Quanex Building Products CORPNX
Quanex Building Products CORP Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
Goodwill
The change in the carrying amount of goodwill for the years ended October 31, 2025 and 2024 was as follows (in thousands):
| Year Ended October 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Beginning balance as of November 1, 2024 and 2023 | $ | 574,711 | $ | 182,956 | |||||||
| Acquisitions | — | 385,045 | |||||||||
| Measurement period adjustments | (3,989) | — | |||||||||
| Goodwill impairment charge | (302,284) | — | |||||||||
| Foreign currency translation adjustment | 2,908 | 6,710 | |||||||||
Balance as of October 31, 2025 and 2024 | $ | 271,346 | $ | 574,711 | |||||||
In connection with our restructuring, we reassigned goodwill among certain of our reporting units using a relative fair value approach and performed a quantitative goodwill impairment test on all reporting units to determine if any impairment existed.
To estimate the fair value of our reporting units, we applied both the discounted cash flow method under the income approach and the market approach. The resulting fair value was lower than the carrying value for certain reporting units as a result of the prolonged decline in our stock price through the testing date, driven by weaker consumer confidence and high levels of uncertainty across the industry, necessitating the recognition of a non-cash goodwill impairment charge of $302.3
million, which has been recorded in the consolidated statements of (loss) income within “Goodwill impairment charges” for the year ended October 31, 2025.
As a result of the restructuring in the third quarter of 2025, we had ten reporting units, nine of which comprised our goodwill balance prior to the goodwill impairment during the nine months ended July 31, 2025. These ten reporting units were aggregated into our three reportable segments. After the goodwill impairment, seven of the reporting units comprise the remaining goodwill balance.
At our last annual test date, August 31, 2025, we evaluated the recoverability of goodwill at each of our seven reporting units with goodwill balances and determined that our goodwill was not impaired.
During the fourth quarter of 2025, after reviewing general potential indicators of impairment and noting a triggering event related to the decline in stock price, we performed an interim goodwill impairment assessment as of September 30, 2025. Based on the results of this analysis, no additional goodwill impairment was identified.
For additional information and discussion of change in reporting units and a summary of the change in the carrying amount of goodwill by segment, see Note 17, “Segment Information.” For additional discussion of our acquisition of Tyman plc and for further details on the measurement period adjustments, see Note 2, “Acquisitions.”
Identifiable Intangible Assets
Amortizable intangible assets consisted of the following as of October 31, 2025 and 2024 (in thousands):
| October 31, 2025 | October 31, 2025 | October 31, 2024 | |||||||||||||||||||||||||||
| Remaining Weighted Average Useful Life | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||||
| Customer relationships | 16 years | $ | 506,473 | $ | 141,462 | $ | 512,131 | $ | 112,748 | ||||||||||||||||||||
| Trademarks and trade names | 18 years | 240,622 | 59,833 | 243,434 | 47,685 | ||||||||||||||||||||||||
| Patents and other technology | 11 years | 26,105 | 22,768 | 25,164 | 22,387 | ||||||||||||||||||||||||
| Total | $ | 773,200 | $ | 224,063 | $ | 780,729 | $ | 182,820 | |||||||||||||||||||||
We do not estimate a residual value associated with these intangible assets. See additional disclosure at Note 1, "Nature of Operations, Basis of Presentation and Significant Accounting Policies - Restructuring."
The aggregate amortization expense associated with identifiable intangible assets for the years ended October 31, 2025, 2024, and 2023 was $39.3 million, $21.6 million and $12.1 million, respectively. During the year ended October 31, 2025, we recorded a one-time adjustment to amortization expense of $3.5 million.
Estimated remaining amortization expense, assuming current intangible balances and no new acquisitions, for future fiscal years as of October 31, 2025 (in thousands):
| Estimated Amortization Expense | |||||
| 2026 | $ | 38,873 | |||
| 2027 | 38,873 | ||||
| 2028 | 33,640 | ||||
| 2029 | 33,623 | ||||
| 2030 | 32,189 | ||||
| Thereafter | 371,939 | ||||
| Total | $ | 549,137 | |||
As discussed in Note 1, "Nature of Operations, Basis of Presentation and Significant Accounting Policies - Long-Lived Assets,” we did not record any impairment charges related to property, plant and equipment or intangible assets as a result of the restructuring in the third quarter of 2025 or the decline in stock price in the fourth quarter of 2025. We did not incur impairment losses related to our identifiable intangible assets during the years ended October 31, 2025, 2024, and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 12, 2025 | Showing above |
| 2024 | Dec 16, 2024 | |
| 2023 | Dec 15, 2023 | |
| 2022 | Dec 16, 2022 | |
| 2021 | Dec 17, 2021 | |
| 2020 | Dec 11, 2020 | |
| 2019 | Dec 12, 2019 | |
| 2018 | Dec 11, 2018 | |
| 2017 | Dec 12, 2017 | |
| 2016 | Dec 16, 2016 | |
| 2015 | Dec 15, 2015 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.