Overview
- Quanex reported fiscal third-quarter sales of $501.8 million, adjusted net income of $36 million (adjusted EPS $0.79) and adjusted EBITDA of $72.7 million, marking a return to profitability after the prior-year loss.
- The prior-year Q3 loss was largely the result of a $302.3 million non-cash goodwill impairment tied to a business resegmentation, a charge that did not recur in this quarter.
- Pricing rose about 3% and helped lift gross margin to 28.2% and adjusted EBITDA margin to 14.5%, while overall volumes were roughly flat and tariff reimbursements reduced revenue by about 2%.
- Quarterly free cash flow was $47.8 million and the company used that cash to repay $42.25 million of debt, cutting its company-defined net-debt-to-LTM adjusted EBITDA ratio to about 2.8x and leaving liquidity near $363.1 million.
- Management is guiding modest revenue growth of 2%–3% and further margin expansion for the fourth quarter, but it warned that uneven North American and European housing demand and soft volumes in Hardware and Extruded segments must stabilize for gains to stick.