Quanex Building Products Announces Second Quarter 2025 Results and Reaffirms Full Year 2025 Guidance

Seasonal Uptick Unfolding as Expected

Volume Growth in European Fenestration Segment

Results Again Lifted by Contribution from Tyman Acquisition

Tyman Integration Ahead of Timeline

Cost Synergy Target Increased to ~$45 Million

Quanex Building Products Corporation (“Quanex” or the “Company”) announced its results for the three months ended April 30, 2025.

George Wilson, Chairman, President and Chief Executive Officer, commented, “Our results for the second quarter of 2025 came in as expected and reflected normal seasonality in our business. Revenue in March was approximately 6% higher than February and revenue in April was approximately 9% higher than March. It was also encouraging to see volume growth in our European Fenestration segment during the second quarter of 2025. We continue to be pleased with the integration of Tyman, and are now confident we will deliver approximately $45 million in cost synergies over time, compared to our original target of $30 million within the first two years post-acquisition. On a run-rate basis, we see a path to achieving the original $30 million cost synergy target by early fiscal 2026. We also took advantage of our low stock price during the second quarter and spent over $23 million repurchasing our shares.

“Overall, despite the challenging macroeconomic environment, we expect the seasonal uptick in demand we witnessed in the second quarter to continue through the summer, and we are confident in our ability to mitigate any potential margin impact related to tariffs. In addition, any unexpected weakness in demand in the second half of 2025 could be somewhat offset by the realization of cost synergies faster than originally planned. Our near-term priorities remain unchanged, which include staying focused on the Tyman integration, capturing synergies, and generating cash flow to repurchase our stock and pay down debt.   Longer-term, we continue to expect that we will benefit from the release of pent-up demand as consumer confidence improves.”  

Second Quarter Results Summary

Quanex reported net sales of $452.5 million during the three months ended April 30, 2025, which represents an increase of 70.0% compared to $266.2 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 declined by 1.4% for the second quarter of 2025, mainly due to lower volume in North America. The Company reported a decrease in net sales of 5.5% for the second quarter of 2025 in its North American Fenestration segment. In its North American Cabinet Components segment, Quanex reported a marginal increase in net sales for the second quarter of 2025. Excluding foreign exchange impact, net sales increased by 7.9% in its European Fenestration segment. In addition, Quanex reported net sales of $190.1 million related to the Tyman acquisition during the second quarter of 2025. (See Sales Analysis table for additional information)

The increase in net income and EBITDA for the three months ended April 30, 2025, was mostly related to the contribution from the Tyman acquisition combined with the realization of related cost synergies.  

Balance Sheet & Liquidity Update

As of April 30, 2025, the Company had total debt of $785.0 million and Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA decreased to 3.2x.   As of April 30, 2025, the Company’s LTM Net Income was $17.1 million and LTM Adjusted EBITDA was $223.5 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 2.7x as of April 30, 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 2.4x if calculated using the total cash and cash equivalents amount on the balance sheet as of April 30, 2024, and adjusting for the cash used to repurchase stock during the quarter.  

Quanex’s liquidity was $289.0 million as of April 30, 2025, consisting of $62.6 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 1,259,407 shares of common stock for approximately $23.5 million at an average price of $18.66 per share during the three months ended April 30, 2025. As of April 30, 2025, approximately $35.6 million remained under the existing share repurchase authorization.   

Outlook

Mr. Wilson stated, “Based on our results year-to-date, combined with our operational execution, cost synergy realization, recent demand trends, and conversations with our customers, we are once again reaffirming our guidance for fiscal 2025. On a consolidated basis for fiscal 2025, we continue to estimate that we will generate net sales of approximately $1.84 billion to $1.86 billion, which we expect will yield Adjusted EBITDA* of $270 million to $280 million.

“The finance and accounting teams continue to work with our external auditors on re-segmenting the business and our goal is to report in the new operating segments this year.”

*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.

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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, vinyl fencing, solar, refrigeration, custom mixing and cabinetry markets.  Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.

Contact:

Scott Zuehlke – Senior Vice President, Chief Financial Officer & Treasurer – scott.zuehlke@quanex.com – (713) 877-5327

Source: Quanex Building Products Corporation