Executive Summary

Q4 2024 revenue rose 66.6% year over year to $492.2M on the first-quarter contribution from the Tyman acquisition; GAAP EPS was ($0.30) due to acquisition-related items, while adjusted EPS was $0.61; adjusted EBITDA increased 59.6% to $81.1M .
Management said Tyman integration is ahead of schedule, synergy capture is on plan with high confidence in the $30M target, and the company will unveil a new three-segment structure (Hardware, Extruded, Custom Solutions) at its Feb 6, 2025 Investor Day .
Deleveraging started with $53.75M of debt repaid in Q4; liquidity stood at $343.3M at Oct 31; reported Net Debt/LTM Adj. EBITDA was 3.7x and covenant leverage was 2.3x (2.1x incl. full cash), reflecting pro forma and lease-calculation differences .
Near-term outlook: Q1 FY25 revenue expected up 50–52% YoY (Tyman contribution), adjusted EBITDA margin up ~25 bps YoY; interest expense ~$15M in Q1; full FY25 guidance to be provided at Investor Day—key stock catalyst alongside synergy updates and operating model transition .

What Went Well and What Went Wrong

What Went Well
- Tyman integration is “ahead of schedule,” with expected synergies being realized; management expressed strong confidence in achieving the $30M synergy target .
- Record adjusted EBITDA for FY24 ($182.4M) and consolidated margin expansion for the full year, aided by Tyman and cost controls; Q4 adjusted EBITDA rose to $81.1M .
- Portfolio/capacity optimization: sold the Richmond, KY vinyl extrusion facility (approx. $5M gain) and exited low-margin North American vinyl fencing; Tyman actions included exiting low-margin China business and closing the legacy London office, driving margin improvement .
What Went Wrong
- Legacy demand remained soft across markets; excluding Tyman, Q4 net sales would have declined 2.3% YoY; NA Fenestration revenue down 4.7% in Q4, and EU Fenestration down YoY for FY24 .
- Q4 operating income fell to $2.8M and GAAP EPS to ($0.30), driven by acquisition-related amortization and fees (e.g., ~$29.1M inventory/AR step-up amortization; ~$26.2M transaction/advisory), and other adjustments .
- Cash from operations/FCF weakened in Q4 ($5.5M CFO; ($8.2)M FCF) due to integration and working capital dynamics (make-to-stock at Tyman vs. make-to-order at legacy); management noted normalized FY24 FCF would be ~ $89M absent one-time Tyman costs .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($M)	$295.5	$280.3	$492.2
GAAP Diluted EPS ($)	$0.83	$0.77	($0.30)
Adjusted Diluted EPS ($)	$0.95	$0.73	$0.61
Gross Margin %	27.1%	25.3%	23.8%
Operating Income ($M)	$39.5	$23.4	$2.8
Net Income ($M)	$27.4	$25.4	($13.9)
Adjusted EBITDA ($M)	$50.8	$42.0	$81.1
Adjusted EBITDA Margin %	17.2%	15.0%	16.5%
Cash from Operations ($M)	$44.5	$46.4	$5.5
Free Cash Flow ($M)	$29.6	$40.1	($8.2)

Segment net sales ($M):

Segment	Q4 2023	Q3 2024	Q4 2024
NA Fenestration	$180.4	$170.3	$172.0
EU Fenestration	$64.2	$59.6	$65.1
NA Cabinet Components	$51.9	$51.4	$52.8
Tyman	—	—	$203.4
Unallocated/Elims	($1.0)	($1.0)	($1.1)
Total	$295.5	$280.3	$492.2

Segment adjusted EBITDA ($M):

Segment	Q4 2023	Q3 2024	Q4 2024
NA Fenestration	$29.6	$24.7	$30.1
EU Fenestration	$16.7	$15.3	$16.5
NA Cabinet Components	$5.1	$3.4	$3.3
Tyman	—	—	$34.5
Corp & Other	($0.7)	($1.3)	($3.3)
Total	$50.8	$42.0	$81.1

Key balance sheet and cash metrics:

KPI	Q4 2023	Q3 2024	Q4 2024
Net Debt ($M)	$11.5	($39.0)	$679.2
Liquidity ($M)	—	—	$343.3
Net Debt / LTM Adj. EBITDA (x)	—	—	3.7x
Debt Covenant Leverage Ratio (x)	—	—	2.3x (2.1x incl. full cash)
Debt repaid in Q4 ($M)	—	—	$53.75

Estimate comparisons: S&P Global Wall Street consensus was not available at query time; therefore, vs-estimate comparisons are unavailable. We will update when S&P data becomes accessible.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue growth YoY	Q1 FY25	N/A	Up 50%–52% vs Q1 FY24	New
Adjusted EBITDA margin YoY	Q1 FY25	N/A	Up ~25 bps vs Q1 FY24	New
Tax rate	Q1 FY25	N/A	~23.5%	New
Interest expense	Q1 FY25	N/A	~ $15M	New
FY25 detailed outlook	FY25	N/A	To be provided Feb 6, 2025 Investor Day	New
Quarterly dividend	Dec 2024	$0.08 prior	$0.08 payable Dec 31, 2024	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 and Q3)	Current Period (Q4)	Trend
Tyman integration & synergies	Q2: Expect close 2H24; reaffirmed FY24 guidance; targeted synergy capture underway . Q3: Integration underway; layering Tyman into FY24 view .	Integration ahead of schedule; strong confidence in $30M synergies; actions include London office consolidation and exiting low-margin China .	Positive momentum; execution accelerating.
Operating model/segments	Q2/Q3: Legacy segments by geography/end-market .	Moving to three global segments: Hardware, Extruded, Custom Solutions; designed to share best practices and maximize synergies .	Structural change as catalyst.
Macro demand/seasonality	Q2: NA seasonal uptick; Europe soft . Q3: Demand soft YoY; expected seasonality .	Expect sluggish Q1; rebound 2H FY25 with improved consumer confidence and lower rates .	Near-term cautious; 2H improvement expected.
Pricing	Q2/Q3: Mixed by segment; index impacts in cabinets .	Pricing likely neutral to up; cautious given tariffs, inflation, input costs .	Balanced/guarded.
Supply chain/tariffs	Q3: Integration planning; general soft demand .	Tyman supply chain viewed as resilient; cabinet segment may benefit from tariffs; prepared for trade volatility .	Risk-managed; potential upside in cabinets.
Portfolio optimization	Q2/Q3: No specific disposals .	Evaluating entire portfolio; potential divestiture of non-core assets .	Potential pruning to enhance margins.
Capacity optimization	Q2/Q3: Plant closure costs noted .	Sold Richmond, KY vinyl extrusion (gain ~$5M) and exited low-margin vinyl fencing .	Active footprint optimization.
Regional trends (EU vs NA)	Q2/Q3: EU soft; FX effects; NA soft YoY .	EU: slight confidence rebound, tempered by geopolitics; NA could recover faster with rate cuts .	EU stabilizing; NA poised to accelerate.

Management Commentary

“We are restructuring our operating segments…centered around our core competencies in materials sciences and manufacturing…we will operate…in 3 new segments: hardware solutions, extruded solutions and custom solutions.”
“I’m pleased to report that the [Tyman] integration is ahead of schedule and the expected synergies are being realized as planned.”
“We successfully sold the Richmond, Kentucky vinyl extrusion facility during the fourth quarter for a gain of approximately $5 million…We also sold our North American vinyl fencing business…at a very low margin.”
“We were able to repay $53.75 million in debt during the fourth quarter of 2024.”
“On a consolidated basis, we expect revenue to be up 50% to 52% in the first quarter of 2025…Adjusted EBITDA margin is expected to be up about 25 basis points…tax rate of 23.5%…interest expense of approximately $15 million.”

Q&A Highlights

Portfolio review: Management is assessing the entire portfolio post-Tyman; potential divestitures of non-core assets to improve margins are under consideration .
EU margins sustainability: Leadership sees additional runway for internal projects and global best-practice sharing; margin could benefit further as volumes recover .
Operating leverage: Incremental margins vary by product line; extrusions should reap the most benefit as volumes improve .
Synergies: Confidence is “very strong” in achieving the $30M target and potentially exceeding it; consolidation and China exits already contributing .
Tariffs/supply chain: Tyman supply chain is positioned for tariff scenarios; cabinet market could benefit from wood-product tariffs .
Interest expense: ~$15M in Q1 FY25 expected to trend down thereafter; deleveraging is a clear priority .

Estimates Context

S&P Global (Capital IQ) consensus estimates were unavailable at query time; we could not provide vs-consensus comparisons. We will update when access to S&P Global estimates is restored.
Qualitatively, the quarter included substantial acquisition-related adjustments (inventory/AR step-up amortization ~$29.1M and transaction/advisory ~$26.2M), which reduced GAAP profitability relative to adjusted results .

Key Takeaways for Investors

Tyman integration tracking ahead of plan with high confidence in $30M synergy target; early actions (office consolidation, China exit) are already aiding margins .
Operating model shift to three global solution segments should unlock best-practice sharing and synergy realization—key focus topic for Investor Day on Feb 6, 2025 .
Near-term cadence: Q1 FY25 revenue up 50–52% YoY (acquisition effect), adjusted EBITDA margin +~25 bps; expect volumes down YoY in Q1 but improving into 2H FY25 with rates/consumer confidence .
Deleveraging underway (Q4 debt repayment $53.75M) with ample liquidity ($343.3M); watch Net Debt/LTM Adj. EBITDA normalization as one-time cash costs roll off and synergy capture increases .
Legacy demand remains soft; NA Fenestration revenue down 4.7% YoY in Q4; EU FY24 revenue down with pricing pressure; however, cost control drove segment margin expansion in NA Fenestration .
GAAP-to-non-GAAP bridge is material this quarter (purchase accounting and fees); trading should focus on adjusted EBITDA/segment-level margin trajectory and synergy updates .
Potential portfolio pruning could be a medium-term catalyst for mix and margin improvement; management is actively evaluating non-core assets .

Additional Notes and Cross-References

Tyman segment revenue was down ~11% YoY in Q4 (pro forma), but with “meaningful margin expansion” driven by cost synergies and portfolio actions (no prior-year owned comp in release) .
Liquidity/covenant metrics reflect pro forma calculations (e.g., adding Tyman LTM adjusted EBITDA and synergy credit, excluding certain finance leases), explaining the difference between covenant and reported leverage .
Dividend maintained at $0.08 per share, payable Dec 31, 2024 .

Sources: Q4 press release/8-K and exhibits ; Q4 earnings call transcript ; Q3 press release –; Q2 press release –; Liquidity and leverage details .

Quanex Building Products CORP (NX)·Q4 2024 Earnings Summary