discussion of factors that may affect the Company’s future performance, please refer to Quanex’s Annual Report on Form 10-K for the fiscal year ended October 31, 2025, 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 the Company undertakes no obligation to update or revise any forward-looking statements, whether written or oral, to reflect new information, developments or events.

Quanex Building Products (NX) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.68 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +16.18%. A quarter ago, it was expected that this housing materials maker would post earnings of $0.22 per share when it actually produced earnings of $0.25, delivering a surprise of +13.64%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Quanex, which belongs to the Zacks Building Products - Miscellaneous industry, posted revenues of $501.85 million for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 0.77%. This compares to year-ago revenues of $495.27 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Quanex shares have added about 23.1% since the beginning of the year versus the S&P 500's gain of 12%. While Quanex has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Quanex was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.74 on $491.4 million in revenues for the coming quarter and $1.66 on $1.86 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Miscellaneous is currently in the bottom 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Worthington Enterprises (WOR), another stock in the broader Zacks Construction sector, has yet to report results for the quarter ended August 2026. The results are expected to be released on September 22. This metal manufacturer is expected to post quarterly earnings of $0.76 per share in its upcoming report, which represents a year-over-year change of +2.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Worthington Enterprises' revenues are expected to be $332.1 million, up 9.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quanex Building Products Corporation (NX) : Free Stock Analysis Report Worthington Enterprises, Inc. (WOR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Matrix Service (MTRX) came out with quarterly earnings of $0.16 per share, missing the Zacks Consensus Estimate of $0.17 per share. This compares to a loss of $0.28 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -5.88%. A quarter ago, it was expected that this energy services company would post earnings of $0.07 per share when it actually produced earnings of $0.13, delivering a surprise of +85.71%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Matrix Service, which belongs to the Zacks Engineering - R and D Services industry, posted revenues of $244.53 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.02%. This compares to year-ago revenues of $216.38 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Matrix Service shares have lost about 8.6% since the beginning of the year versus the S&P 500's gain of 11.5%. While Matrix Service has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Matrix Service was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.18 on $233.91 million in revenues for the coming quarter and $0.70 on $948.11 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Engineering - R and D Services is currently in the top 42% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Quanex Building Products (NX), another stock in the broader Zacks Construction sector, has yet to report results for the quarter ended July 2026. The results are expected to be released on September 3. This housing materials maker is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of -1.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Quanex Building Products' revenues are expected to be $498 million, up 0.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Matrix Service Company (MTRX) : Free Stock Analysis Report Quanex Building Products Corporation (NX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Building products company Quanex (NYSE:NX) will be announcing earnings results this Thursday afternoon. Here’s what you need to know. Quanex beat analysts’ revenue expectations last quarter, reporting revenues of $462.4 million, up 2.2% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates. Is Quanex a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Quanex’s revenue to be flat year on year, slowing from the 76.7% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Quanex has a history of exceeding Wall Street’s expectations. Looking at Quanex’s peers in the home construction materials segment, some have already reported their Q2 results, giving us a hint as to what we can expect. JELD-WEN posted flat year-on-year revenue, beating analysts’ expectations by 3.2%, and Owens Corning reported flat revenue, topping estimates by 4%. JELD-WEN traded up 25.7% following the results while Owens Corning was also up 3.5%. Read our full analysis of JELD-WEN’s results here and Owens Corning’s results here. In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the home construction materials stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 6.6% on average over the last month. Quanex is down 3.8% during the same time and is heading into earnings with an average analyst price target of $27.25 (compared to the current share price of $18.50). ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.

Construction Partners (ROAD) came out with quarterly earnings of $1.08 per share, beating the Zacks Consensus Estimate of $1.06 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.89%. A quarter ago, it was expected that this road and highway construction company would post a loss of $0.05 per share when it actually produced earnings of $0.18, delivering a surprise of +460%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Construction Partners, which belongs to the Zacks Building Products - Miscellaneous industry, posted revenues of $999.42 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.60%. This compares to year-ago revenues of $779.28 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Construction Partners shares have lost about 7.7% since the beginning of the year versus the S&P 500's gain of 12.6%. While Construction Partners has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Construction Partners was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.36 on $1.08 billion in revenues for the coming quarter and $2.91 on $3.6 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Miscellaneous is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Quanex Building Products (NX), has yet to report results for the quarter ended July 2026. This housing materials maker is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of -1.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Quanex Building Products' revenues are expected to be $498 million, up 0.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Construction Partners, Inc. (ROAD) : Free Stock Analysis Report Quanex Building Products Corporation (NX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Installed Building Products (IBP) came out with quarterly earnings of $2.91 per share, beating the Zacks Consensus Estimate of $2.57 per share. This compares to earnings of $2.95 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +13.23%. A quarter ago, it was expected that this residential insulation installer would post earnings of $2.09 per share when it actually produced earnings of $1.79, delivering a surprise of -14.35%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Installed Building Products, which belongs to the Zacks Building Products - Miscellaneous industry, posted revenues of $777.8 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.05%. This compares to year-ago revenues of $760.3 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Installed Building Products shares have lost about 6.9% since the beginning of the year versus the S&P 500's gain of 12.8%. While Installed Building Products has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Installed Building Products was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.96 on $771.62 million in revenues for the coming quarter and $10.22 on $2.91 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Building Products - Miscellaneous is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Quanex Building Products (NX), has yet to report results for the quarter ended July 2026. This housing materials maker is expected to post quarterly earnings of $0.68 per share in its upcoming report, which represents a year-over-year change of -1.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Quanex Building Products' revenues are expected to be $498 million, up 0.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Installed Building Products, Inc. (IBP) : Free Stock Analysis Report Quanex Building Products Corporation (NX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $462.4 million in Q2 2026, up 2.2% from $452.5 million in Q2 2025. Net Income: $3.4 million or $0.07 per diluted share in Q2 2026, down from $20.5 million or $0.44 per diluted share in Q2 2025. Adjusted Net Income: $11.3 million or $0.25 per diluted share in Q2 2026, down from $29.1 million or $0.63 per diluted share in Q2 2025. Adjusted EBITDA: $44.2 million in Q2 2026, down from $63.1 million in Q2 2025. Gross Margin: Declined 350 basis points year-over-year in Q2 2026. Hardware Solutions Revenue: $203 million in Q2 2026, slightly up from $202.9 million in Q2 2025. Extruded Solutions Revenue: $165 million in Q2 2026, slightly up from $164 million in Q2 2025. Custom Solutions Revenue: $103.9 million in Q2 2026, up 6.6% from the prior year. Cash Flow from Operations: $18.9 million in Q2 2026, down from $28.5 million in Q2 2025. Free Cash Flow: $7.9 million in Q2 2026, down from $13.6 million in Q2 2025. Liquidity: $328.6 million as of April 30, 2026. Leverage Ratio: Net debt to last 12 months adjusted EBITDA was 3.1 times as of April 30, 2026. Warning! GuruFocus has detected 5 Warning Signs with NX. Is NX fairly valued? Test your thesis with our free DCF calculator. Release Date: June 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Quanex Building Products Corp (NYSE:NX) reported a 2.2% increase in net sales for Q2 2026, driven by favorable pricing, tariff pass-throughs, and foreign exchange translation. The company anticipates sequential volume growth in Q3 due to seasonal demand patterns. Quanex is implementing targeted price increases to mitigate cost pressures, ranging from mid-single digit to low teens percentages. The Custom Solutions segment saw a 6.6% revenue growth, with volumes up by approximately 1% and pricing increased by 4.5%. Quanex's liquidity was strong at $328.6 million as of April 30, 2026, with a plan to reduce net leverage ratio by year-end. Gross margins declined by 350 basis points year-over-year in Q2, primarily due to sharp increases in raw materials and logistics costs. Net income for Q2 2026 was significantly lower at $3.4 million compared to $20.5 million in the same period of 2025. Adjusted EBITDA decreased to $44.2 million from $63.1 million year-over-year, impacted by reduced operating leverage and inflationary pressures. The Hardware Solutions segment experienced a notable decline in adjusted EBITDA, from $27 million in Q2 2025 to $5.2 million in Q2 2026. Quanex is facing ongoing challenges from inflation fatigue, affordability issues, and geopolitical uncertainties, impacting consumer confidence and market visibility. Q: Can you elaborate on the index pass-through timing in North America and its impact on various segments? How is it embedded in the Q3 outlook? A: George Wilson, CEO, explained that index pricing mechanisms are reviewed quarterly. Inflation within a quarter can trigger price adjustments, but there can be a lag of up to 90 days. For Q3 and Q4, they assume stable pricing without additional inflation. However, due to geopolitical uncertainties, visibility is limited, and they are in a "chase mode." Q: Were there any market share shifts in your larger product categories, or were volumes aligned with the market? A: George Wilson noted some shifts in the hardware section, with gains and pressures depending on the product line. They benefited from strategy changes among customers, particularly in the Custom Solutions segment with wood products. Overall, the supply chain is stable, and there hasn't been much disruption. Q: Should we expect similar cash generation in the second half of the year as last year, or will inflation impact that? A: George Wilson expects most cash generation in the second half, as usual. The extent will depend on inflation rates and volume increases due to seasonality. They are also improving inventory levels, which should aid cash flow. Q: How do you plan to balance debt repayment and share repurchases in the second half? A: George Wilson stated that their priority is to pay down debt, as it has a more significant impact on their investor base than repurchasing shares. They believe their stock is undervalued but will focus on debt reduction first. Q: Can you discuss the impact of increased transportation costs and how it might trend in Q3? A: George Wilson highlighted that transportation costs have risen due to fuel surcharges and logistical challenges, especially for international shipments. They are implementing surcharges to offset these costs, but it's a catch-up process. The situation remains fluid, particularly with geopolitical tensions. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Friday, June 5, 2026 at 11 a.m. ET President & Chief Executive Officer — George L. Wilson Senior Vice President, Chief Financial Officer & Treasurer — Scott Michael Zuehlke George L. Wilson: I will now turn the call over to George for his prepared remarks. Thanks, Scott, and good morning to everyone on the call. In my commentary, I will give our perspective on the current macroeconomic environment, provide an overview of our results, highlight some inflationary challenges and the actions being taken by Quanex, and then discuss go forward priorities. From a macroeconomic perspective, housing demand in North America and Europe is showing early signs of stabilization, but the recovery will likely proceed gradually. Progress remains constrained by persistently weak consumer confidence, which remains below historical norms. Inflation fatigue, affordability challenges, and ongoing geopolitical uncertainty are outweighing an otherwise strong labor market. In the US, mortgage rates above 6% further dampen activity while the lock in effect where homeowners are reluctant to relinquish previously secured low rates continues to limit mobility. Even as rising home equity reflects higher property values. Given these ongoing challenges, we do not expect housing markets to rebound sharply in the near term. We instead anticipate a steady recovery over the medium to longer term and this will depend on, 1, an improvement in affordability, 2, a decrease or stabilization of interest rates, and 3, improvement in consumer confidence influenced by a period of geopolitical stability. I will now provide some commentary on our results for the second quarter of 26. Despite the headwinds I just mentioned, demand for our products came in largely as expected and we performed well from an operational standpoint. On a consolidated basis, revenue increased modestly year over year. As pricing actions, tariff related pass throughs, and favorable foreign exchange more than offset lower volumes. Looking ahead to Q3, we expect seasonal demand patterns to continue, which should mean sequential volume growth. Notably, volume softened following Memorial Day last year And although we realized it is still early, we have not observed similar trends to date this year. We will remain vigilant in this regard closely monitoring order patterns to respond quickly to any changes in demand. Gross margins declined 350-basis-points year over year in Q2, primarily due to sharp increases in raw materials and logistics costs. Our hardware solutions segment was impacted the most by inflationary pressures during Q2 of this year due to the legacy nature of the make-to-stock business model for the window and door hardware product line and the fact that inventory levels are highest in this segment. Although our North American index pricing mechanisms are designed to adjust for input cost fluctuations, quarterly timing of these adjustments, varying by commodity, customer, and product line can create temporary earnings pressures during periods of rapid inflation like those we have seen in the past few months. In our European and international markets where index pricing is less prevalent, price adjustments rely more on customer negotiations and announced increases. Often with advanced notice periods that further extend timing impacts. Cost pressures on raw materials were broad based across segments during Q2 of this year. The Hardware Solutions segment was most affected by cost increases for aluminum, zinc, stainless steel, and plastic resins, The Extruded Solutions segment was most impacted by cost increases for butyl rubber silicone compounds, carbon black, desiccants, and PVC resins, and our custom solutions segment was most impacted by cost increases for EPDM, Carbon Black, oils, aluminum, plastic resins, and certain hardwoods. Rising costs in packaging particularly plastic and paper, as well as increases in freight and logistics costs impacted margins across all segments and product lines. To mitigate these pressures, we have implemented and will continue to implement targeted price increases ranging from mid-single-digit to low teens percentages to be phased in throughout Q3 and tailored by product line. Going into Q3, our operational priorities will be on closing the price cap cost gap across all product lines, accelerating the transition from make-to-stock to make-to-order for the window and door hardware business, executing on our 20 initiative in the North American window and door hardware business, improving working capital, and then generating more free cash flow. We believe that by executing on these actions, we will be well positioned to deliver shareholder value as market conditions improve. Scott Michael Zuehlke: I will now turn the call over to Scott who will discuss our financial results in more detail. Thanks, George. On a consolidated basis, we reported net sales of $462 million during the second quarter of 26, which represents an increase of 2.2% compared to $453 million for the same period of 2025. The increase was mainly due to favorable impacts from pricing tariff pass throughs and foreign exchange translation. We estimate that volumes were down about 3% Pricing was up approximately 1.5%. The tariff pass through impact was about 1%. And foreign exchange translation was a benefit of about 2.5%. Reported net income of $3.4 million or $0.07 per diluted share during the 3 months ended 04/30/2026, compared to net income of $20.5 million or $0.44 per diluted share during 3 months ended 04/30/2025. The effective tax rate in the second quarter of 26 excluding discrete items, approximately 24%, which is what was expected. On an adjusted basis, we reported net income of $11.3 million or $0.25 per diluted share during the second quarter of 26 compared to net income of $29.1 million or $0.63 per diluted share during the second quarter of 25. The adjustments being made to net income are primarily for expenses related to a plant closure or relocation, transaction and advisory fees, reorganizational costs, amortization expense related to intangible assets, and foreign currency impacts. On an adjusted basis, EBITDA for the quarter was $44.2 million compared to $63.1 million during the same period of last year. The decrease in adjusted earnings for the second quarter of 26 compared to the second quarter of 25 was mainly due reduced operating leverage from lower volumes related to ongoing macroeconomic uncertainty combined with weak consumer confidence tariff related costs, inflationary pressures. More specifically, due to the ongoing war in The Middle East and other macroeconomic factors, we realized a significant increase in transportation and raw material costs during the quarter. Now for results by operating segment. We generated net sales of $2.00 $3 million in our Hardware Solutions segment for the second quarter of 26, a slight increase compared to $203 million in the second quarter of 25. We estimate that volumes were down approximately 5% Pricing was marginally up by about 0.5% in this segment. The tariff pass throughs impact was about 2.5%. Foreign exchange translation was a benefit of about 2%. Adjusted EBITDA was $5.2 million in this segment for the second quarter of 20 compared to $27 million in the same period of 2025. This decrease was largely due to reduced operating leverage from lower volumes combined with impacts from tariff changes and inflationary pressure on materials, freight, and labor costs. All of which meaningfully impacted gross margin. Our Extruded Solutions segment generated revenue of $165 million in Q2 of this year a slight increase compared to $164 million in Q2 of last year. We estimate that volumes were down approximately 4% year-over-year in this segment for the quarter with pricing up by approximately 1%, and a positive foreign exchange translation impact of about 3.5%. Adjusted EBITDA declined slightly to $30.4 million in this segment for the quarter versus $30.7 million during the same period of last year. Mainly due to decreased operating leverage related to lower volumes and general inflationary pressure. We reported net sales of $104 million in our Custom Solutions segment saw a revenue decline of 6.6% compared to the prior year. For the quarter, we estimate that volumes were up by approximately 1%, pricing increased by approximately 4.5%, and foreign exchange translation coupled with the pass through of tariffs had a benefit of approximately 1%. Adjusted EBITDA declined to $11 million from $13 million in this segment for the quarter, mostly due to inflationary pressures we have already discussed. Moving on to cash flow and the balance sheet. Cash provided by operating activities was $18.9 million for the second quarter of 26, which compares to 28.5 million for the second quarter of 25. Free cash flow was $7.9 million in Q2 of 26, compared to $13.6 million in Q2 of 25. We expected to be a net borrower during the second quarter due to the longer cash conversion cycle of the legacy Tyman business, but continued execution on managing working capital enabled us to avoid being a net borrower for the quarter. For context, we were a net borrower of almost $19 million in Q2 of last year. Our liquidity was 329 million as of 04/30/2026, consisting of 63.7 million in cash on hand plus availability under our senior secured revolving credit facility due 2029. Less letters of credit outstanding. As of 04/30/2026, our leverage ratio of net debt to last 12 months adjusted EBITDA was 3.1x. We expected our leverage ratio to increase in Q2 but we continue to believe we will exit 2026 with a lower net leverage ratio as we generate cash and repay debt in the second half. Our long term view continues to be favorable as the underlying fundamentals for the residential housing market remain positive. We entered fiscal 26 with a cautious outlook, due to the ongoing macroeconomic challenges and remain cautious considering the current geopolitical events. We continue to monitor the situation in the Middle East is contributing to a significant impact on the price of raw materials energy, and transportation costs. During our last earnings call in March, we mentioned that fiscal 26 could be somewhat flat compared to fiscal 25 with puts and takes. But that the first half of 26 may be more challenged than the first half of 25. Implying a somewhat improved second half year over year. Since that time, inflationary pressures have increased and the broader uncertainty related to geopolitical developments, consumer confidence, interest rates, and tariffs has reduced visibility into the balance of the year. Accordingly, we are not reaffirming our previously issued guidance for fiscal 26 at this time. However, we will provide our expectations for the current quarter. Please use the following cadence for the third quarter of 26 versus the third quarter of 25. On a consolidated basis, we expect revenue to be flat to up 1%, and adjusted EBITDA margin is expected to be flat to up 25 basis points. In addition, an estimated tax rate of approximately 24% should be reasonable for the third quarter of 26. As always, we will stay focused on the things that we can control with near term emphasis on generating cash to reduce debt while repurchasing our stock and identifying further synergies that can benefit us when the economic conditions improve. Operator: Operator, we are now ready for questions. Thank you. Question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. 1 moment for questions. And our first question comes from Steven Ramsey with Thompson Research Group. Analyst (Steven Ramsey): You may proceed. Hi. Good morning. Maybe wanted to start with if you could elaborate a little bit further on the index pass through timing in North America, how it impacts various segments and maybe how it is embedded in the Q3 outlook and if more of the benefits are after the third quarter? George L. Wilson: Yeah. So as we mentioned, as price increases come in, and I am going to talk specifically about the ones that have material index, automatic indexes the raw materials that are on that index pricing mechanisms. We tend to review those on a quarterly basis. So you have got any inflation that occurs within that quarter will either trigger up or down, and in this case, up, an index. But until those quarterly review points, we tend to either get the benefit or, in this case, take the brunt of any inflation. And then when it triggers, obviously, the pricing goes through at that point in time. So you could have anywhere from a 90 to maybe a 2-day lag depending on when in the cycle the-- the price increases go. That tends to be different based on the commodity and the customer contract. Those tend to be negotiated. As it relates to our Q3 and Q4 outlook, what we are assuming right now is that the pricing that we are at today remains somewhat stable and that those price increases that have triggered were gone in. So we are assuming no more additional inflation, or decrease inflation. And the challenge in what in what we have tried to say in our commentary is that lack of visibility on what is happening from a macro perspective and in the geopolitical influences We just have no visibility. So we are in a chase mode here. And that is going to continue. So our forecast assumes no price increases, but, your forecaster at this point is probably as accurate as anyone's because no 1 knows. Analyst (Steven Ramsey): Okay. that is helpful. And then you discussed the volumes in total, and by segment in the quarter. Do you feel like there was any market share shift in any of your larger product categories or do you feel like volumes were overall aligned with the market? George L. Wilson: I think that, you know, the puts and takes in the hardware section. You know, where we have gained some share and then we have had pressure on share. It depends on the product line. I think the area where we benefited is we have taken some share or there is been some strategy changes amongst our customers in outsourcing additional materials on the wood, the custom solutions segment. Specifically within the wood product lines where we have actually been a winner. Otherwise, I would say that the supply chain is relatively stabilized, and there is not a lot of people out in today's world really looking to rattle their supply chain because of the risks and the ability to supply. So I think you tend to see the supply base kind of retrenched and entrenched in, and, that is what we have seen to this point. Analyst (Steven Ramsey): Okay. Sounds good. And last quick 1 for me. Last year, we saw fourth quarter EBITDA margin edge up a bit over the third quarter. Is that directionally the way to think about fourth quarter EBITDA margin? Scott Michael Zuehlke: Yes. I think right now, that is a fair assumption. Mainly because these price increases that are stepping in during the third quarter, we should get the full benefit in the fourth quarter. George L. Wilson: And the other thing to add to that, as I mentioned in my commentary, you know, last year was a little bit of an aberration that in the Q3 volume actually kind of flattened out, which was not normal seasonality. Typically, we see, Q3 ramping up and then Q4 being our strongest volume month. So Q3 last year was a little flat, and then Q4 started to bounce up. We would if we see normal seasonality, we would expect margins to improve just because of the leverage aspect of some of our business. Volumes will drive profitability. Analyst (Steven Ramsey): Okay. Thanks for the color, guys. Yep. Thank you. Operator: Thank you. Our next question comes from Kevin Gainey with Thompson Davis and Company. Analyst (Kevin Gainey): You may proceed. Hi, George Scott. it is Kevin on for Adam. Yep. Good morning. Good morning. Scott Michael Zuehlke: Maybe if we could talk on status quo. Last year, in the back half, you generated about $100 million? Should we expect maybe that capability in this second half or is inflation going to have an sizable impact to that? George L. Wilson: We definitely expect to generate most of our cash in the second half of this year. that is no different than any other year. To the extent and the magnitude of the cash flow, that will depend on several things. 1 of which is the rate of inflation that we have seen. And then obviously, we had-- you need to expect volumes to increase due to the seasonality of our business. But the other thing that we are doing that will help cash flow is and we saw that in the in the at the end of the second quarter is, we are making a meaningful improvement in the inventory levels coming down. We expect that to continue, which should help cash flow as well. Analyst (Kevin Gainey): Appreciate the color there. And then you mentioned in the release paying down debt and opportunistically repurchase share repurchase shares in the second half. Do you expect the toggle between the 2 and then how attractive are buybacks at the current levels in your models? George L. Wilson: So I think you can assume that our priority will absolutely be to pay down debt. We will evaluate the price. We are obviously believe our stock is trading at a discount, and we will continue to look at it. But the impact we have the math and the impact for us on buying or paying down debt at this point is more influential for our investor base than repurchasing shares. So that is the prioritization of that for us. I think you can assume the pay down of debt will come first. Analyst (Kevin Gainey): Thanks for the questions. Guys. I will hop back in the queue. Thank you. Operator: Thank you. Our next question comes from Julio Romero with Sidoti and Company. Analyst (Julio Romero): You may proceed. Thanks. Hey. Good morning, George and Scott. Good morning. Scott Michael Zuehlke: The release and your comments, good morning, also called out the increase in transportation costs in the quarter. Alongside the increased material costs. Can you maybe put a little finer point on the impact of that increase in the quarter? And if that is related to higher freight rates or surcharge fuel surcharges or expedited freight? And then how does that trend in the third quarter? In your view? George L. Wilson: Yeah. We have not given clarity on breaking that out from a dollar amount, but I can generally speak. it is impacted us in 2 ways. Obviously, the fuel cost and the cost of energy. I mean, almost every company has levied surcharges or fuel surcharges to offset the ramp up specifically after, you know, the war in the Middle East started. So that has taken a pretty immediate and rather rapid toll. And we are doing the same to try to offset it, but it is always a catch up. And then secondly, especially on our international, you know, we ship products to all over the world. And whether that is from The US, whether it is from The UK, or whether it is from Italy. And depending on the location. So for the products that go to our warehouse in Dubai and service the GCC region, Obviously, getting product through the Straits of Hormuz, you know, is not feasible at this point. So you have to create different logistics chains that significantly more expensive, increases the time to get and impact the ability to ensure and protect those shipments. So it is impacted us in 2 different ways. Analyst (Julio Romero): Understood. Yeah. You also recently, appointed a new president of hardware solutions in April. Can you maybe discuss what his more immediate priorities are for the Hardware Solutions segment? Where on that priority list is the that transition you mentioned from the made to stock product lines to the made to order product lines? And then, you know, where his longer term focus for the segment is. George L. Wilson: No. I appreciate the question, and it gives me the opportunity, first and foremost, to thank Bob Daniels who will be retiring at the end of the year. Bob's been with Quanex for a long time, and had announced his intention to retire. Even at the point when we purchased Tyman. And so this was a planned upon move. And then adding Chad Collins to that position. You know, we felt like it continued to you know, strengthen the areas that we felt needed to be strengthened. Not only is he a phenomenal businessman and can add value to the entirety of Quanex. But his background in looking at how we go to market and how we engineer products, very much the focus on an 80/20 principle, to streamline and really optimize the cost footprint of our organization, identifying, you know, what SKUs actually generate revenue and making sure that we are focused on doing those right things. You know, we were very excited to get him. he is already been able to come in and identify opportunities, which we kind of highlighted, and it is full systems go. So I think the future is bright. for that group and look forward to being able to talk more about what he is doing in those areas going forward. So he came into Quanex and has hit the ground running. Analyst (Julio Romero): Excellent. Last 1 for me here is, you know, for George. On the index pricing, kind of a broader strategic question, Are there longer term opportunities or thoughts on improving or changing the terms on the contractual mechanisms over time, whether it be with the duration of the lag or how much the underlying material cost has to change before being triggered? We would just love to hear your high level thoughts on that topic there, George. George L. Wilson: Yeah. it is a great question, Julio. And so I would say every contract in today's world is being reviewed to say, is it still, you know, adequate, still doing what it is meant to do and, have things shifted, where the contract needs to change. So, yes, we will evaluate each and every 1 of them. I think it very much depends on the product line. Our competitive positioning within that segment. So rather vague answer for you, Julio, and for that, I am sorry, but the answer is yes. But it is very dependent and situational based. But the world is different today, and I think that is us and every other company in the world are looking at everything with a new set of lenses, and, we will continue to evaluate ways to create win-win solutions for both us and for our customers. Analyst (Julio Romero): Thanks. I appreciate the thoughts there. That is helpful. I will pass it on. Thank you. Operator: Our next question comes from Reuben Garner with The Benchmark Company. Analyst (Reuben Garner): May proceed. Hi. Good morning, George and Scott. This is John on for Reuben. Good morning. Good morning. Hi. George L. Wilson: So a pretty thorough Q and A so far today. I just have 1 quick 1 left for me. I know last quarter, we had talked about how you were seeing some opportunities for increased sales and volumes in custom solutions, especially with reshoring and near shoring trends? Just now that we are a little bit further out from the tariff decisions and maybe a little bit more clarity on how those refunds are going, I understand a lot of it comes-- it is a long tail as far as the decisions that have to be made on how your customers are manufacturing elsewhere. But are you seeing any shift in kind of strategy or maybe the long term decisions to even move more manufacturing back closer to The US to your operations yet? So I think the answer to that would be it depends on the customer, and their strategy. You know, with the custom or the kitchen cabinet and the bathroom cabinet markets, you know, there is there is continued consolidation in that area. I think there will be a pause to see, you know, where the merger, of 2 of the big players you know, what their go-forward strategy will be looking like. But the other customers in that market, we have seen some areas where there is insourcing and as you can see in our numbers and what we called out, we had in what is a relatively soft or even a down market for the cabinets. We grew we grew volumes year over year despite that fact. So it is it is obvious we have taken some share and have been able to successfully, you know, sell our value proposition to those customers, and I think our focus will be to continue to do that. And I feel good about what that product line is doing for us, and, you know, we will continue to push and try to optimize that in every way we can. But I feel good about what the team in the wood components is doing. Analyst (Reuben Garner): Alright. I appreciate the color, and good luck in the quarter ahead. Thank you. Thanks. Thanks. Operator: Thank you. I would now like to turn the call back over to George L. Wilson for any closing remarks. George L. Wilson: I would like to thank you all for joining the call today, and we look forward to providing an update in our call in September. Thank you very much. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. Before you buy stock in Quanex Building Products, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Quanex Building Products wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,847!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,342,065!* That performance is why people listen. 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Quanex (NX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool