Quanex Building Products Corporation

Background

On September 4, 2025, after the market closed, Quanex announced financial results for the third quarter of the 2025 fiscal year. Among other things, the Company disclosed “operational issues related to the legacy Tyman window and door hardware business in Mexico that are ongoing” which “impacted results more than expected during the third quarter of 2025.” Specifically, the Company reported a diluted EPS of ($6.04), compared to $0.77 in the prior year period and an adjusted EBIDTA of $70.30. The Company further disclosed that it was “adjusting for lower expected volumes and pushing out the timing of when [it] expect[s] to realize procurement savings” from the integration of the Tyman business.

Then, on September 5, 2025, the Company held an earnings call pursuant to the Company’s third quarter 2025 financial results. During the earnings call, Chief Executive Officer, George Wilson (“Wilson”) explained “operational challenges” in the Tyman facility in Mexico “negatively impacted EBITDA in the Hardware Solutions segment by almost $5 million in the third quarter alone.” Wilson further explained that the issue was previously “identified midyear” as it got “deeper into the integration” with Tyman, and described how the systems used to “anticipate and plan for tooling repairs” were significantly deficient, indicating it was near “nonexistent.” Wilson stated because Quanex was “underinvested” in “the tooling condition and the equipment condition” it “had to make some changes and fix some things before it was catastrophic.”

On this news, Quanex’s stock price fell $2.73, or 13.1%, to close at $18.18 per share on September 5, 2025, on unusually heavy trading volume. The stock price continued to decline on the subsequent trading day, falling $1.98 or 10.9%, to close at $16.20 per share on September 8, 2025, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s procedures and policies regarding tooling and equipment maintenance in its Tyman Mexico facility were significantly “underinvested”; (2) as a result, the Company’s tooling and equipment conditions had significantly degraded to near “catastrophic” levels; (3) that, as a result of the foregoing, the Company was likely to incur significant costs, “pushing out the timing” of expected benefits from the Tyman integration; (4) that Quanex had previously identified the foregoing issues; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.