QUANEX Posts $0.79 Adjusted EPS as Margins Widen, Repays $42M Debt
Quanex reported fiscal third-quarter net sales of $501.8 million, up 1.3%, swinging to a $26.5 million profit after last year's goodwill writedown.
Quanex Building Products (NX) reported results for the three months ended July 31, 2026, with net sales of $501.8 million, up 1.3% from $495.3 million a year earlier, and net income of $26.5 million, or $0.58 per diluted share, against a loss of $276.0 million a year ago that included a $302.3 million non-cash goodwill impairment. The company also repaid $42.25 million of debt during the quarter.
On an adjusted basis, earnings came in at $0.79 per diluted share versus $0.69 last year, with adjusted EBITDA of $72.7 million and an adjusted EBITDA margin of 14.5%, up from 14.2%. Gross margin widened to 28.2% from 27.9%. Free cash flow was $47.8 million, compared with $46.2 million a year ago.
The nine-month picture is weaker. Adjusted diluted EPS fell to $1.03 from $1.47, adjusted EBITDA dropped to $144.3 million from $172.0 million, and the adjusted EBITDA margin narrowed to 10.5% from 12.8% despite sales rising to $1.37 billion.
By segment, Hardware Solutions saw net sales fall 2.7% on lower volumes and IEEPA tariff reimbursements to customers, Extruded Solutions grew 2.8% as pricing more than offset weaker volumes, and Custom Solutions rose 8.5% on higher volume and better pricing. Consolidated earnings benefited from improved pricing plus lower depreciation, amortization and interest expense.
Chairman, President and CEO George Wilson said volumes continued to track normal seasonality patterns and that the company made meaningful progress addressing the price versus cost imbalance that hurt second-quarter margins. He added that inflationary pressures tied to macroeconomic concerns and the conflict in the Middle East persist, though the initial rate and magnitude of these pressures have somewhat subsided.
Total debt stood at $672.2 million at quarter-end, with a net debt to LTM adjusted EBITDA leverage ratio of 2.8x. LTM adjusted EBITDA was $215.2 million and LTM net income $45.4 million. Liquidity rose 10.5% to $363.1 million, including $62.1 million of cash.
Quanex bought back 99,786 shares for roughly $1.7 million at an average price of $17.10 during the quarter, leaving about $28.7 million under the $75 million authorization approved in December 2021. Management said it will keep prioritizing debt repayment and opportunistic repurchases in the fourth quarter.
A conference call is scheduled for September 4, 2026 at 11:00 a.m. ET.
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