Quanex Q2 Adjusted EPS Falls 60%, Net Sales Rise 2.2% to $462.4M
NX•Quanex’s Q2 net sales reached $462.4 million, up 2.2% year-over-year, while GAAP net income tumbled to $3.4 million (7¢ EPS) with adjusted EPS of $0.25 marking a 60% decline from last year. Gross margin contracted to 25.5% from 29.0% and leverage stands at 3.1x net debt to LTM adjusted EBITDA.
1. Financial Results
For the quarter ended April 30, Quanex reported net sales of $462.4 million, representing a 2.2% increase from $452.5 million a year ago. GAAP net income fell to $3.4 million (7¢ per share), while adjusted net income was $11.3 million (25¢ per share).
2. Margin and Cost Dynamics
Gross margin declined to 25.5% from 29.0% as rapid inflationary pressures and tariff-related costs outpaced surcharges and index pricing mechanisms. Adjusted EBITDA margin contracted to 9.6% due to timing lags in cost recovery and elevated raw material and transportation expenses.
3. Balance Sheet and Outlook
As of April 30, Quanex held $715.0 million in total debt with a net debt to LTM adjusted EBITDA ratio of 3.1x and liquidity of $328.6 million. The company avoided net borrowing in Q2 through working capital management and plans to prioritize debt repayment and opportunistic share repurchases in H2.
