Quanex Building Products (NX) investor relations material

Executive summary

• Net sales grew 2.3% year-over-year to $409.1 million for Q1 2026, driven by FX translation, tariff pass-throughs, and favorable pricing, partially offset by lower volumes amid soft market demand and macroeconomic headwinds.

• Reported net loss narrowed to $4.1 million from $14.9 million in the prior year, reflecting improved operating performance and the absence of restructuring charges.

• The company completed the integration of Tyman plc, restructuring its segments into Hardware Solutions, Extruded Solutions, and Custom Solutions.

• Long-term fundamentals for residential housing remain constructive, with stabilization in inflation and expectations of Fed rate cuts.

• Strategic focus remains on operational improvements, new product development, and targeted bolt-on acquisitions to support growth.

Financial highlights

• Net sales for Q1 2026 were $409.1 million, up 2.3% year-over-year, mainly due to FX translation and tariff pass-through.

• Reported net loss was $4.1 million ($0.09 per diluted share), improved from a $14.9 million loss ($0.32 per share) in Q1 2025.

• Adjusted net loss was $0.3 million ($0.01 per share), compared to adjusted net income of $9 million ($0.19 per share) last year.

• Adjusted EBITDA was $27.4 million, down from $38.5 million, with margin declining to 6.7% from 9.6% year-over-year.

• Cash used by operating activities was $20.2 million; free cash flow was -$31.5 million, reflecting typical Q1 seasonality and the impact of the Tyman acquisition.

Outlook and guidance

• Fiscal 2026 net sales expected at $1.84–$1.87 billion, with adjusted EBITDA of $240–$245 million.

• Gross margin projected at 28–28.5%, SG&A at $295–$300 million, CapEx at $70–$75 million, and free cash flow around $100 million.

• Q2 2026 revenue expected to rise 12–14% sequentially, with adjusted EBITDA margin up 500–550 basis points.

• Second half of 2026 anticipated to show margin expansion, especially as Monterrey plant issues are resolved.

• Focus remains on cash generation, debt repayment, and opportunistic share repurchases.