Quanex Building Products CORP

1. Nature of Operations, Basis of Presentation and Significant Accounting Policies

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, which manufactures window and door hardware and screens; (2) Extruded Solutions, which manufactures insulating glass spacers, vinyl window and door profiles, seals, and weatherstripping; and (3) Custom Solutions, which manufactures wood, mixing, and building access solutions. For additional discussion of our reportable business segments, see Note 13, “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 the U.K., Germany, Mexico, Canada, and Italy, as well as through sales and marketing efforts in other countries.

On August 1, 2024, we completed the acquisition of Tyman plc (“Tyman”), a company incorporated in England and Wales (“Tyman Acquisition”). 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 13, “Segment Information.”

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

The accompanying interim unaudited condensed consolidated financial statements include the accounts of Quanex Building Products Corporation. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated balance sheet as of October 31, 2025 was derived from audited financial information but does not include all disclosures required by U.S. GAAP. The accompanying financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. In our opinion, the accompanying financial statements contain all adjustments (which consist of normal recurring adjustments, except as disclosed herein) necessary to fairly present our financial position, results of operations and cash flows for the interim periods. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year or for any future periods.

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, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

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 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 account for product returns related to general returns and product nonconformance. 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.

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.

Pricing and sales incentives

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 costs

We account for shipping and handling services as fulfillment services. 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 condensed consolidated statements of (loss) income.

Contract assets and liabilities

Deferred revenue, which is typically 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 and nine months ended July 31, 2026 and 2025, 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 13, “Segment Information.”

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 tobe short-term investments. Restricted cash represents cash held by our foreign subsidiary that is subject to foreign exchange and capital control regulations that may restrict the timing and manner of remittance of funds outside the country. 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.

Allowance for Credit Losses

We have established 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 historical trends of write-offs, recoveries and credit losses, and the credit quality of our customers. We believe our allowance is adequate to absorb known or probable losses as of July 31, 2026. Different assumptions or changes in economic circumstances could result in changes to the allowance.

Related Party Transactions

Net sales to customers which are related parties with one of our non-employee directors for thethree and nine months ended July 31, 2026 were $0.4 million and $1.2 million, respectively, and $0.4 million and $1.4 million, respectively, for comparable prior year periods. Purchases from a supplier which is a related party with one of our non-employee directors for the three and nine months ended July 31, 2026 waszero and $0.3 million, respectively, andzero and $0.1 million for the comparable prior year periods. 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 indepen dently. 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.

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 fiscal 2025, werestructured our reportable segments to integrate the acquisition of Tyman plc with our legacy Quanex operations. This restructuring aligned 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. For additional discussion of our reportable business segments, see Note 13, “Segment Information.”

We incurred no restructuring charges related to the reorganization for thethree and nine months ended July 31, 2026, compared to $1.4 million and $10.2 million, respectively, for the comparable prior year periods. Restructuring charges included workforce alignment costs, primarily severance and employee-related expenses, of $1.4 million and $6.3 million, for thethree and nine months ended July 31, 2025, respectively. As of July 31, 2026, all workforce alignment costs have been paid. Additionally, we recognized $3.9 million during the nine months ended July 31, 2025 related to the disposal of software which no longer supports our business.

2. Inventories

Inventories consisted of the following at July 31, 2026 and October 31, 2025 (in thousands):

3. Property, Plant and Equipment

Property, plant and equipment consisted of the following as of July 31, 2026 and October 31, 2025 (in thousands):

Depreciation expense, including amortization of finance leases, for the three and nine months ended July 31, 2026 was $14.3 million and $43.7 million, respectively, and $21.6 million and $48.2 million for the comparable prior year periods. Prior year included a one-time depreciation charge of $7.3 million to reflect the application on useful lives on an asset-by-asset basis.

We did not record any impairment charges related to property, plant and equipment or intangible assets for the periods ended July 31, 2026 and October 31, 2025.

4. Goodwill and Intangible Assets

Goodwill

The change in the carrying amount of goodwill for the nine months ended July 31, 2026 was as follows (in thousands):

As of July 31, 2026, we haveten reporting units, seven of which comprise our current goodwill balance. Theseten reporting units are aggregated into ourthree reportable segments. See Note 13, “Segment Information” for a summary of the change in the carrying amount of goodwill by segment.

Identifiable Intangible Assets

Amortizable intangible assets consisted of the following as of July 31, 2026 and October 31, 2025 (in thousands):

We had amortization expense related to intangible assets for the three and nine months ended July 31, 2026 of $9.8 million and $29.3 million, respectively, compared to $12.3 million and $29.4 million for the comparable prior year periods, respectively. Amortization expense for thenine months ended July 31, 2025 included a one-time adjustment of $3.5 million.

Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of July 31, 2026 (in thousands):

5. Debt and Finance Lease Obligations

Long-term debt consisted of the following at July 31, 2026 and October 31, 2025 (in thousands):

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.

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 includes 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 isfive 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 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:

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: (1) a 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) a Consolidated Net Leverage Ratio requirement whereby we must not permit the Consolidated Net Leverage Ratio, as defined, to 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 July 31, 2026, we had $618.5 million borrowings outstanding under the Facilities, $5.5 million of outstanding letters of credit, and $53.7 million outstanding primarily under finance leases and other debt. We had $301.0 million available for use under the Revolving Credit Facility at July 31, 2026. The borrowings outstanding as of July 31, 2026 under the Facilities accrue interest at 6.33% per annum, and our weighted-average borrowing rate for borrowings outstanding during the nine months ended July 31, 2026 and 2025 was 6.30% and 6.81%, respectively. We were in compliance with our debt covenants as of July 31, 2026.

6. Retirement Plans

Defined Contribution Plan

We 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 thenine months ended July 31, 2026 and 2025, we contributed approxi mately $9.0 million and $7.5 million for this plan, respectively.

Other Plans

We maintain a non-qualified deferred compensation plan covering members of the Board of Directors and certainkey employees. As of July 31, 2026 and October 31, 2025, the liability associated with the deferred compensation plan was approximately$1.3 million and $4.1 million, respectively. We record the current portion of liabilities associated with these plans under the caption “Accrued liabilities,” and the long-term portion under the caption “Other liabilities” in the accompanying condensed consolidated balance sheets.

7. Income Taxes

To determine our income tax expense or benefit for interim periods, consistent with accounting standards, we apply the estimated annual effective income tax rate to year-to-date results, plus any applicable discrete items, which are recorded in the period in which they occur. Discrete items include, among others, such events as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitations, tax benefits or expense of uncertain tax positions, tax benefits on equity compensation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rates from continuing operations for the nine months ended July 31, 2026 and 2025 were 31.5% and 2.5%, respectively. The difference between our estimated annual effective income tax rate and the U.S. federal statutory rate of 21% principally results from U.S. state taxes, a non-U.S. tax rate differential and other permanent differences.

The increase in the 2026 effective tax rate compared to the prior year was primarily driven by $3.2 million of discrete items including equity-based compensation award activity, state deferred tax remeasurement from legal entity reorganization activities, changes in reserves for uncertain tax positions, as well as the absence of the impairment which occurred in the prior year. The primary discrete item affecting the 2025 effective rate was the benefit of $10.8 million related to the goodwill impairment which was not recognized for tax purposes.

We evaluate the likelihood of realization of our deferred tax assets by considering both positive and negative evidence. We maintain a valuation allowance for certain state net operating losses which totaled $0.8 million as of July 31, 2026 and October 31, 2025, respectively. We also maintain a valuation allowance for capital losses which totaled $3.6 million as of July 31, 2026 and October 31, 2025, respectively.

On July 4, 2025, the One Big Beautiful Bill Act was enacted. The Act included several business tax provisions that impacted the Company, including a reclass of our income tax payable and deferred tax liability related to the timing differences on fixed assets depreciation.

8. Contingencies

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. Currently, 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 fiscal 2026. While 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.

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, and additional claims may be raised in the future that result in the Company bearing legal fees and/or judgment costs, if any. 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. During the quarter ended January 31, 2026, Roofers’ Pension Fund was appointed lead plaintiff (together with Zanol, “Plaintiffs”) and the case was re‑styled as In re Quanex Building Products Corporation Securities Litigation. On March 24, 2026, Plaintiffs filed an amended complaint (the “Zanol Amended Complaint”) that alleges certain violations of federal securities laws related to public disclosures made by the Company in connection with the 2024 acquisition of Tyman plc and 2025 disclosures principally related to our window and door operations in Mexico. On April 24, 2026, a derivative lawsuit titled Torres v. Wilson, et al., Case No. 4:26-cv-03321 was filed in the Southern District of Texas (the “Torres Lawsuit”) against the officers named in the Zanol Amended Complaint and certain members of the Company’s board of directors. The allegations of the Torres Lawsuit are based on the same allegations made in the Zanol Amended Complaint. The Company has filed a motion to dismiss the Zanol Amended Complaint. In July 2026, the Court stayed the Torres Lawsuit, pending the outcome of the Company’s motion to dismiss the Zanol Amended Complaint. While the ultimate outcome of any legal matter cannot be predicted with certainty, the Company strongly believes that the Zanol Amended Complaint and Torres Lawsuit are 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 these actions based on their early stage and the information available to the Company, and accordingly, the Company has not accrued any liability associated with these actions.

9. Derivatives and Hedging

The Company is exposed to interest rate risk associated with its variable-rate borrowings. During the third quarter of 2026, the Company entered into a pay-fixed, receive-floating interest rate swap agreement, based on one-month Term SOFR, to manage the variability in cash flows associated with interest payments on $175.0 million of our outstanding variable-rate borrowings. The interest rate swap matures on August 1, 2029.

The interest rate swap has been designated as a cash flow hedge under ASC 815, Derivatives and Hedging (“ASC 815”). Changes in the fair value of the swap are recorded in other comprehensive income (“OCI”) and are reclassified into interest expense in the same period in which the hedged interest payments affect earnings and cash settlements occur. Refer to Note 10 – Fair Value Measurements of Assets and Liabilities for additional information on determining the fair value of the interest rate swap.

The following table presents the effect of the Company’s cash flow hedge on OCI:

The Company had no derivative instruments designated as hedging instruments as of October 31, 2025.

As of July 31, 2026, the Company estimates an immaterial gain amount related to the interest rate swap will be reclassified to interest expense from OCI during the next 12 months.

10. Fair Value Measurement 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 data 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 by 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 sheet for cash, cash equivalents, 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. As a result, the fair value of our debt instrument approximates carrying value at July 31, 2026, and October 31, 2025 (Level 2 measurement).

As of July 31, 2026, we had no outstanding forward foreign exchange contracts to hedge our exposure to foreign currency fluctuations, as contracts entered into earlier in the fiscal year matured and settled during the period. During the nine months ended July 31, 2026, we used forward foreign exchange contracts to hedge our foreign currency exposures against the Mexican Peso (“MXN”) to the U.S. Dollar (“USD”). During the nine months ended July 31, 2025, we used forward foreign exchange contracts to hedge our foreign currency exposures against USD to the Great British Pound (“GBP”) and MXN to USD. Hedge accounting is not applied to our forward exchange contracts. Our forward foreign exchange contracts are adjusted to fair value by recording gains and losses to “Other, net,” in the accompanying consolidated statement of income (loss), and we record the related asset or liability to “Other Assets” or “Current Liabilities” in the accompanying consolidated balance sheets. We recognized a gain ofzero and $0.3 million related to our forward foreign exchange contracts during the three and nine months ended July 31, 2026, respectively, and a loss of $0.5 million and a gain of $0.3 millionfor the comparable prior year periods, respectively. The value of forward foreign exchange contracts fluctuates based on exchange rate fluctuations for currencies stated in the foreign exchange contracts (Level 2 measurements).

During the third quarter of fiscal 2026, we entered into an interest rate swap agreement to manage the variability in cash flows associated with interest payments on $175.0 million of our outstanding variable-rate borrowings. See Note 9, “Derivatives and Hedging,” for additional information. The interest rate swap agreement is measured at fair value on a recurring basis using valuation models that incorporate observable market inputs, including applicable forward interest-rate curves and market-based discount rates. Accordingly, the interest rate swap agreement is classified as Level 2 measurement.

The following table presents our financial instruments measured at fair value on a recurring basis as of the following periods:

(1) Included in other assets in the condensed consolidated balance sheet as of July 31, 2026. The Company had no interest rate swap asset as of October 31, 2025.

(2) The Company had no interest rate swap liability as of July 31, 2026 or October 31, 2025. Interest rate swap liabilities, if any, would be included in other liabilities in the condensed consolidated balance sheet.

11. Stock-Based Compensation

We 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 during the year.

Restricted Stock Awards

Restricted stock awards are granted to key employees and officers annually, and typically cliff vest over athree-year period or a three-year graded vesting schedule with service and continued employment as the only vesting criteria. The recipient of the 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 the vesting. The fair value of the restricted stock award is established on the grant date and then expensed over the vesting period. Shares are generally issued from treasury stock at the time of grant.

A summary of non-vested restricted stock award activity during the nine months ended July 31, 2026 is presented below:

The total grant-date fair value of restricted stock awards that vested during each of the nine months ended July 31, 2026 and 2025 was $2.4 million and $1.9 million, respectively. As of July 31, 2026, total unrecognized compensation cost related to unamortized restricted stock awards was $4.3 million. We expect to recognize this expense over the remaining weighted average vesting 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. Stock options typically vested ratably over athree-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 is determined on the grant date and expensed over the vesting period.

We use a Black-Scholes pricing model to estimate the fair value of stock options. The following table summarizes our stock option activity for the nine months ended July 31, 2026:

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. There were no stock options exercised during the nine months ended July 31, 2026. The total intrinsic value of stock options exercised during the nine months ended July 31, 2025 was $0.1 million.

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 athree-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 are 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 nine months ended July 31, 2026 and 2025, non-employee directors received 64,360 and 28,240 restricted stock units, respectively, at a weighted-average grant date fair value of $14.92 per share and $29.02 per share, respectively. During the nine months ended July 31, 2026, we paid$1.2 million to settle vested restricted stock units awarded to non-employee directors.

A summary of non-vested restricted stock unit activity awarded to key employees and officers during the nine months ended July 31, 2026 is presented below:

During the nine months ended July 31, 2026, we paid $0.3 million to settle vested restricted stock units awarded to key employees and officers.

Performance Share Awards

Performance shares are awarded to key employees and officers annually. The performance share awards granted in December 2023 vest with return on net assets (RONA) as the vesting condition. The performance share awards granted in December 2024, March 2025 and December 2025 vest with adjusted earnings per share performance as the vesting condition and RONA as a performance modifier. The performance share awards pay out 100% in cash.

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 2023 awarded performance shares may ultimately vest and 0% to 250% of the December 2024 and December 2025 performance shares may ultimately vest.

The following table summarizes our performance share grants and the grant date fair value for each performance metric:

During thenine months ended July 31, 2026, no shares vested pursuant to the December 2022 grant.

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

Performance restricted stock units are awarded to key employees and officers annually. 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:

The following table summarizes our performance restricted stock unit grants and the grant date fair value for the A-TSR performance metric:

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 July 31, 2026, we have deemed 8,645 shares related to the December 2023 grant of performance restricted stock units as probable to vest. The actual number of performance restricted stock units that ultimately vest may differ based on actual performance and market condition outcomes through the end of the applicable performance period.

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 three and nine months ended July 31, 2026 and 2025 (in thousands):

Treasury Shares

We account for treasury stock purchases under the cost method, recording acquired shares at their total purchase price. 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 restricted stock units. Upon reissuance of treasury shares, we record proceeds in excess of cost as an increase in additional paid-in capital. If proceeds are less than costs, the shortfall first reduces paid-in-capital associated with prior issuances, with the remainder recorded as a charge to retained earnings. During the nine months ended July 31, 2026, there were no charges to retained earnings related to treasury stock.

The following table summarizes the treasury stock activity during the nine months ended July 31, 2026:

12. Other, net

Other income included under the caption “Other, net” on the condensed consolidated statements of (loss) income, consisted of the following for the three and nine months ended July 31, 2026 and 2025 (in thousands):

13. Segment Information

Prior to the third quarter of 2025, we presented four reportable business segments in accordance with ASC Topic 280-10-50, “Segment Reporting” (ASC 280): (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, werestructured 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, based on the nature of products offered: 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 our 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 condensed consolidated financial statements. Corporate general and administrative expenses allocated during the three and nine month periods ended July 31, 2026 were $11.5 million and $36.2 million, respectively, and $11.5 million and $29.4 million for the comparable prior year periods.

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 this measure for each segment when making decisions about allocating capital and personnel. In addition, the CODM uses net sales to compare segment performance and in the compensation of certain employees.

The Company does not present segment asset information as such information is not provided to the CODM and accordingly, asset information is not used in assessing segment performance.

Selected segment information for the three and nine months ended July 31, 2026 and 2025 was as follows (in thousands):

The following table summarizes the change in the carrying amount of goodwill by reportable business segment for the nine months ended July 31, 2026 (in thousands):

We do 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 three and nine months ended July 31, 2026 and 2025 (in thousands):

14. 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 three and nine months ended July 31, 2026 and 2025 follows (in thousands, except per share data):

We do not include equity instruments in our calculation of diluted earnings per share if those instruments would be anti-dilutive. We had anti-dilutive restricted stock award equivalents for the three and nine months ended July 31, 2026 of 2,555 and 6,803, respectively, and 37,142 and 21,538 for the comparable prior year periods. 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.

15. 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. We did not adopt any new accounting pronouncements during the three and nine months ended July 31, 2026.

Recent Accounting Standards Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “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. The required disclosures as per this ASU will be first included with our annual financial statements for the year ended October 31, 2028.

In December 2023, the FASB issued ASU 2023-09, “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. This ASU is expected to result in expanded tax disclosures for our annual financial statements for the year ended October 31, 2026.

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.

Cautionary Note Regarding Forward-Looking Statements

Certain of the statements contained in this document and in documents incorporated by reference herein, including those made under the caption“Management’s Discussion and Analysis of Financial Condition and Results of Operations” include “forward-looking” statements as defined under the Private Securities Litigation Reform Act of 1995. Generally, the words “expect,” “believe,” “intend,” “estimate,” “anticipate,” “project,” “will,” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are statements as to matters that are not historical facts, and include statements about our plans, objectives, expectations and intentions, including (1) all statements which address future operating performance, (2) events or developments that we expect or anticipate will occur in the future, including statements relating to the Tyman Acquisition and statements relating to volume, sales, operating income, and earnings per share, and (3) statements expressing general outlook about future operating results. Forward-looking statements also include any statements relating to future capital expenditures, expenses, revenues, economic performance, financial conditions, dividend policy, losses, future prospects or business or management strategies, and the expansion and/or growth of the operations of the Company. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations. As and when made, we believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, provided, that we cannot give any assurance that such expectations will prove to be correct. However, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to the following:

•changes in foreign trade relations and associated tariffs could result in a global trade war;

•changes in energy costs and the availability of energy;

•impacts from public health issues on the economy, demand for our products or our operations, including the responses of governmental authorities to contain such public health issues;

•our ability to continue to integrate and implement our plans, forecasts, expectations, and realize anticipated synergies with respect to the Tyman business we purchased in August 2024;

•changes in market conditions, particularly in the new home construction, and residential remodeling and replacement (R&R) activity markets in the United States, United Kingdom, Germany, Italy and elsewhere;

•consolidations, restructurings, bankruptcies and reorganizations among our customers, distributors, suppliers and other participants in the building products manufacturing industry, and our inability to collect receivables;

•changes in non-pass-through raw material costs;

•changes in domestic and international economic conditions;

•changes in availability and prices of raw material including inflationary pressures and supply chain challenges, which could be exacerbated by political or global unrest;

•our ability to attract and retain skilled labor;

•changes in purchases by our principal customers;

•fluctuations in foreign currency exchange rates;

•our ability to maintain an effective system of internal controls;

•our ability to successfully implement our internal operating plans and acquisition strategies;

•our ability to successfully implement our plans with respect to information technology (IT) systems and processes;

•our ability to control costs and increase profitability;

•changes in environmental laws and regulations;

•changes in warranty obligations;

•changes in tax laws, and interpretations thereof;

•changes in interest rates;

•our ability to service our debt facilities and remain in good standing with our lenders;

•our ability to remediate any material weakness that we have identified or may identify in the future that could result in material misstatements in our financial statements;

•changes in the availability or applicability of our insurance coverage;

•our ability to maintain good relationships with our suppliers, subcontractors, and key customers;

•potential future impairments of goodwill or our long-lived assets; and

•the resolution of litigation and other legal proceedings.

For information on additional factors that could cause actual results to differ materially, please refer to the section entitled“Item 1A. Risk Factors” within this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

About Third-Party Information

In this report, we rely on and refer to information regarding industry data obtained from market research, publicly available information, industry publications, U.S. government sources and other third parties. Although we believe this information is reliable, we cannot guarantee the accuracy or completeness of the information and have not independently verified it.