NX 10-K & 10-Q changes, risk factors and insider trading
Quanex Building Products CORP · NYSE · Rolling Drawing & Extruding Of Nonferrous Metals · CIK 1423221 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Regional or global barriers to trade or a global trade war could increase the cost of our raw materials and other products in the markets we serve, which could adversely impact the financial results of businesses serving those markets, including Quanex.”
New heading “We may identify new or additional material weakness or weaknesses in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.”
Removed heading “The impact of foreign trade relations and associated tariffs could result in a global trade war and adversely impact our business.”
Removed heading “We have identified a material weakness in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.”
Largest changes
“Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. As disclosed in Item 9A, “Controls and Procedures,” our controls and procedures were not effective as a result of a material weakness in internal controls over financial reporting. …”see in full comparison
“Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. It is possible that we may identify vulnerabilities with respect to our internal controls. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. …”see in full comparison
“We may identify new or additional material weakness or weaknesses in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.”see in full comparison
“We have identified a material weakness in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.”see in full comparison
“We evaluate our goodwill and indefinite-lived intangible assets at least annually to determine whether we must test for impairment. In making this assessment, we must use judgment to make estimates of future operating results and appropriate residual values. Actual future operating results and residual values associated with our operations could differ significantly from these estimates, which may result in an impairment charge in a future period, resulting in a decrease in net income from operations in the year of the impairment, as well as a decline in our recorded net worth. …”see in full comparison
“The impact of foreign trade relations and associated tariffs could result in a global trade war and adversely impact our business.”see in full comparison
Full comparison: every changed paragraph (21)
We evaluate our goodwill and indefinite-lived intangible assets at least annually to determine whether we must test for impairment. In making this assessment, we must use judgment to make estimates of future operating results and appropriate residual values. Actual future operating results and residual values associated with our operations could differ significantly from these estimates, which may result in an impairment charge in a future period, resulting in a decrease in net income from operations in the year of the impairment, as well as a decline in our recorded net worth. Goodwill totaled $574.7 million at October 31, 2024. The results of goodwill impairment testing are described in the accompanying notes to the audited financial statements, Note 7, “Goodwill and Intangible Assets” of the accompanying financial statements in this Annual Report on Form 10-K.
Regional or global barriers to trade or a global trade war could increase the cost of our raw materials and other products in the markets we serve, which could adversely impact the financial results of businesses serving those markets, including Quanex.
The state of relationships between other countries and the United States with respect to trade policies, government relations and tariffs may impact our business. The U.S. government has and continues to make significant changes in U.S. trade policy and has taken certain actions that could negatively impact U.S. trade, including imposing tariffs on certain goods imported into the United States. There is concern that the imposition of tariffs by the United States could result in the adoption of tariffs or retaliatory measures by other countries, leading to a global trade war. Such tariffs or retaliatory measures could raise the cost and reduce the supply of certain raw materials, such as aluminum and wood, which are critical to our ability to manufacture our products. In the event of a global trade war or regional dispute, local suppliers may choose to allocate their resources to local players in their markets and provide us with less favorable terms. Raw material shortages and price increases could cause distribution delays and increase our costs, which in turn could reduce our competitiveness and impact our ability to do business with certain counterparties.
General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions and changes in tariffs, and the possibility of additional tariffs, non-tariff barriers or other trade restrictions between the United States and other countries where we might in the future manufacture, distribute or sell products, could adversely impact our business. If the cost of our raw materials increases, or if we are unable to procure the necessary raw materials required to manufacture our products, then we could experience a negative impact on our operating results, profitability, customer relationships, and future cash flows.
We may identify new or additional material weakness or weaknesses in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. It is possible that we may identify vulnerabilities with respect to our internal controls. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Item 9A, “Controls and Procedures,” our controls and procedures were not effective as a result of a material weakness in internal controls over financial reporting as of October 31, 2024. The material weakness was specifically related to the design and operation of the controls over the preparation and review of the statement of cash flows. Throughout 2025, the Company continued to implement a remediation plan designed to address this material weakness. However, this material weakness continued to exist as of October 31, 2025 and will not be considered remediated until such time as management designs and implements effective controls that operate for a sufficient period of time and concludes through testing, that these controls are effective. If additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected. If we are unable to maintain effective internal control over financial reporting, our financial statements may contain material misstatements and we could be required to restate our financial results. If our financial statements are not filed on a timely basis or we are required to restate our financial results, we could be in violation of covenants contained in the agreements governing our debt and other borrowings.
The impact of foreign trade relations and associated tariffs could result in a global trade war and adversely impact our business.
We currently source a number of raw materials from international suppliers. Import tariffs, taxes, customs duties and/or other trading regulations imposed by the U.S. government on foreign countries, or by foreign countries on the U.S., could result in a global trade war which may significantly increase the prices we pay for certain raw materials, such as aluminum and wood, that are critical to our ability to manufacture our products. In addition, we may be unable to find a domestic supplier to provide the necessary raw materials on an economical basis in the amounts we require. If the cost of our raw materials increases, or if we are unable to procure the necessary raw materials required to manufacture our products, then we could experience a negative impact on our operating results, profitability, customer relationships and future cash flows.
We have identified a material weakness in our internal control over financial reporting which may, if not remediated, result in material misstatements in our financial statements.
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. As disclosed in Item 9A, “Controls and Procedures,” our controls and procedures were not effective as a result of a material weakness in internal controls over financial reporting. The material weakness related to an error pertaining to the improper inclusion of the equity component of the Company’s purchase of Tyman in the statement of cash flows under “Cash used for Investing Activities” rather than its proper classification as a noncash item. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of this material weakness, our management concluded that our internal control over financial reporting and related disclosure controls and procedures were not effective. We are actively engaged in developing a remediation plan designed to address this material weakness. If our remedial measures are insufficient to address the material weakness, or if additional material weaknesses or significant deficiencies in our internal control are discovered or occur in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected. If we are unable to remediate the material weakness, or if we are otherwise unable to maintain effective internal control over financial reporting, our financial statements may contain material misstatements and we could be required to restate our financial results. If our financial statements are not filed on a timely basis or we are required to restate our financial results, we could be in violation of covenants contained in the agreements governing our debt and other borrowings.
Our business, financial condition, and results of operations could be adversely affected by disruptions in the global economy caused by the warscontinued conflicts in Ukraine and Gaza.
U.S. and global markets are experiencing volatility and disruption related to the escalation of geopolitical tensions and the military conflict currently ongoing in Ukraine and the Gaza Strip. These conflicts could lead to market or operational disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Russia, Europe’s largest provider of natural gas, has significantly reduced the export of natural gas compared to the beginning of the conflict resulting in the increase in natural gas prices and the potential for natural gas shortages. In many European countries, including Germany, alternatives to natural gas have limited capacity. This has had and may continue to have a negative impact on the energy costs of our European manufacturing facilities and may also negatively impact our customers and their demand for our products. In addition, one of the suppliers of a vapor barrier used in the production of our insulating glass spacers is located in Israel and may experience a disruption as a result of the ongoing conflict in Gaza. If supply chain interruptions or other disruptions result in the unavailability of raw materials or an increase to the price of raw materials or other commodities, we could experience a negative impact on our operating results, profitability and future cash flows.
Our revenues could decline or we may lose business if our customers vertically integrate their operations, diversify their supplier base, or transfer manufacturing capacity to other regions.regions, or respond to operational challenges in our business.
Certain of our businesses or product lines are largely dependent on a relatively few large customers. Although we believe we have an extensive customer base, if we were to lose one of these large customers or if one such customer were to materially reduce its purchases as a result of vertical integration, supplier diversification, or a shift in regional focus, or concerns related to operational challenges, our revenue, general financial condition and results of operations could be adversely affected.
We evaluate our goodwill and indefinite-lived intangible assets at least annually to determine whether we must test for impairment. In making this assessment, we must use judgment to make estimates of future operating results and appropriate residual values. Actual future operating results and residual values associated with our operations could differ significantly from these estimates, which may result in an impairment charge in a future period, resulting in a decrease in net income from operations in the year of the impairment, as well as a decline in our recorded net worth. In the third quarter of 2025, we tested goodwill for impairment as a result of the restructuring. The testing of our goodwill resulted in an goodwill impairment of $302.3 million. Goodwill totaled $271.3 million at October 31, 2025. The results of goodwill impairment testing are described in the accompanying notes to the audited financial statements, Note 7, “Goodwill and Intangible Assets” of the accompanying financial statements in this Annual Report on Form 10-K.
We cannot provide assurance that we will successfully manage or integrate acquisition targets once we have purchased them, including Tyman. If we acquire a business for which we do not fully understand or appreciate the specific business or operational risks, if we overvalue or fail to conduct effective due diligence on an acquisition, or if we fail to effectively and efficiently integrate a business that we acquire, then there could be a material adverse effect on our ability to achieve the projected growth and cash flow goals associated with the new business, which could result in an overall material adverse effect on our long-term profitability or revenue generation.
If an epidemic or pandemic, such as COVID-19,pandemic disrupts the worldwide economy, or if similar widespread disease outbreaks occur in the future, our business, financial condition and results of operations could be negatively affected to the extent such event harms the economy or region in which we operate.
Our business could be materially and adversely affected by the occurrence of a widespread health epidemic or pandemic. In particular, any outbreak or resurgence of COVID-19 or any other future variants,pandemic or governmental imposition of mandatory or voluntary closures in areas where our manufacturing facilities, suppliers or customers are located, could severely disrupt our operations and result in (a) plant slowdowns or shutdowns, (b) difficulty obtaining necessary supplies, and (c) reduced customer orders and revenues. In addition to this potential direct impact on our facilities and operations, continuing outbreaks of the virus could negatively impact our industry and end markets as a whole, or result in a longer-term economic recession. Any of these factors could negatively affect our business, financial condition, cash flows, profitability, and results of operations.
We may not have the right personnel in place to achieve our operating goals, and the rural location of some of our operations may make it difficult to locate or hire highly skilled employees.
ClimateChanges changein climate and related extreme weather events could disrupt our supply chain, decrease customer demand for our products, or damage our manufacturing facilities.
We, along with many of our customers and suppliers, operate manufacturing facilities in areas at risk for extreme weather events such as hurricanes, tornadoes, drought, wildfires, winter storms, or floods. Ongoing climate change has increased the frequency and severity of these events and the related risk of a catastrophic weather event affecting one of our plants, or a plant owned by one of our customers or suppliers. If such an event occurs at a facility belonging to one of our customers, we could see reduced demand for our products. If such an event occurs at a facility belonging to us or one of our suppliers, we may be unable to timely and cost-effectively manufacture products for our customers. These declines in demand or impacts to our ability to manufacture our products could negatively impact our revenues, earnings, cash flow, and other operating results.
Management's Discussion & Analysis (MD&A)
New heading “Comparison of the fiscal years ended October 31, 2025 and 2024”
New heading “Changes Related to Operating Income by Reportable Segment:”
New heading “Hardware Solutions”
New heading “Extruded Solutions”
New heading “Custom Solutions”
New heading “Unallocated Corporate & Other”
New heading “Changes Related to Non-Operating Items:”
New heading “Hardware Solutions”
New heading “Extruded Solutions”
New heading “Custom Solutions”
New heading “Recent Accounting Pronouncements Not Yet Adopted”
Removed heading “NA Fenestration”
Removed heading “EU Fenestration”
Removed heading “NA Cabinet Components”
Removed heading “Retirement Plans”
Largest changes
“As discussed in the “Goodwill” and “Restructuring” sections of our “Nature of Operations and Basis of Presentation” in Note 1, we restructured our reportable segments during the third quarter of 2025, which triggered the requirement to assess our recorded goodwill by reporting unit for potential impairment. The evaluation resulted in an impairment charge primarily associated with the decline in our stock price through the assessment date. …”see in full comparison
“At September 30, 2025, taking into consideration the most recent stock price trajectory, we again assessed our goodwill for potential impairment. Changes in certain assumptions could have a significant impact on the impairment tests for goodwill. The most critical assumptions are projected future growth rates, EBITDA margin, terminal growth rate, discount rate selection, peer group determination and market multiples. These assumptions are subject to change as the Company's long-term plans and strategies are updated each year. …”see in full comparison
“In connection with the restructuring of our operating segments during the third quarter of 2025, we reassigned goodwill among certain of our reporting units using a relative fair value approach and performed a quantitative goodwill impairment test on all reporting units to determine if any impairment existed. To estimate the fair value of our reporting units, we first applied the discounted cash flow method under the income approach. While the income approach did not initially indicate an impairment, as required, we then applied the market approach. …”see in full comparison
“We restructured our reportable segments during the third quarter of 2025, which triggered the requirement to assess our goodwill for potential impairment. The testing of our goodwill resulted in a goodwill impairment of $302.3 million, in significant part driven by the prolonged decline in our stock price through the testing date as a result of weaker consumer confidence and high levels of uncertainty across the industry. …”see in full comparison
“Income Taxes. We recorded income tax expense of $8.2 million on pre-tax loss of $242.6 million for the twelve months ended October 31, 2025, an effective rate of 3.4%, and income tax expense of $9.0 million on pre-tax income of $42.1 million for the twelve months ended October 31, 2024, an effective rate of 21.4%. The October 31, 2025 effective rate is lower than the U.S. federal statutory rate of 21% primarily due to the impact of the goodwill impairment, U.K. patent box benefit, foreign tax credit, and change in the valuation allowance. …”see in full comparison
“Cash provided by operating activities increased $76.1 million for the year ended October 31, 2025 compared to the year ended October 31, 2024. This increase is attributable to the increase in net income, excluding the impact of non-cash items such as goodwill impairment charges and depreciation and amortization expense, partially offset by unfavorable changes in working capital. Changes in working capital were net favorable, driven by an increase in accounts payable, lower inventory levels, and an increase in income taxes payable. …”see in full comparison
Full comparison: every changed paragraph (102)
The following discussion and analysis contains forward-looking statements based on our current assumptions, expectations, estimates and projections about our business and the homebuilding industry, and therefore, it should be read in conjunction with our consolidated financial statements and related notes thereto, as well as our “Cautionary Note Regarding Forward-Looking Statements” discussed elsewhere within this Annual Report on Form 10-K. For a listing of potential risks and uncertainties which impact our business and industry, see “Item 1A. Risk Factors.” Actual results could differ from our expectations due to several factors which include, but are not limited to: the impact of market price and demand for our products, economic and competitive conditions, capital expenditures, new technology, regulatory changes and other uncertainties. For a listing of potential risks and uncertainties which impact our business and industry, see “Item 1A. Risk Factors.” Unless otherwise required by law, we undertake no obligation to publicly update any forward-looking statements, even if new information becomes available or other events occur in the future.
We currentlyare manufacturea componentsleading formanufacturer and component supplier to original equipment manufacturers (OEMs) in the building products industry.industry, including window, door, solar, refrigeration, custom mixing, building access, and cabinetry markets. The majority of these components can be categorized as window and door (fenestration) components and kitchen and bath cabinet components. Examples of fenestrationwindow and door components include energy-efficient flexible insulating glass spacers, extruded vinyl profiles, window and door screens, precision-formed metal and wood products, window and door seals, and window and door hardware. In addition, we provide certain other non-fenestration components and products, which include solar panel sealants, trim moldings, vinyl decking, water retention barriers, conservatory roof components, and commercial access solutions. We use low-costcost-effective production processes and engineering expertise to provide our customers with specialized products for their specific applications. We believe these capabilities provide us with unique competitive advantages. We serve a primary customer base in North America and the 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 (the “Tyman Acquisition”), a company incorporated in England and Wales (“Tyman”). The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised 14,139,477 newly issued Quanex common shares (“New Quanex Shares”) and cash consideration of approximately $504.1 million (being the Pound Sterling amount of cash consideration of £392.2 million in respect of all of the Tyman Shares converted to U.S. Dollars at an exchange rate of 1.2855). New Quanex Shares issued in connection with the Tyman Acquisition on the New York Stock Exchange took effect on August 2, 2024 and Tyman’s shares on the London Stock Exchange were canceled.
WeIn currentlyconnection havewith fourthe Tyman acquisition, we re-evaluated our reportable segment presentation during the third quarter of 2025 and adjusted our segment structure to better align our business operations. As a result, we now report three reportable segments: (1)Hardware NorthSolutions, Americanwhich Fenestrationprovides segment (“NA Fenestration”), comprising three operating segments, consisting of vinyl profiles, IG spacers, screens, custom compound mixingwindow and otherdoor fenestration components; (2) European Fenestration segment (“EU Fenestration”), comprising our U.K.-based vinyl extrusion business, manufacturing vinyl profileshardware and conservatories,screens; andExtruded theSolutions, Europeanwhich supplies insulating glass businessspacers, manufacturingvinyl IGwindow spacers; (3) North American Cabinet Components segment (“NA Cabinet Components”), comprising our North American cabinetand door andprofiles, components businessseals, and two wood-manufacturing plants,weatherstripping; and (4)Custom Tyman,Solutions, which wasprovides acquiredwood, on August 1, 2024, comprising a leading international supplier of engineered fenestration componentsmixing, and building access solutionssolutions. We continue to the construction industry. We 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 and inter-segment eliminations, and executive incentive compensation and medical expense fluctuations relative to planned costs as determined during the annual planning process. Other corporate general and administrative costs have been allocated to the reportable business segments, based upon aeach segment’s relative measureoperating of profitability in order to more accurately reflect each reportable business segment's administrative costs.activity. The accounting policies of our operating segments are the same as those used to prepare our accompanying consolidated financial statements. Corporate general and administrative expenses allocated during the years ended October 31, 2024,2025, 2024 and 2023 andwere 2022$40.3 weremillion, $27.3 million, and $23.5 million, and $24.5 million, respectively.
On November 1, 2022, we entered into an Asset Purchase Agreement with LMI (the “LMI Acquisition”) and the equity owners of LMI, Lauren International, Ltd. and Meteor-US-Beteiligungs GMBH whereby we acquired substantially all of the operating assets comprising LMI’s polymer mixing and rubber compound production business and also assumed certain liabilities. LMI is included within our Custom Solutions reportable segment. As consideration for the LMI Acquisition, we paid $91.3 million in cash utilizing funds borrowed under our Credit Facility.
We restructured our reportable segments during the third quarter of 2025, which triggered the requirement to assess our goodwill for potential impairment. The testing of our goodwill resulted in a goodwill impairment of $302.3 million, in significant part driven by the prolonged decline in our stock price through the testing date as a result of weaker consumer confidence and high levels of uncertainty across the industry. Of the goodwill impairment amount recorded in the third quarter, $44.8 million relates to tax-deductible goodwill, the remaining charge was not deductible for tax purposes and no deferred tax asset was recognized. For additional discussion of our goodwill, see Note 7, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 17, “Segment Information.”
We are monitoring the rapidly evolving tariff and global trade policies and we are working with our suppliers to mitigate potential impacts on our business. The extent and duration of the tariffs and the resulting impact on general economic conditions on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions that may be granted, availability and cost of alternative sources of supply and demand for our products in affected markets. While the tariff situation remains fluid, we generally expect to pass along costs associated with tariffs to our customers through contractual or pricing mechanisms.
On August 1, 2024, we completed the acquisition of Tyman plc (the “Tyman Acquisition”), a company incorporated in England and Wales (“Tyman”). The aggregate consideration due pursuant to the Tyman Acquisition at closing comprised of 14,139,477 newly issued Quanex common shares (“New Quanex Shares”) and cash consideration of approximately $504.1 million (being the Pound Sterling amount of cash consideration of £392.2 million in respect of all of the Tyman Shares converted to U.S. Dollars at an exchange rate of 1.2855). New Quanex Shares issued in connection with the Tyman Acquisition on the New York Stock Exchange took effect on August 2, 2024 and Tyman’s shares on the London Stock Exchange were canceled.
On November 1, 2022, we entered into an Asset Purchase Agreement with LMI and the equity owners of LMI, Lauren International, Ltd. and Meteor-US-Beteiligungs GMBH. Under the Purchase Agreement, we acquired substantially all of the operating assets comprising LMI’s polymer mixing and rubber compound production business and also agreed to assume certain liabilities relating to the Acquisition. LMI is allocated entirely to our North American Fenestration reportable operating segment. As consideration for the Purchased Assets, we paid $91.3 million in cash utilizing funds borrowed under our Credit Facility. In connection with the Acquisition, we amended our existing finance lease with Lauren Real Estate Holding LLC for the purpose of adding an additional lease renewal option and increasing rental space by approximately 60,000 square feet of rental space which was added to the 313,595 square feet of rentable area located in Cambridge, Ohio.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensionstensions, andincluding the ongoing military conflicts currently ongoing in Ukraine and Gaza. Although the length and impact of these ongoing military conflicts are highlyremain unpredictable, the conflicts couldcan continue to lead to market or operational disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Russia, Europe’s largest provider of natural gas, has significantly reduced the export of natural gas compared to the beginning of the conflict resulting in the increase in natural gas prices and the potential for natural gas shortages. In addition, one of the suppliers of a vapor barrier used in the production of our insulating glass spacers is located in Israel and may experience a disruption as a result of the ongoing conflict in Gaza. If these trends continues, this would not only negatively impact our European manufacturing facilities, this may also impact our customers and their demand for our products. We continue to monitor these situations and their impact on our business.
TheGeopolitical conflicts in Ukraine and Gazatensions and their impacts on the global economy, including inflation and the price of raw materials, supply chain disruptions, and the volatility in interest rates including home mortgage rates, are unpredictable and there may be developments outside our control requiring us to adjust our operating plan.
In November 2024,2025, the NAHB forecasted calendar-year housing starts (excluding manufactured units) to be 1.4 million in the 2024,2025, 1.51.3 million in 2025,the 2026, and 1.61.4 million in 2026the 2027 calendar-years. The November 20222025 Ducker forecast indicated that window shipments in the R&R market are expected to decrease approximately 5.9%5.2% and increase 4.0%1.9% in the calendar-years ended 20242025 and 2025,2026, respectively, and window shipments in the new construction market are expected to increasedecrease 0.9%5.0% and 1.6%0.8% in the calendar-years ended 20242025 and 2025,2026, respectively, resulting in overall window shipment decline of 2.7%5.1% in 20242025 and increase 2.8%1.4% in 2025.2026. Derived from reports published by Ducker, the overall decrease in window shipments decreased 3.9%, new construction activity decreased 5.3% and R&R replacement decreased 2.6%, respectively, for the trailing twelve months ended September 30, 2024 was 0.7%. During this period, new construction activities decreased 2.5% and R&R increased 1.1%.2025.
Our Hardware Solutions segment manufactures engineered window and door hardware, screens, and other fenestration components primarily serving the residential and light-commercial building markets. The majority of segment revenue is generated in North America, and as such, domestic housing starts and R&R activity remain the primary demand drivers. Long-term secular trends, including a structural undersupply of U.S. housing, an aging housing stock, and increasing home equity, are expected to support sustained demand for window and door replacement. Internationally, the segment serves a broad customer base of OEMs and distributors across Europe and Asia, where government incentives for energy efficiency and renovation activity are expected to support steady replacement demand over the medium term.
Our Extruded Solutions segment manufactures insulating-glass spacers, vinyl and composite profiles, and sealing solutions used in the fabrication of windows, doors, conservatories, roofs, and related building applications. This segment operates across North America and Europe, and its results are influenced by housing starts, energy-efficiency standards, and renovation activity in those regions. In the U.S., demand for insulating-glass spacers and vinyl profiles is supported by increasing adoption of high-performance window systems that improve thermal performance. In the U.K. and continental Europe, our vinyl business serves window fabricators and distributors with a broad offering of vinyl extrusions, decking, and roofing systems. The European market continues to benefit from government-sponsored retrofit programs and EU directives targeting energy efficiency and sustainability in existing building stock.
Our Custom Solutions segment delivers a diverse range of engineered product solutions across wood, metal, and elastomeric materials that serve residential, commercial, and industrial end markets. The segment’s portfolio includes interior building components, specialty access systems, and custom-formulated compounds designed for highly technical applications. Demand for these products is driven by overall levels of construction and remodeling activity, as well as broader trends in manufacturing, infrastructure investment, and industrial production. The segment’s ability to offer customized, high-performance solutions tailored to specific customer requirements positions it to participate in both residential and commercial growth cycles, while providing diversification beyond traditional fenestration markets.
Our business is seasonal, as inclement weather during the winter months tends to slow construction and installation activity for exterior building products.
Our U.K. vinyl business (commonly referred to as “Liniar”) is largely focused on the sale of vinyl house systems under the trade name “Liniar” to smaller window manufacturers in the U.K. Liniar is one of the larger providers of vinyl extruded products in the U.K. in terms of volume shipped. Currently, the U.K. is experiencing a shortage in affordable housing, with rising demand due in part to a growing immigrant population. Liniar’s current primary customers are smaller window fabricators, as opposed to the larger OEMs that comprise a large portion of the North American market. These manufacturers seek the quality and technology of the specific products identified by the Liniar trade name. In addition, Liniar services non-fenestration markets including the manufacture of roofing for conservatories, vinyl decking and vinyl water retention barriers used for landscaping. We believe there are growth opportunities within these markets in the U.K. and potential synergies which may enable us to sell complementary products.
NA Cabinet Components manufactures kitchen and bathroom cabinet doors and components, amongst other products, using a variety of woods from traditional hardwoods to engineered wood products. Currently, most of the revenue in the NA Cabinet Components segment is earned in the U.S., so domestic housing starts and R&R activity constitute the primary drivers of this business as well. The cabinet door market is stratified as follows: stock (low-cost, low-variations), semi-custom (more customized, just-in-time manufacturing, higher price point) and custom (precise customer specifications, just-in-time manufacturing, high-end price point). NA Cabinet Component's primary market is semi-custom.
The Tyman business manufactures and distributes engineered door and window components and access solutions to the construction industry. Approximately 60% of revenue is earned in the U.S., so domestic housing starts and R&R activity also constitute the primary drivers of this business, as well as commercial building starts being the main driver of the access solutions business. Sales in the U.S. are predominantly to large OEMs as well as through distributors. Approximately 15% of Tyman’s revenue is earned in the U.K., with the majority being derived from R&R activity. We have historically evaluated the U.K. market using data from the Construction Products Association (CPA). U.K. customers are smaller window and door manufacturers and distributors. The remainder of revenue is earned in Canada, Italy and Continental Europe, with sales and marketing efforts in other countries internationally. The drivers of these businesses are largely housing starts and R&R activity in these countries.
Our business is seasonal, particularly our fenestration business, as inclement weather during the winter months tends to slow down construction, particularly as related to “outside of the house” construction. To some extent, we believe our kitchen and bathroom cabinet door business lessens the impact of seasonality on our operating results, as the cabinet business is “inside of the house” and less susceptible to weather.
The global economy remains uncertain due to currency devaluations, political unrest, terror threats, global pandemics such as COVID-19, and the political landscape in the U.S. These and other macro-economic factors have impacted the global financial markets, which may have contributed to significant changes in foreign currencies. We continue to monitor our exposure to changes in exchange rates.
Comparison of the fiscal years ended October 31, 2025 and 2024
This table sets forth our consolidated results of operations for the twelve-month periods ended October 31, 2025 and 2024.
Our year-over-year results by reportable segment follow.
Changes Related to Operating Income by Reportable Segment:
Hardware Solutions
Net Sales. Net sales increased $413.8 million, or 97%, for the twelve months ended October 31, 2025 compared to the same period in 2024. The increase was primarily driven by $411.5 million of incremental sales from the Tyman acquisition, as well as a $4.6 million increase attributable to price and raw material index adjustments, and a $2.5 million favorable impact from foreign currency rate change. These increases were partially offset by a $4.8 million decrease in volumes, reflecting softer market demand driven by weaker consumer confidence.
Cost of Sales. Cost of sales increased $286.1 million, or 82%, for the twelve months ended October 31, 2025 compared to the same period in 2024. Cost of sales, including labor, increased primarily due to the inclusion of Tyman’s operations, as well as inflationary increases in raw materials, pricing impacts, and foreign currency movement. These increases were partially offset by lower volumes during the period.
Selling, General and Administrative. Our selling, general and administrative expenses increased by $76.4 million, or 148%, for the twelve months ended October 31, 2025 compared to the same period in 2024. This increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Restructuring Charges. Restructuring charges of $7.9 million incurred during the year ended October 31, 2025 primarily relate to the restructuring of our operating segments. For additional discussion of the structuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Goodwill impairment charges. Goodwill impairment charges of $163.2 million relate to goodwill impairment incurred during the year ended October 31, 2025. For additional discussion of our goodwill, see Note 7, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 17, “Segment Information.”
Extruded Solutions
Net Sales. Net sales increased $86.6 million, or 15%, when comparing the twelve months ended October 31, 2025 compared to the same period in 2024. The increase was primarily driven by $115.4 million of incremental sales from the Tyman acquisition and a $5.4 million favorable impact from foreign currency rate change. These increases were partially offset by a $32.5 million decline in volumes, reflecting softer demand in certain end markets, and a $1.7 million decrease related to price and surcharge activity.
Cost of Sales. The cost of sales increased $50.4 million, or 13%, for the twelve months ended October 31, 2025 compared to the same period in 2024. Cost of sales increased primarily due to the inclusion of Tyman’s operations and inflationary pressures on raw materials and foreign currency impacts. These increases were partially offset by lower production volumes during the period.
Selling, General and Administrative. Our selling, general and administrative expense increased $25.6 million, or 44%, for the twelve months ended October 31, 2025 compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Goodwill impairment charges. Goodwill impairment charges of $54.9 million relate to goodwill impairment incurred during the year ended October 31, 2025. For additional discussion of our goodwill, see Note 7, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 17, “Segment Information.”
Custom Solutions
Net Sales. Net sales increased $78.8 million, or 25%, for the twelve months ended October 31, 2025 compared to the same period in 2024. The increase was primarily attributable to $74.1 million of incremental sales from the Tyman acquisition, as well as a $6.9 million increase in pricing and surcharge activity and a $0.2 million favorable foreign currency rate change. These increases were partially offset by a $2.4 million decline in volumes driven by softer customer demand.
Cost of Sales. The cost of sales increased $46.2 million, or 18%, for the twelve months ended October 31, 2025 compared to the same period in 2024, primarily driven by the addition of Tyman’s operations, as well as higher raw material prices and pricing-related cost impacts. These increases were partially offset by reduced volumes in the period.
Selling, General and Administrative. Our selling, general and administrative expense increased $17.2 million, or 55%, for the twelve months ended October 31, 2025 compared to the same period in 2024. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs related to the acquisition of the Tyman business costs year-over-year.
Goodwill impairment charges. Goodwill impairment charges of $84.2 million relate to goodwill impairment incurred during the year ended October 31, 2025. For additional discussion of our goodwill, see Note 7, “Goodwill and Intangibles.” For additional information and discussion of changes in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 17, “Segment Information.”
Unallocated Corporate & Other
Net Sales. Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the twelve months ended October 31, 2025 and 2024.
Cost of Sales. Cost of sales for Corporate & Other consists of the elimination of inter-segment sales, profit in inventory, and other costs.
Selling, General and Administrative. Our selling, general and administrative unallocated expenses decreased $32.5 million, or 65%, for the twelve months ended October 31, 2025 compared to the same period in 2024. This decrease is primarily attributable to a decrease in transaction and advisory fees and lower compensation expense, including the valuations of our stock-based compensation awards, partially offset by an increase in restructuring costs and medical expenses year-over-year.
Restructuring Charges. Restructuring charges of $2.0 million incurred during the year ended October 31, 2025 primarily relate to the restructuring of our operating segments. For additional discussion of the structuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Changes Related to Non-Operating Items:
Interest Expense. Interest expense increased $35.2 million, or 171%, for the twelve months ended October 31, 2025 compared to the same period in 2024 primarily as result of an increase in borrowings related to the Tyman acquisition during the year ended October 31, 2025 compared to the prior year period.
Other, net. Other income decreased $0.7 million for the twelve months ended October 31, 2025 compared to other income in the same period in 2024. The decrease is primarily due to foreign currency derivative gains which occurred in the prior year partially offset by an increase in currency transaction gains in the current year.
Income Taxes. We recorded income tax expense of $8.2 million on pre-tax loss of $242.6 million for the twelve months ended October 31, 2025, an effective rate of 3.4%, and income tax expense of $9.0 million on pre-tax income of $42.1 million for the twelve months ended October 31, 2024, an effective rate of 21.4%. The October 31, 2025 effective rate is lower than the U.S. federal statutory rate of 21% primarily due to the impact of the goodwill impairment, U.K. patent box benefit, foreign tax credit, and change in the valuation allowance. The effective rate for the twelve months ended October 31, 2024 was impacted due to state and local income tax, non U.S. income inclusion, and nondeductible expenses, offset by the U.K. patent box benefit, foreign tax credit, and change in the valuation allowance.
Our year-over-year results by reportable segment follow. Our comparison of the results for the fiscal years ended October 31, 2023 and 2022 by reportable segment for the prior year comparative periods can be found in the annual report on Form 10-K for the year ended October 31, 2023.
Hardware Solutions
NA Fenestration
Net Sales. Net sales decreased $17.4 million, or 3%, for the twelve months ended October 31, 2024 compared to the same period in 2023, which was primarily driven by a $20.9 million decrease in volumes mainly due to softer market demand driven by lower consumer confidence, as well as the strategic sale of a plant in October 2024, partially offset by favorable price and surcharge impacts of $3.5 million.
Cost of Sales. Cost of sales decreased $19.4 million, or 4%, for the twelve months ended October 31, 2024 compared to the same period in 2023. Cost of sales, including labor, decreased primarily due to lower volumes and deflation in the price of raw materials during the period.
Selling, General and Administrative. Our selling, general and administrative expenses decreased by $0.3 million, or 1%, for the twelve months ended October 31, 2024 compared to the same period in 2023. This decrease was due primarily to the gain on disposition of capital assets during the twelve months ended October 31, 2024 partially offset by an increases in labor costs year-over-year.
EU Fenestration
Net Sales. Net sales decreased $20.1 million, or 8%, when comparing the twelve months ended October 31, 2024 compared to the same period in 2023, which was primarily driven by an $18.4 million decrease in volumes largely due to softer market demand driven by weaker consumer confidence and base price decreases of $4.2 million, partially offset by favorable foreign currency rate change of $2.5 million.
Cost of Sales. The cost of sales decreased $13.9 million, or 9%, for the twelve months ended October 31, 2024 compared to the same period in 2023. Cost of sales decreased primarily due to a decrease in volumes, deflation in the price of raw materials and foreign currency impacts.
Selling, General and Administrative. Our selling, general and administrative expense decreased $1.0 million, or 3%, for the twelve months ended October 31, 2024 compared to the same period in 2023. The decrease is primarily due to a decrease in professional fees, labor costs partially offset by a decrease in professional fees and foreign currency impacts year-over-year.
What changed in the latest 10-Q
Risk Factors
Full comparison: every changed paragraph (1)
In addition to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 (Part I, Item 1A), additional risks and uncertainties are asset forth below.
Management's Discussion & Analysis (MD&A)
Largest changes
see in full comparisonCost ofNet Sales.Cost ofNet salesincreaseddecreased$16.9$6.2million,million for the three months endedAprilJuly30,31, 2026 compared to the same period in 2025. Theincreasedecrease was primarily due tohighera net unfavorable impact from tariff-relatedcosts,activity,unfavorableconsistingforeignofcurrencyapproximatelymovements,$9.1othermillioncostofinflationtariff-relatedand increases in transportation costs,refunds, partially offset bythe$0.2impactmillion oflowertariff-relatedsalesamountsvolumescharged.mentionedTheseabove.impacts were partially offset by $3.1 million of favorable price, surcharge and raw material index adjustments.
Cost of Sales. Cost of sales increasedsee in full comparison$16.8$8.6 million, or6%,2%, for thesixnine months endedAprilJuly30,31, 2026 as compared to the same period in 2025. The increase was primarily due tohighertariff-relatedcosts, unfavorableimpacts, foreign currencymovements, other cost inflationmovements andincreases inhigher transportation and raw material costs, partially offset bythetariff-relatedimpactrefundsofand lower costs associated with reduced salesvolumes mentioned above.volumes.
“Net Sales. Net sales decreased $1.7 million, for the nine months ended July 31, 2026 compared to the same period in 2025, primarily due to a $10.7 million unfavorable impact from lower volume and a $1.7 million net unfavorable impact from tariff-related activity, consisting of $9.1 million of tariff-related refunds, partially offset by $7.4 million of tariff-related amounts charged. These impacts were partially offset by $6.5 million of favorable foreign currency movements and $4.2 million of favorable price, surcharge and raw material index adjustments.”see in full comparison
Income Taxes. We recorded an income tax expense ofsee in full comparison$3.8$7.9 million on pre-tax income of$7.1$34.4 million for the three months endedAprilJuly30,31, 2026, an effective rate of52.9%,23.0%, and income taxexpensebenefit of$6.3$8.2 million on pre-taxincomeloss of$26.8$284.2 million for the three months endedAprilJuly30,31, 2025, an effective rate of23.5%.2.9%. The increase in the effective tax rate compared to the prior year was primarily driven by$2.1themillionabsence ofdiscretethetax items including equity-based compensation award activity, state deferred tax remeasurement from legal entity reorganization activities, and changes in reserves for uncertain tax positions,impairment whichhad a disproportionate impact on the rate given the lower pre-tax earningsoccurred in thecurrentpriorperiod.year.
“Net Sales. Net sales increased $4.5 million, or 1%, for the six months ended April 30, 2026 compared to the same period in 2025, which was primarily attributable to $10.6 million favorable tariff-related pricing adjustments, a $1.6 million favorable impact from price and raw material index adjustments, and an $6.7 million favorable impact from foreign currency rate changes, partially offset by a $13.4 million decline in volume due to softer market demand.”see in full comparison
see in full comparisonSelling,CostGeneralofandSales.Administrative.CostSelling,ofgeneralsalesanddecreasedadministrative expenses increased $3.5$8.2 million,or 11%,for the three months endedAprilJuly30,31, 2026 compared to the same period in 2025. Theincreasedecreaseiswas primarily due toincreaseslowerinsalesstock-based compensationvolume andmedicalfavorablecosts,tariff-related activity, including tariff-related refunds, partially offset byahigherdecreaserawin miscellaneous sellingmaterial andgeneraltransportationadministrativecostcostsandyear-over-year.increased warranty expenses.
Full comparison: every changed paragraph (51)
The following discussion and analysis contains forward-looking statements based on our current assumptions, expectations, estimates and projections about our business and the homebuilding industry, and therefore, it should be read in conjunction with our accompanying unaudited condensed consolidated financial statements and related notes as of AprilJuly 30,31, 2026, and for the three and sixnine months ended AprilJuly 30,31, 2026 and 2025, included elsewhere herein. Actual results could differ from our expectations due to several factors which include, but are not limited to: the impact of market price and demand for our products, economic and competitive conditions, capital expenditures, new technology, regulatory changes and other uncertainties. For additional information pertaining to our business, including risk factors which should be considered before investing in our common stock, refer to our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.
We are monitoring evolving U.S. and global tariff and trade policies, including court decisions invalidating certain tariffs. We are assessing the potential impact of these decisions and other trade policy developments on our operations, supply chain and cost structure and continue to work with our suppliers and customers to mitigate potential impacts on our business. We are also monitoring ongoing geopolitical tensions and conflicts in various regions of the world, including the situations in Ukraine and the Middle East,East. whichThese developments have contributed to volatility in crude oil prices, ocean and domestic freight costs and certain commodity costs and have extended shipping lead times on certain routes to and from the Middle East and Asia. They may also contribute to broader volatility in global markets, supply chains, commodity pricingchains and foreign currency exchange rates. The extent and duration of current and potential tariff measures and geopolitical developments, and the resulting impact on general economic conditions and our operations, remain uncertain and depend on various factors, including negotiations between the U.S. and affected countries, responses by other governments, potential exemptions, and the availability and cost of alternative sources of supply.
We believe the primary drivers of our operating results continue to be North American residential remodeling and replacement (R&R) and new home construction activity. In the U.K. and Continental Europe, our operating results are primarily influenced by repair, maintenance and improvement (RMI) and residential renovation activity, as well as new construction activity. We believe that housing starts and window shipments are indicators of activity levels in the homebuilding and window industries, and we use this data, as published by or derived from third-party sources, to evaluate the market. We have historically evaluated the market using data from the National Association of Homebuilders (NAHB) with regard to housing starts and R&R activity, and published reports by Ducker Worldwide, LLC (Ducker), a consulting and research firm, with regard to window shipments in the U.S.
In AprilAugust 2026, the NAHB forecasted calendar-year housing starts to be approximately 1.3 million in calendar-years 2026 and2026, 2027 and 1.4 million in calendar-year 2028. In MayAugust 2026, the Ducker forecast indicated that total window shipments are expected to decrease 3.1%4.2% in calendar-year 2026 and 1.3%1.6% in calendar-year 2027.
Three Months Ended AprilJuly 30,31, 2026 Compared to Three Months Ended AprilJuly 30,31, 2025
This table sets forth our condensed consolidated results of operations for the three-month periods ended AprilJuly 30,31, 2026 and 2025.
Net Sales. Net sales increased $0.1 million for the three months ended April 30, 2026 compared to the same period in 2025. Net sales were relatively flat, as $4.8 million favorable tariff-related pricing adjustments and a $3.3 million favorable impact from foreign currency rate changes were largely offset by a $8.6 million decline in volume due to softer market demand.
Cost ofNet Sales. Cost ofNet sales increaseddecreased $16.9$6.2 million,million for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increasedecrease was primarily due to highera net unfavorable impact from tariff-related costs,activity, unfavorableconsisting foreignof currencyapproximately movements,$9.1 othermillion costof inflationtariff-related and increases in transportation costs,refunds, partially offset by the$0.2 impactmillion of lowertariff-related salesamounts volumescharged. mentionedThese above.impacts were partially offset by $3.1 million of favorable price, surcharge and raw material index adjustments.
Selling,Cost Generalof andSales. Administrative.Cost Selling,of generalsales anddecreased administrative expenses increased $3.5$8.2 million, or 11%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increasedecrease iswas primarily due to increaseslower insales stock-based compensationvolume and medicalfavorable costs,tariff-related activity, including tariff-related refunds, partially offset by ahigher decreaseraw in miscellaneous sellingmaterial and generaltransportation administrativecost costsand year-over-year.increased warranty expenses.
Selling, General and Administrative. Selling, general and administrative expenses increased $0.2 million, or 1%, for the three months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Restructuring Charges. Restructuring charges decreased $0.9$1.1 million, or 100%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Net Sales. Net sales increased $1.0$4.9 million for the three months ended AprilJuly 30,31, 2026 compared to the same period in 20252025, primarily due to a $4.7$6.0 million of favorable impactprice, from foreign currency rate changes and a $1.5 million increase in pricesurcharge and raw material indexes,index adjustments, partially offset by a $5.2$1.0 million decreasefrom inlower volumesvolume mainlyand due$0.1 tomillion softerof marketunfavorable demand.foreign currency movements.
Cost of Sales. Cost of sales increased $1.2$4.8 million for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase was primarily due to unfavorable foreign currency rate movements and higher raw material costs, partially offset by the impact of the lower sales volumes mentioned above.volumes.
Selling, General and Administrative. Selling, general and administrative expense remainedincreased flat$1.5 million, or 7%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Net Sales. Net sales increased $6.4$8.7 million, or 7%,9%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase was primarily driven by a $4.5$5.7 million of favorable impactprice, from pricingsurcharge and raw material index adjustments,adjustments aand $1.4$3.0 million increase in volume, a $0.2 million favorable impact from foreignhigher currency rate changes, and $0.3 million of favorable tariff-related pricing adjustments.volume.
Cost of Sales. Cost of sales increased $5.3$8.1 million, or 7%,10%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. Cost of sales increased primarily due to higher sales volumes and foreignhigher currencycosts movementsassociated duringwith the period.increased level of sales.
Selling, General and Administrative. Selling, general and administrative expenses increased $3.0$1.4 million, or 28%,12%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Net Sales. Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the three months ended AprilJuly 30,31, 2026 and 2025.
Selling, General and Administrative. Selling, general and administrative expenses decreased $2.4$3.6 million, or 44%,62%, for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The decrease was primarily attributable to reorganization costs incurred in the priorprior-year year period as well as higher cost allocations to the reportable segments in 2026, including for stock-based compensation and medical costs.period.
Restructuring Charges. Restructuring charges decreased 100% for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Interest Expense. Interest expense decreased $1.9$2.2 million for the three months ended AprilJuly 30,31, 2026 compared to the same period in 2025 primarily as a result of a decrease in borrowings outstanding during the three months ended AprilJuly 30,31, 2026 as compared to the prior year period.
Income Taxes. We recorded an income tax expense of $3.8$7.9 million on pre-tax income of $7.1$34.4 million for the three months ended AprilJuly 30,31, 2026, an effective rate of 52.9%,23.0%, and income tax expensebenefit of $6.3$8.2 million on pre-tax incomeloss of $26.8$284.2 million for the three months ended AprilJuly 30,31, 2025, an effective rate of 23.5%.2.9%. The increase in the effective tax rate compared to the prior year was primarily driven by $2.1the millionabsence of discretethe tax items including equity-based compensation award activity, state deferred tax remeasurement from legal entity reorganization activities, and changes in reserves for uncertain tax positions,impairment which had a disproportionate impact on the rate given the lower pre-tax earningsoccurred in the currentprior period.year.
SixNine Months Ended AprilJuly 30,31, 2026 Compared to SixNine Months Ended AprilJuly 30,31, 2025
Net Sales. Net sales decreased $1.7 million, for the nine months ended July 31, 2026 compared to the same period in 2025, primarily due to a $10.7 million unfavorable impact from lower volume and a $1.7 million net unfavorable impact from tariff-related activity, consisting of $9.1 million of tariff-related refunds, partially offset by $7.4 million of tariff-related amounts charged. These impacts were partially offset by $6.5 million of favorable foreign currency movements and $4.2 million of favorable price, surcharge and raw material index adjustments.
Net Sales. Net sales increased $4.5 million, or 1%, for the six months ended April 30, 2026 compared to the same period in 2025, which was primarily attributable to $10.6 million favorable tariff-related pricing adjustments, a $1.6 million favorable impact from price and raw material index adjustments, and an $6.7 million favorable impact from foreign currency rate changes, partially offset by a $13.4 million decline in volume due to softer market demand.
Cost of Sales. Cost of sales increased $16.8$8.6 million, or 6%,2%, for the sixnine months ended AprilJuly 30,31, 2026 as compared to the same period in 2025. The increase was primarily due to higher tariff-related costs, unfavorableimpacts, foreign currency movements, other cost inflationmovements and increases inhigher transportation and raw material costs, partially offset by thetariff-related impactrefunds ofand lower costs associated with reduced sales volumes mentioned above.volumes.
Selling, General and Administrative. Selling, general and administrative expenses increased $4.3$4.5 million, or 7%,5%, for the sixnine months ended AprilJuly 30,31, 2026 as compared to the same period in 2025. The increase is primarily due to increases in labor costs, stock-based compensation,costs and medicalother miscellaneous selling and general administrative costs year-over-year.
Restructuring Charges. Restructuring charges decreased $7.0$8.2 million, or 100%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Net Sales. Net sales remained flat for the six months ended April 30, 2026 compared to the same period in 2025, increasing $1.2 million. The slight increase was primarily due to a $8.4 million favorable impact from foreign currency rate changes and a $1.9 million favorable impact from price and raw material index adjustments, partially offset by a $8.1 million decline in volume due to softer market demand.
Cost ofNet Sales. Cost ofNet sales increased $1.3$6.0 million, or 1%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase was2025, primarily due to unfavorable$8.3 million of favorable foreign currency ratemovements changesand $8.3 million of favorable price, surcharge and raw material costindex impacts,adjustments, partially offset by the$10.6 impactmillion offrom lower volumes mentioned above.volume.
Selling,Cost Generalof andSales. Administrative.Cost Selling,of general and administrative expensesales increased $2.6$6.1 million, or 7%,2%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase iswas primarily due to increasesforeign incurrency labortranslation movements and higher raw material costs, partially offset by lower costs andassociated otherwith miscellaneousreduced sellingsales and general administrative costs year-over-year.volumes.
Selling, General and Administrative. Selling, general and administrative expense increased $4.2 million, or 7%, for the nine months ended July 31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Net Sales. Net sales increased $10.5$19.3 million, or 6%,7%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase was2025, primarily due to a $6.2$12.7 million of favorable impactprice, from pricesurcharge and raw material index adjustments, a $3.8$5.5 million increasefrom inhigher volume, a $0.3 million favorable impact from foreign currency rate changes, and $0.5$0.7 million favorable tariff-related pricingimpact adjustments.and $0.3 million of favorable foreign currency movements.
Cost of Sales. Cost of sales increased $8.4$16.5 million, or 6%,8%, for the sixnine months ended AprilJuly 30,31, 2026 compared with the same period in 2025. Cost of sales increased primarily due to higher sales volumes and unfavorablehigher costs associated with the increased level of sales, as well as tariff-related and foreign currency movements.impacts.
Selling, General and Administrative. Selling, general and administrative expense increased $4.6$6.0 million, or 20%,18%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. The increase is primarily due to increases in labor costs and other miscellaneous selling and general administrative costs year-over-year.
Net Sales. Net sales for Unallocated Corporate & Other represents the elimination of inter-segment sales for the sixnine months ended AprilJuly 30,31, 2026 and 2025.
Selling, General and Administrative. Selling, general and administrative expenses decreased $2.7$6.3 million, or 31%,43%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. This decrease is primarily attributable to a decrease in reorganization costs incurred in the prior year period as well as higher cost allocations to the reportable segments in 2026, including for stock-based compensation and medical costs.period.
Restructuring Charges. Restructuring charges decreased $1.8$2.0 million, or 100%, for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025. This decrease is primarily attributable to the restructuring of our operating segments in fiscal 2025. For additional discussion of the restructuring, see the “restructuring” section of Note 1, “Nature of Operations, Basis of Presentation and Significant Accounting Policies”.
Interest Expense. Interest expense decreased $3.7$6.0 million for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025 primarily as a result of lower borrowings outstanding during the sixnine months ended AprilJuly 30,31, 2026 as compared to the prior year period.
Income Taxes. We recorded income tax expense of $3.9$11.9 million on pre-tax income of $3.2$37.6 million for the sixnine months ended AprilJuly 30,31, 2026, an effective rate of 122.4%,31.5%, and income tax expensebenefit of $1.3$6.9 million on a pre-tax incomeloss of $6.9$277.3 million for the sixnine months ended AprilJuly 30,31, 2025, an effective rate of 18.3%.2.5%. The increase in the effective tax rate year-over-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, and changes in reserves for uncertain tax positions, whichas hadwell a disproportionate impact onas the rateabsence givenof the lowerimpairment pre-taxwhich earningsoccurred in the currentprior period.year.
Historically, our principal sources of funds have been cash on hand, cash flow from operations, and borrowings under our credit facilities. As of AprilJuly 30,31, 2026, we had $63.7$62.1 million of cash and equivalents, $660.8$618.5 million outstanding under the Facilities, $5.6$5.5 million of outstanding letters of credit, and $54.3$53.7 million outstanding under finance leases and other debt. Of the $54.3$53.7 million outstanding under finance leases and other debt, $48.6$47.9 million relates to real estate leases. We had $264.9$301.0 million available for use under the revolving credit facility at AprilJuly 30,31, 2026.
On August 1, 2024, the Amended Credit Agreement increased our borrowing capacity and established a $475 million revolving credit facility and a $500 million term loan A facility, each maturing on August 1, 2029. As of AprilJuly 30,31, 2026, we remained in compliance with all covenants under this agreement. Additional information regarding the Facilities is included in Note 5, “Debt”, to the condensed consolidated financial statements.
During the third quarter of fiscal 2026, we entered into a pay-fixed, receive-floating 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. The interest rate swap became effective on July 1, 2026 and matures on August 1, 2029.
The following table summarizes our cash flow results for the sixnine months ended AprilJuly 30,31, 2026 and 2025:
Operating Activities. Cash provided by operating activities decreased $17.3 million for the six months ended April 30, 2026 compared to the same period in 2025, resulting in cash used for operating activities of $1.3 million in 2026 compared to cash provided by operating activities of $16.0 million in 2025. The decrease was primarily driven by lower net income and unfavorable changes in working capital, including a larger increase in accounts receivable and a larger decrease in current income taxes payable, partially offset by higher depreciation and amortization expense and smaller decreases in accounts payable and accrued liabilities.
Investing Activities. Cash used for investing activities decreased $3.9 million for the six months ended April 30, 2026 compared to the same period in 2025, primarily due to lower capital expenditures, partially offset by lower proceeds from disposition of assets.
FinancingOperating Activities. Cash provided by financingoperating activities increaseddecreased $40.1$19.4 million for the sixnine months ended AprilJuly 30,31, 2026 compared to the same period in 2025, resultingto in cash provided by financing activities of $9.8$57.3 million in 2026 comparedfrom to$76.6 million. The decrease in operating cash used for financing activities of $30.3 million in 2025. The change in financing cash flowsflow was primarily drivendue byto thehigher absenceinventory, ofaccounts treasury stock repurchasesreceivable and higherincome net borrowings under our credit facilities compared to the prior year period.taxes.
Investing Activities. Cash used for investing activities decreased $7.6 million for the nine months ended July 31, 2026 compared to the same period in 2025, primarily due to lower capital expenditures, partially offset by lower proceeds from disposition of assets.
Financing Activities. Cash used for financing activities decreased $48.0 million for the nine months ended July 31, 2026 compared to the same period in 2025. The decrease was primarily driven by lower treasury stock repurchases and lower net repayments under our credit facilities compared to the prior-year period.
Our strategy for deploying cash is to invest in organic growth opportunities, develop our infrastructure, and explore strategic acquisitions. Other uses of cash include paying cash dividends to our shareholders and repurchasing our own stock. During the sixnine months ended AprilJuly 30,31, 2026 and 2025, we repatriated $16.8$40.3 million and $23.0$42.4 million, respectively, of foreign earnings from our foreign locations. We maintain cash balances in foreign countries which totaled $50.3$48.4 million as of AprilJuly 30,31, 2026.
For a description of our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. Our critical accounting policies and estimates have not changed materially during the sixnine months ended AprilJuly 30,31, 2026.
NX insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding NX (13F)
None of the 59 investors we track reported a position in their latest 13F.