Quanex Building Products — Third Quarter 2026 Earnings Summary

Financial Performance

• Net sales for the three months ended July 31, 2026, were $501.8 million, a 1.3% increase from $495.3 million in the same period in 2025.
• Net sales for the nine months ended July 31, 2026, were $1,373.3 million, up from $1,347.8 million in the prior year period.
• Gross margin for the third quarter was $141.5 million (28.2%), compared to $138.0 million (27.9%) in 2025.
• Gross margin for the nine months was $357.8 million (26.1%), compared to $361.7 million (26.8%) in 2025.
• Operating income for the third quarter was $46.5 million, a significant improvement from an operating loss of $270.8 million in 2025.
• Operating income for the nine months was $68.1 million, compared to an operating loss of $236.9 million in 2025.
• Net income for the third quarter was $26.5 million, compared to a net loss of $276.0 million in 2025.
• Net income for the nine months was $25.8 million, compared to a net loss of $270.4 million in 2025.
• Diluted EPS for the third quarter was $0.58, compared to $(6.04) in 2025.
• Diluted EPS for the nine months was $0.57, compared to $(5.83) in 2025.
• Adjusted Net Income for the third quarter was $36.0 million, up from $31.6 million in 2025.
• Adjusted Net Income for the nine months was $47.0 million, down from $68.4 million in 2025.
• Adjusted Diluted EPS for the third quarter was $0.79, up from $0.69 in 2025.
• Adjusted Diluted EPS for the nine months was $1.03, down from $1.47 in 2025.
• Adjusted EBITDA for the third quarter was $72.7 million (14.5% margin), compared to $70.3 million (14.2% margin) in 2025.
• Adjusted EBITDA for the nine months was $144.3 million (10.5% margin), compared to $172.0 million (12.8% margin) in 2025.
• Cash provided by operating activities for the third quarter was $58.6 million, down from $60.7 million in 2025.
• Cash provided by operating activities for the nine months was $57.3 million, down from $76.6 million in 2025.
• Free Cash Flow for the third quarter was $47.8 million, up from $46.2 million in 2025.
• Free Cash Flow for the nine months was $24.2 million, down from $35.6 million in 2025.
• Total debt as of July 31, 2026, was $672.2 million.
• Net Debt to LTM Adjusted EBITDA leverage ratio was 2.8x as of July 31, 2026.
• Liquidity increased 10.5% to $363.1 million as of July 31, 2026.

Guidance and Future Outlook

• Management intends to continue prioritizing debt repayment and opportunistically repurchasing shares in the fourth quarter of 2026 as cash is generated.
• The Company plans to identify operational efficiencies and commercial synergies to benefit when consumer confidence and demand improve.
• Inflationary pressures related to macroeconomic concerns and the ongoing conflict in the Middle East continue to impact the business, though the initial rate and magnitude have somewhat subsided.

Business Segments and Product Lines

• Hardware Solutions segment net sales declined 2.7% in the third quarter of 2026, driven by lower volumes and IEEPA tariff reimbursements, partially offset by favorable pricing.
• Extruded Solutions segment net sales grew 2.8% in the third quarter of 2026, as favorable pricing more than offset lower volumes.
• Custom Solutions segment net sales increased 8.5% in the third quarter of 2026, driven by increased volume and improved pricing.
• Hardware Solutions Adjusted EBITDA margin was 12.2% in the third quarter of 2026, compared to 10.9% in 2025.
• Extruded Solutions Adjusted EBITDA margin was 19.9% in the third quarter of 2026, compared to 21.3% in 2025.
• Custom Solutions Adjusted EBITDA margin was 10.8% in the third quarter of 2026, compared to 12.6% in 2025.
• The third quarter 2025 results included a $302.3 million non-cash goodwill impairment charge.

Market and Competitive Landscape

• Volumes continued to track normal seasonality patterns during the third quarter of 2026.
• Net sales growth was driven by favorable pricing impacts, partially offset by IEEPA tariff reimbursements to customers.
• The Company partners with leading OEMs in window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets.

Risks and Challenges

• Inflationary pressures related to macroeconomic concerns and the ongoing conflict in the Middle East continue to impact the business.
• The business faces price versus cost imbalances that previously impacted margins, though progress has been made in addressing them.
• Foreign currency exchange rates impacted revenue, with unfavorable impacts in the third quarter for Hardware and Extruded Solutions segments.

Management Commentary and Tone

• George Wilson, Chairman, President and CEO, stated that the Company made meaningful progress addressing the price versus cost imbalance that impacted margins in the second quarter of 2026.
• Management highlighted that working capital management, coupled with seasonal volume upticks, enabled debt repayment and share buybacks.
• The tone reflects confidence in the ability to generate cash for debt repayment and share repurchases while identifying future operational efficiencies.

Other Key Points

• The Company repaid $42.25 million of debt during the third quarter of 2026.
• The Board authorized a $75 million share repurchase program in December 2021.
• During the third quarter of 2026, the Company repurchased 99,786 shares for approximately $1.7 million at an average price of $17.10 per share.
• As of July 31, 2026, approximately $28.7 million remained available under the share repurchase authorization.
• The Company paid cash dividends of $0.08 per share in the third quarter of 2026.
• A conference call to discuss results is scheduled for September 4, 2026, at 11:00 a.m. ET.