Good day, and thank you for standing by. Welcome to the Second Quarter 2025 Quanex Building Products Corporation Earnings Conference Call. [Operator Instructions]. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Scott Zuehlke, Senior Vice President, CFO and Treasurer. Please go ahead.

Thanks for joining the call this morning. On the call with me today is George Wilson, our Chairman, President and CEO. This conference call will contain forward-looking statements and some discussion of non-GAAP measures. Forward-looking statements and guidance discussed on this call and in our earnings release are based on current expectations. . Actual results or events may differ materially from such statements and guidance, and Quanex undertakes no obligation to update or revise any forward-looking statement to reflect new information or events. For a more detailed description of our forward-looking statement disclaimer and a reconciliation of non-GAAP measures to the most directly comparable GAAP measures, please see our earnings release issued yesterday and posted to our website. I'll now turn the call over to George for his prepared remarks.

Thanks, Scott, and good morning to everyone joining the call. Overall, we are pleased with the results from our fiscal second quarter as we did see the traditional seasonal uptick and volumes were as expected despite ongoing global macroeconomic uncertainties. I'd like to start my commentary by providing an update on the status of the time and acquisition integration. We have been extremely pleased by both the depth and pace at which the integration has progressed. We have structured new operating segments, finalized and staffed our operational and commercial teams and are in the process of finalizing the back-office support teams that will service both of those groups. As a result of these efforts and as announced in our earnings release, we now expect to realize cost synergies of approximately $45 million over time, which equates to a 50% increase compared to the original target. In fact, on a run rate basis, we now expect to achieve the original $30 million of cost synergy targets by early fiscal 2026. The newly formed operating segments are functioning well, and we feel that there still is a pathway to additional cost synergies. Operationally, our strength has always been around controlling what we can control, and that cultural trait is core and foundational to what we are building. We're delighted with what the team has accomplished in the 10 months since the deal closed, and we look forward to keeping you updated on our continued operational progress. The second phase of integration is now beginning, and it will be based around four major themes: go-to-market and geographic expansion strategy, operational footprint optimization, new product and materials development; and finally, current product line portfolio analysis. Each one of these themes are most -- are more medium-term focused, but very much aligned to the profitable…

Thanks, George. On a consolidated basis, we reported net sales of $452.2 million during the second quarter of 2025, which represents an increase of approximately 70% compared to $266.2 million for the same period of 2024. The increase was primarily driven by the contribution from the time an acquisition that closed on August 1, 2024. Excluding the time and contribution, net sales would have declined by 1.4% for the second quarter of 2025, largely due to lower volume in North America. We reported net income of $20.5 million or $0.44 per diluted share during the 3 months ended April 30, 2025, compared to net income of $15.4 million or $0.46 per diluted share during the 3 months ended April 30, 2024. On an adjusted basis, net income was $27.9 million or $0.60 per diluted share during the second quarter of 2025 compared to $24 million or $0.73 per diluted share during the second quarter of 2024. The adjustments being made to EPS are as follows: transaction advisory fees and reorg costs, restructuring charges related to severance and disposal of software, amortization expense related to intangible assets and a pension settlement refund and other net adjustments related to foreign currency transaction gain or loss and effective tax rates. On an adjusted basis, EBITDA for the quarter increased by 54.7% to $61.9 million compared to $40 million during the same period of last year. The increase in net income and EBITDA for the 3 months ended April 30, 2025, was mostly attributable to the contribution from the Tyman acquisition combined with the realization of cost synergies. Now for results by operating segment. We generated net sales of $151 million in our North American Fenestration segment for the second quarter of 2025, a decrease of 5.5% compared to $159.8 million in the second…

[Operator Instructions] Our first question comes from Adam Thalhimer with Thompson Davis.

Nice quarter. Can you give a little more color on raising the synergy target from $30 million to $45 million. And I think you even said there was potential beyond that.

Yes, it's a combination of things that we've seen. Obviously, I'm very pleased about the new segments and I think even as highlighted in previous calls, that we felt once the new segments would be kind of running from an operational perspective that new opportunities for cost takeout and just being more efficient would bubble up and be able to be realized. And that's exactly what we've seen. They've been split between just more efficient in taking out head count being more streamlined in how we've built the organization as well as some additional sourcing and purchasing synergies. As I mentioned in my script, we're still a little early on new revenue synergies that will come as a result of the go-to and geographical strategy refinement. But kind of in summary, Adam, it's really just the new segments identifying and becoming very efficient in creating what we knew was going to be there. So I think that there is still some pathway going forward. Too early to tell because, again, we're fairly new into this. But again, it's just confidence on how well the teams are performing.

Okay. And then I wanted to flip the tariff issue and ask if that's actually, given your domestic manufacturing footprint, if that's actually an opportunity for you guys and if you're seeing bids related to customers looking to increase domestic sourcing?

We have. I do think it is -- I think how we've structured our supply chain and all of the work that we've done that really started kind of coming out of COVID and into some of the global supply chain challenges has really benefited us. I think that, that footprint that we have that really capitalizes on serving our customers being geographically diverse. It is starting to show some benefits as it relates to, I guess, supply chain risk mitigation for our customers. We have seen some increases in quoting opportunities and have converted and been able to execute some spot purchases, more so on the cabinet segment, that's where we've seen at first because some of the cabinet market has relied a little heavily on international and Asian sourcing. So we have seen some opportunities, and I think that will continue to present itself.

Our next question comes from Julio Romero with Sidoti & Company.

This is Justin on for Julio. Can you give us a little more meat on the bone as to where in the timing portfolio, have you been able to realize cost synergies faster than originally expected?

I think the main bucket for the increase versus the original expectation George mentioned is really on the procurement side. Once you get those 2 teams together and really start scrubbing all of that data, they just ended up being more opportunity than originally estimated. And then across what we consider the corporate bucket, which is things like finance, internal audit, HR, IT, legal, all of the above. We're seeing higher realized and potentially realized synergies out of those groups than we did originally.

Great. And then on guidance for D&A, is the $6.5 million in intangible asset amortization that was realized in 2Q a good go-forward quarterly run rate? And what do you expect for the full year D&A both on a GAAP basis and an adjusted basis?

Yes. I think so. What happened was for intangible amortization, I think 2Q is a pretty decent run rate. I think we originally guided to around $60 million for adjusted D&A for the year, which excludes intangible amortization, that's still a good number.

I'm showing no further questions at this time. I would now like to turn it back to George Wilson for closing remarks. .

Thank you for joining the call today. We look forward to providing you with another update when we report our Q3 earnings in September. Thank you. .

This concludes today's conference call. Thank you for participating. You may now disconnect.