Quanex Building Products Corporation (NYSE:NX)
(“Quanex” or the “Company”) today announced its results for the
three months ended January 31, 2023.
The Company reported the following selected
financial results:
|
|
|
Three Months Ended January 31, |
($ in millions, except per share data) |
|
|
2023 |
|
2022 |
Net Sales |
|
|
$261.9 |
|
$267.0 |
Gross Margin |
|
|
$51.8 |
|
$55.2 |
Gross Margin % |
|
|
19.8% |
|
20.7% |
Net Income |
|
|
$1.9 |
|
$11.2 |
Diluted EPS |
|
|
$0.06 |
|
$0.34 |
|
|
|
|
|
|
Adjusted Net Income |
|
|
$6.1 |
|
$11.3 |
Adjusted Diluted EPS |
|
|
$0.18 |
|
$0.34 |
Adjusted EBITDA |
|
|
$20.5 |
|
$24.4 |
Adjusted EBITDA Margin % |
|
|
7.8% |
|
9.1% |
|
|
|
|
|
|
Cash Provided by (Used For)
Operating Activities |
|
|
$3.1 |
|
($21.7 |
Free Cash Flow |
|
|
($4.4) |
|
($29.0) |
(See Non-GAAP Terminology Definitions and Disclaimers section,
Non-GAAP Financial Measure Disclosure table, Selected Segment Data
table and reconciliation tables for additional information)
George Wilson, President and Chief Executive
Officer, stated, “Our results for the first quarter of 2023 were
generally as expected with the only caveat being an elevated level
of customer inventory re-balancing initiatives in our fenestration
segments. We believe we are seeing a return to what is normal
seasonality in our business. In addition to lower
market demand year-over-year, results for the quarter were impacted
by higher stock-based compensation expense from the increase in our
stock price, one-time transaction and advisory fees, increased
interest expense related to rising rates on the debt we incurred to
fund the acquisition of LMI Custom Mixing, LLC (“LMI”), and foreign
exchange translation. While results in our legacy North American
Fenestration segment were impacted by market volume declines and
customer inventory rebalancing initiatives, the LMI business
performed well and controllable operational performance in the
legacy business continues to be strong. Results in our North
American Cabinet Components segment were impacted by index related
price decreases and soft market demand; however, margins were
consistent compared to the same period of last year. Our European
Fenestration business performed well despite additional
macroeconomic headwinds, including the war in Ukraine and increased
energy costs. In fact, after adjusting for the foreign exchange
translation impact, we generated revenue growth in Europe and
margins held up nicely. As we look ahead, it is important to note
that while pricing for raw materials and related surcharges are
declining, inflationary pressures still exist in many areas. We are
focused on making sure our product pricing takes all factors into
account.
“Notwithstanding some near-term macroeconomic
challenges, our balance sheet remains strong even after accounting
for the debt we borrowed to fund the acquisition of LMI. The
integration of LMI is going well, and we have already started
realizing synergies. Despite the overall softness compared to the
same period of 2022, we were still able to pay down some debt
towards the end of the first quarter and our leverage remains
low.”
First Quarter 2023 Results
Summary
The Company reported net sales of $261.9 million
during the three months ended January 31, 2023, which represents a
decrease of 1.9% compared to $267.0 million for the same period of
2022. The decrease was mostly attributable to softer demand,
customer inventory rebalancing initiatives and foreign exchange
translation impact. Quanex realized net sales growth of 4.3% for
the first quarter of 2023 in its North American Fenestration
segment, which was driven by the contribution from LMI. Excluding
LMI, net sales in the North American Fenestration segment would
have declined by approximately 7% year-over-year. The Company
reported a decline in net sales of 12.3% in its North American
Cabinet Components segment and an increase of 3.9% in net sales in
its European Fenestration segment, excluding foreign exchange
impact. (See Sales Analysis table for additional information)
The decrease in earnings for the three months
ended January 31, 2023 was largely due to lower volumes, one-time
transaction and advisory fees, foreign exchange translation, higher
interest expense and increased stock-based compensation expense,
mostly due to stock price appreciation.
Balance Sheet & Liquidity
Update
As of January 31, 2023, the Company had total
debt of $155.1 million ($100.0 million excluding real-estate leases
that are considered “finance” leases under U.S. GAAP) and Quanex’s
leverage ratio of Net Debt to LTM Adjusted EBITDA was 0.8x (0.4x
excluding these real-estate leases). As previously disclosed, the
Company borrowed $92 million to acquire substantially all the
assets of LMI on November 1, 2022. As of January 31, 2023, the
Company’s LTM Adjusted EBITDA was $148.6 million and LTM Net
Income, the most directly comparable GAAP measure, was $79.0
million. (See Non-GAAP Terminology Definitions and
Disclaimers section, Net Debt Reconciliation table and Last Twelve
Months Adjusted EBITDA Reconciliation table for additional
information)
Quanex’s liquidity was $263.0 million as of
January 31, 2023, consisting of $43.0 million in cash on hand plus
availability under its Amended and Restated Senior Secured
Revolving Credit Facility due 2027, less letters of credit
outstanding.
Outlook
Mr. Wilson commented, “While the near-term
outlook for our business remains somewhat cautious, our long-term
view has not changed, and we believe the underlying fundamentals
for the residential housing market remain positive. Considering
these strong market fundamentals, and our belief that we have
returned to a more normalized seasonality pattern, we are
cautiously optimistic that demand will improve in the second half
of our fiscal year. That said, we are also proactively working to
adjust our cost structure to protect margins in the event that
second half improvement doesn’t materialize as currently expected.
Overall, on a consolidated basis, and assuming fundamentals do not
worsen materially, we estimate we will generate net sales of $1.12
billion to $1.16 billion, which we expect will yield approximately
$130 million to $142 million in Adjusted EBITDA* in fiscal
2023.
As always, we will stay focused on the things we
can control. Our capital allocation priorities are generating cash,
paying down debt, evaluating growth opportunities and
opportunistically buying back our stock.”
*When Quanex provides expectations for Adjusted
EBITDA on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and corresponding
GAAP measures is generally not available without unreasonable
effort. Certain items required for such a reconciliation are
outside of the Company’s control and/or cannot be reasonably
predicted or estimated, such as the provision for income taxes.
Conference Call and Webcast
Information
The Company has also scheduled a conference call
for Friday, March 10, 2023 at 11:00 a.m. ET (10:00 a.m. CT) to
discuss the release. A link to the live audio webcast will be
available on Quanex’s website at http://www.quanex.com in the
Investors section under Presentations & Events.
Participants can pre-register for the conference call using the
following link:
https://register.vevent.com/register/BIc7e66b8a6c024100847adde656098b34
Registered participants will receive an email containing
conference call details for dial-in options. To avoid delays, it is
recommended that participants dial into the conference call ten
minutes ahead of the scheduled start time. A replay will be
available for a limited time on the Company’s website at
http://www.quanex.com in the Investors section under Presentations
& Events.
About Quanex
Quanex is a global manufacturer with core
capabilities and broad applications across various end markets. The
Company currently collaborates and partners with leading OEMs to
provide innovative solutions in the window, door, vinyl fencing,
solar, refrigeration and cabinetry markets. Looking ahead,
Quanex plans to leverage its material science expertise and process
engineering to expand into adjacent markets.
For more information contact Scott Zuehlke,
Senior Vice President, Chief Financial Officer & Treasurer, at
713-877-5327 or scott.zuehlke@quanex.com.
Non-GAAP Terminology Definitions and
Disclaimers
Adjusted Net Income (defined as net income
further adjusted to exclude purchase price accounting inventory
step-ups, transaction costs, certain severance charges, gain/loss
on the sale of certain fixed assets, restructuring charges, asset
impairment charges, other net adjustments related to foreign
currency transaction gain/loss and effective tax rates reflecting
impacts of adjustments on a with and without basis) and Adjusted
EPS are non-GAAP financial measures that Quanex believes provide a
consistent basis for comparison between periods and more accurately
reflects operational performance, as they are not influenced by
certain income or expense items not affecting ongoing operations.
EBITDA (defined as net income or loss before interest, taxes,
depreciation and amortization and other, net) and Adjusted EBITDA
(defined as EBITDA further adjusted to exclude purchase price
accounting inventory step-ups, transaction costs, certain severance
charges, gain/loss on the sale of certain fixed assets,
restructuring charges and asset impairment charges) are non-GAAP
financial measures that the Company uses to measure operational
performance and assist with financial decision-making. Net
Debt is defined as total debt (outstanding balance on the revolving
credit facility plus financial lease obligations) less cash and
cash equivalents. The leverage ratio of Net Debt to LTM Adjusted
EBITDA is a financial measure that the Company believes is useful
to investors and financial analysts in evaluating Quanex’s
leverage. In addition, with certain limited adjustments, this
leverage ratio is the basis for a key covenant in the Company’s
credit agreement. Free Cash Flow is a non-GAAP measure calculated
using cash provided by operating activities less capital
expenditures. Quanex uses the Free Cash Flow metric to measure
operational and cash management performance and assist with
financial decision-making. Free Cash Flow is measured before
application of certain contractual commitments (including capital
lease obligations), and accordingly is not a true measure of the
Company’s residual cash flow available for discretionary
expenditures. Quanex believes Free Cash Flow is useful to investors
in understanding and evaluating the Company’s financial and cash
management performance. Quanex believes that the presented non-GAAP
measures provide a consistent basis for comparison between periods
and will assist investors in understanding the Company’s financial
performance when comparing results to other investment
opportunities. The presented non-GAAP measures may not be the
same as those used by other companies. Quanex does not intend for
this information to be considered in isolation or as a substitute
for other measures prepared in accordance with U.S. GAAP.
Forward Looking Statements
Statements that use the words “estimated,”
“expect,” “could,” “should,” “believe,” “will,” “might,” or similar
words reflecting future expectations or beliefs are forward-looking
statements. The forward-looking statements include, but are not
limited to, the following: impacts from public health issues
(including pandemics, such as the recent COVID-19 pandemic) on the
economy and the demand for Quanex’s products, the Company’s future
operating results, future financial condition, future uses of cash
and other expenditures, expenses and tax rates, expectations
relating to Quanex’s industry, and the Company’s future growth,
including any guidance discussed in this press release. The
statements and guidance set forth in this release are based on
current expectations. Actual results or events may differ
materially from this release. For a complete discussion of factors
that may affect Quanex’s future performance, please refer to the
Company’s Annual Report on Form 10-K for the fiscal year ended
October 31, 2022, and the Company’s Quarterly Reports on Form 10-Q
under the sections entitled “Cautionary Note Regarding
Forward-Looking Statements” and “Risk Factors”. Any forward-looking
statements in this press release are made as of the date hereof,
and Quanex undertakes no obligation to update or revise any
forward-looking statements to reflect new information or
events.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share data)(Unaudited)
|
|
Three Months Ended January 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Net sales |
|
$ |
261,916 |
|
|
$ |
267,040 |
|
Cost of sales |
|
|
210,149 |
|
|
|
211,834 |
|
Selling, general and
administrative |
|
|
36,744 |
|
|
|
30,823 |
|
Depreciation and
amortization |
|
|
10,620 |
|
|
|
10,257 |
|
Operating income |
|
|
4,403 |
|
|
|
14,126 |
|
Interest expense |
|
|
(2,259 |
) |
|
|
(523 |
) |
Other, net |
|
|
218 |
|
|
|
54 |
|
Income before income
taxes |
|
|
2,362 |
|
|
|
13,657 |
|
Income tax expense |
|
|
(453 |
) |
|
|
(2,418 |
) |
Net income |
|
$ |
1,909 |
|
|
$ |
11,239 |
|
|
|
|
|
|
Earnings per common share,
basic |
|
$ |
0.06 |
|
|
$ |
0.34 |
|
Earnings per common share,
diluted |
|
$ |
0.06 |
|
|
$ |
0.34 |
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
|
|
32,951 |
|
|
|
33,124 |
|
Diluted |
|
|
33,137 |
|
|
|
33,298 |
|
|
|
|
|
|
Cash dividends per share |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands)(Unaudited)
|
|
January 31, 2023 |
|
October 31, 2022 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
43,055 |
|
|
$ |
55,093 |
|
Accounts receivable, net |
|
|
84,672 |
|
|
|
96,018 |
|
Inventories, net |
|
|
127,735 |
|
|
|
120,890 |
|
Prepaid and other current assets |
|
|
11,146 |
|
|
|
8,664 |
|
Total current assets |
|
|
266,608 |
|
|
|
280,665 |
|
Property, plant and equipment,
net |
|
|
242,030 |
|
|
|
180,400 |
|
Operating lease right-of-use
assets |
|
|
45,996 |
|
|
|
56,000 |
|
Goodwill |
|
|
184,706 |
|
|
|
137,855 |
|
Intangible assets, net |
|
|
83,401 |
|
|
|
65,035 |
|
Other assets |
|
|
4,285 |
|
|
|
4,662 |
|
Total assets |
|
$ |
827,026 |
|
|
$ |
724,617 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
63,093 |
|
|
$ |
77,907 |
|
Accrued liabilities |
|
|
46,064 |
|
|
|
52,114 |
|
Income taxes payable |
|
|
1,624 |
|
|
|
1,049 |
|
Current maturities of long-term debt |
|
|
1,996 |
|
|
|
1,046 |
|
Current operating lease liabilities |
|
|
7,213 |
|
|
|
7,727 |
|
Total current liabilities |
|
|
119,990 |
|
|
|
139,843 |
|
Long-term debt |
|
|
151,682 |
|
|
|
29,628 |
|
Noncurrent operating lease
liabilities |
|
|
39,725 |
|
|
|
49,286 |
|
Deferred pension benefits |
|
|
- |
|
|
|
3,917 |
|
Deferred income taxes |
|
|
23,249 |
|
|
|
22,277 |
|
Other liabilities |
|
|
16,692 |
|
|
|
14,831 |
|
Total liabilities |
|
|
351,338 |
|
|
|
259,782 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
372 |
|
|
|
372 |
|
Additional paid-in-capital |
|
|
249,730 |
|
|
|
251,947 |
|
Retained earnings |
|
|
336,704 |
|
|
|
337,456 |
|
Accumulated other comprehensive loss |
|
|
(38,050 |
) |
|
|
(49,422 |
) |
Treasury stock at cost |
|
|
(73,068 |
) |
|
|
(75,518 |
) |
Total stockholders’ equity |
|
|
475,688 |
|
|
|
464,835 |
|
Total liabilities and stockholders' equity |
|
$ |
827,026 |
|
|
$ |
724,617 |
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW(In thousands)(Unaudited)
|
Three Months Ended January 31, |
|
|
2023 |
|
|
|
2022 |
|
Operating
activities: |
|
|
|
Net income |
$ |
1,909 |
|
|
$ |
11,239 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
10,620 |
|
|
|
10,257 |
|
Stock-based compensation |
|
679 |
|
|
|
552 |
|
Deferred income tax |
|
179 |
|
|
|
854 |
|
Other, net |
|
1,509 |
|
|
|
1,218 |
|
Changes in assets and liabilities: |
|
|
|
Decrease in accounts receivable |
|
20,502 |
|
|
|
8,340 |
|
Decrease (increase) in inventory |
|
645 |
|
|
|
(25,318 |
) |
Increase in other current assets |
|
(1,431 |
) |
|
|
(3,534 |
) |
Decrease in accounts payable |
|
(21,379 |
) |
|
|
(8,391 |
) |
Decrease in accrued liabilities |
|
(12,686 |
) |
|
|
(18,248 |
) |
Increase in income taxes payable |
|
536 |
|
|
|
1,391 |
|
Increase (decrease) in deferred pension benefits |
|
7 |
|
|
|
(80 |
) |
Increase in other long-term liabilities |
|
1,461 |
|
|
|
404 |
|
Other, net |
|
584 |
|
|
|
(335 |
) |
Cash provided by (used for)
operating activities |
|
3,135 |
|
|
|
(21,651 |
) |
Investing
activities: |
|
|
|
Business acquisition |
|
(92,000 |
) |
|
|
- |
|
Capital expenditures |
|
(7,582 |
) |
|
|
(7,370 |
) |
Proceeds from disposition of capital assets |
|
98 |
|
|
|
10 |
|
Cash used for investing
activities |
|
(99,484 |
) |
|
|
(7,360 |
) |
Financing
activities: |
|
|
|
Borrowings under credit facilities |
|
102,000 |
|
|
|
28,000 |
|
Repayments of credit facility borrowings |
|
(15,000 |
) |
|
|
(3,000 |
) |
Repayments of other long-term debt |
|
(579 |
) |
|
|
(228 |
) |
Common stock dividends paid |
|
(2,661 |
) |
|
|
(2,587 |
) |
Issuance of common stock |
|
99 |
|
|
|
55 |
|
Payroll tax paid to settle shares forfeited upon vesting of
stock |
|
(545 |
) |
|
|
(1,383 |
) |
Cash used for financing
activities |
|
83,314 |
|
|
|
20,857 |
|
Cash provided by financing activities |
|
997 |
|
|
|
(188 |
) |
Decrease in cash and cash
equivalents |
|
(12,038 |
) |
|
|
(8,342 |
) |
Cash and cash equivalents at
beginning of period |
|
55,093 |
|
|
|
40,061 |
|
Cash and cash equivalents at
end of period |
$ |
43,055 |
|
|
$ |
31,719 |
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONFREE CASH FLOW AND NET DEBT
RECONCILIATION(In thousands)(Unaudited)
The following table
reconciles the Company's calculation of Free Cash Flow, a non-GAAP
measure, to its most directly comparable GAAP measure. The Company
defines Free Cash Flow as cash provided by operating activities
less capital expenditures. |
|
|
|
|
|
|
|
|
|
Three Months Ended January 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Cash provided by (used for)
operating activities |
|
|
$3,135 |
|
|
|
(21,651) |
|
Capital expenditures |
|
|
|
(7,582) |
|
|
|
(7,370) |
|
Free Cash
Flow |
|
|
($4,447) |
|
|
($29,021) |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
reconciles the Company's Net Debt which is defined as total debt
principal of the Company plus finance lease obligations minus
cash. |
|
|
|
|
|
|
|
|
|
As of January 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Revolving credit facility |
|
|
$100,000 |
|
|
$63,000 |
|
Finance lease obligations
(1) |
|
|
|
55,122 |
|
|
|
15,048 |
|
Total debt (2) |
|
|
|
155,122 |
|
|
|
78,048 |
|
Less: Cash and cash
equivalents |
|
|
|
43,055 |
|
|
|
31,719 |
|
Net Debt |
|
|
$112,067 |
|
|
$46,329 |
|
|
|
|
|
|
|
(1) Includes
$53.2 million and $13.8 million in real estate lease liabilities
considered finance leases under U.S. GAAP for the three months
ended January 31, 2023 and January 31, 2022, respectively.. |
(2) Excludes outstanding
letters of credit. |
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONNON-GAAP FINANCIAL MEASURE
DISCLOSURELAST TWELVE MONTHS ADJUSTED EBITDA
RECONCILIATION(In thousands, except per share
data)(Unaudited)
Reconciliation of Last
Twelve Months Adjusted EBITDA |
|
Three Months EndedJanuary 31,
2023 |
|
Three Months EndedOctober 31,
2022 |
|
Three Months EndedJuly 31,
2022 |
|
Three Months EndedApril 30,
2022 |
|
Total |
|
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
Net income as reported |
|
$ |
1,909 |
|
|
$ |
24,667 |
|
|
$ |
25,908 |
|
|
$ |
26,522 |
|
|
$ |
79,006 |
|
Income tax expense |
|
|
453 |
|
|
|
3,329 |
|
|
|
7,801 |
|
|
|
7,879 |
|
|
|
19,462 |
|
Other, net |
|
|
(218 |
) |
|
|
(136 |
) |
|
|
(398 |
) |
|
|
(453 |
) |
|
|
(1,205 |
) |
Interest expense |
|
|
2,259 |
|
|
|
710 |
|
|
|
724 |
|
|
|
602 |
|
|
|
4,295 |
|
Depreciation and
amortization |
|
|
10,620 |
|
|
|
9,555 |
|
|
|
9,734 |
|
|
|
10,563 |
|
|
|
40,472 |
|
EBITDA |
|
|
15,023 |
|
|
|
38,125 |
|
|
|
43,769 |
|
|
|
45,113 |
|
|
|
142,030 |
|
Selling, general and
administrative(1) |
|
|
5,448 |
|
|
|
564 |
|
|
|
419 |
|
|
|
131 |
|
|
|
6,562 |
|
Adjusted EBITDA |
|
$ |
20,471 |
|
|
$ |
38,689 |
|
|
$ |
44,188 |
|
|
$ |
45,244 |
|
|
$ |
148,592 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Transaction
and advisory fees. |
QUANEX BUILDING PRODUCTS
CORPORATIONNON-GAAP FINANCIAL MEASURE
DISCLOSURE(In thousands, except per share
data)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Reconciliation of
Adjusted Net Income and Adjusted EPS |
|
January 31, 2023 |
|
January 31, 2022 |
|
|
|
NetIncome |
|
DilutedEPS |
|
NetIncome |
|
DilutedEPS |
|
Net income as reported |
|
$ |
1,909 |
|
|
$ |
0.06 |
|
|
$ |
11,239 |
|
|
$ |
0.34 |
|
|
Net income reconciling items
from below |
|
|
4,154 |
|
|
$ |
0.12 |
|
|
|
33 |
|
|
$ |
- |
|
|
Adjusted net income and
adjusted EPS |
|
$ |
6,063 |
|
|
$ |
0.18 |
|
|
$ |
11,272 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA |
|
Three Months EndedJanuary 31,
2023 |
|
Three Months EndedJanuary 31,
2022 |
|
|
|
Reconciliation |
|
|
|
Reconciliation |
|
|
|
Net income as reported |
|
$ |
1,909 |
|
|
|
|
$ |
11,239 |
|
|
|
|
Income tax expense |
|
|
453 |
|
|
|
|
|
2,418 |
|
|
|
|
Other, net |
|
|
(218 |
) |
|
|
|
|
(54 |
) |
|
|
|
Interest expense |
|
|
2,259 |
|
|
|
|
|
523 |
|
|
|
|
Depreciation and
amortization |
|
|
10,620 |
|
|
|
|
|
10,257 |
|
|
|
|
EBITDA |
|
|
15,023 |
|
|
|
|
|
24,383 |
|
|
|
|
EBITDA reconciling items from
below |
|
|
5,448 |
|
|
|
|
|
- |
|
|
|
|
Adjusted EBITDA |
|
$ |
20,471 |
|
|
|
|
$ |
24,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
Items |
|
Three Months EndedJanuary 31,
2023 |
|
Three Months EndedJanuary 31,
2022 |
|
|
|
IncomeStatement |
|
ReconcilingItems |
|
IncomeStatement |
|
ReconcilingItems |
|
Net sales |
|
$ |
261,916 |
|
|
$ |
- |
|
|
$ |
267,040 |
|
|
$ |
- |
|
|
Cost of sales |
|
|
210,149 |
|
|
|
- |
|
|
|
211,834 |
|
|
|
- |
|
|
Selling, general and
administrative |
|
|
36,744 |
|
|
|
(5,448 |
) |
(1) |
|
|
30,823 |
|
|
|
- |
|
|
EBITDA |
|
|
15,023 |
|
|
|
5,448 |
|
|
|
24,383 |
|
|
|
- |
|
|
Depreciation and
amortization |
|
|
10,620 |
|
|
|
- |
|
|
|
10,257 |
|
|
|
- |
|
|
Operating income |
|
|
4,403 |
|
|
|
5,448 |
|
|
|
14,126 |
|
|
|
- |
|
|
Interest expense |
|
|
(2,259 |
) |
|
|
- |
|
|
|
(523 |
) |
|
|
- |
|
|
Other, net |
|
|
218 |
|
|
|
(42 |
) |
(2) |
|
|
54 |
|
|
|
41 |
|
(2) |
|
Income before income
taxes |
|
|
2,362 |
|
|
|
5,406 |
|
|
|
13,657 |
|
|
|
41 |
|
|
Income tax expense |
|
|
(453 |
) |
|
|
(1,252 |
) |
(3) |
|
|
(2,418 |
) |
|
|
(8 |
) |
(3) |
|
Net income |
|
$ |
1,909 |
|
|
$ |
4,154 |
|
|
$ |
11,239 |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.06 |
|
|
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Transaction
and advisory fees. |
|
(2) Foreign
currency transaction (gains) losses. |
|
(3) Impact on a with and
without basis. |
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONSELECTED SEGMENT DATA(In
thousands)(Unaudited)
This table provides
gross margin, operating (loss) income, EBITDA, and Adjusted EBITDA
by reportable segment. Non-operating expense and income tax expense
are not allocated to the reportable segments. |
|
|
NA Fenestration |
|
EU Fenestration |
|
NA CabinetComponents |
|
UnallocatedCorp & Other |
|
Total |
Three months ended
January 31, 2023 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
152,980 |
|
|
$ |
54,952 |
|
|
$ |
54,674 |
|
|
$ |
(690 |
) |
|
$ |
261,916 |
|
Cost of sales |
|
|
124,717 |
|
|
|
37,703 |
|
|
|
48,056 |
|
|
|
(327 |
) |
|
|
210,149 |
|
Gross Margin |
|
|
28,263 |
|
|
|
17,249 |
|
|
|
6,618 |
|
|
|
(363 |
) |
|
|
51,767 |
|
Gross Margin % |
|
|
18.5 |
% |
|
|
31.4 |
% |
|
|
12.1 |
% |
|
|
|
|
19.8 |
% |
Selling, general and administrative |
|
|
13,295 |
|
|
|
7,505 |
|
|
|
4,873 |
|
|
|
11,071 |
|
|
|
36,744 |
|
Depreciation and amortization |
|
|
5,245 |
|
|
|
2,348 |
|
|
|
2,934 |
|
|
|
93 |
|
|
|
10,620 |
|
Operating income (loss) |
|
|
9,723 |
|
|
|
7,396 |
|
|
|
(1,189 |
) |
|
|
(11,527 |
) |
|
|
4,403 |
|
Depreciation and amortization |
|
|
5,245 |
|
|
|
2,348 |
|
|
|
2,934 |
|
|
|
93 |
|
|
|
10,620 |
|
EBITDA |
|
|
14,968 |
|
|
|
9,744 |
|
|
|
1,745 |
|
|
|
(11,434 |
) |
|
|
15,023 |
|
Transaction and advisory fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,448 |
|
|
|
5,448 |
|
Adjusted EBITDA |
|
$ |
14,968 |
|
|
$ |
9,744 |
|
|
$ |
1,745 |
|
|
$ |
(5,986 |
) |
|
$ |
20,471 |
|
Adjusted EBITDA Margin % |
|
|
9.8 |
% |
|
|
17.7 |
% |
|
|
3.2 |
% |
|
|
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three months ended
January 31, 2022 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
146,631 |
|
|
$ |
58,914 |
|
|
$ |
62,353 |
|
|
$ |
(858 |
) |
|
$ |
267,040 |
|
Cost of sales |
|
|
115,964 |
|
|
|
41,227 |
|
|
|
55,073 |
|
|
|
(430 |
) |
|
|
211,834 |
|
Gross Margin |
|
|
30,667 |
|
|
|
17,687 |
|
|
|
7,280 |
|
|
|
(428 |
) |
|
|
55,206 |
|
Gross Margin % |
|
|
20.9 |
% |
|
|
30.0 |
% |
|
|
11.7 |
% |
|
|
|
|
20.7 |
% |
Selling, general and administrative |
|
|
14,377 |
|
|
|
7,303 |
|
|
|
5,270 |
|
|
|
3,873 |
|
|
|
30,823 |
|
Depreciation and amortization |
|
|
4,139 |
|
|
|
2,569 |
|
|
|
3,463 |
|
|
|
86 |
|
|
|
10,257 |
|
Operating income (loss) |
|
|
12,151 |
|
|
|
7,815 |
|
|
|
(1,453 |
) |
|
|
(4,387 |
) |
|
|
14,126 |
|
Depreciation and amortization |
|
|
4,139 |
|
|
|
2,569 |
|
|
|
3,463 |
|
|
|
86 |
|
|
|
10,257 |
|
EBITDA |
|
|
16,290 |
|
|
|
10,384 |
|
|
|
2,010 |
|
|
|
(4,301 |
) |
|
|
24,383 |
|
Adjusted EBITDA |
|
$ |
16,290 |
|
|
$ |
10,384 |
|
|
$ |
2,010 |
|
|
$ |
(4,301 |
) |
|
$ |
24,383 |
|
Adjusted EBITDA Margin % |
|
|
11.1 |
% |
|
|
17.6 |
% |
|
|
3.2 |
% |
|
|
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONSALES ANALYSIS(In
thousands)(Unaudited)
|
|
Three Months Ended January 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
NA
Fenestration: |
|
|
|
|
United States -
fenestration |
$ |
120,767 |
|
|
$ |
128,367 |
|
|
International -
fenestration |
|
5,127 |
|
|
|
9,136 |
|
|
United States -
non-fenestration |
|
23,066 |
|
|
|
6,716 |
|
|
International -
non-fenestration |
|
4,020 |
|
|
|
2,412 |
|
|
|
$ |
152,980 |
|
|
$ |
146,631 |
|
EU
Fenestration:(1) |
|
|
|
|
International -
fenestration |
$ |
42,354 |
|
|
$ |
44,621 |
|
|
International -
non-fenestration |
|
12,598 |
|
|
|
14,293 |
|
|
|
$ |
54,952 |
|
|
$ |
58,914 |
|
NA Cabinet
Components: |
|
|
|
|
United States -
fenestration |
$ |
3,908 |
|
|
$ |
3,765 |
|
|
United States -
non-fenestration |
|
50,049 |
|
|
|
57,767 |
|
|
International -
non-fenestration |
|
717 |
|
|
|
821 |
|
|
|
$ |
54,674 |
|
|
$ |
62,353 |
|
Unallocated Corporate & Other: |
|
|
|
|
Eliminations |
$ |
(690 |
) |
|
$ |
(858 |
) |
|
|
$ |
(690 |
) |
|
$ |
(858 |
) |
|
|
|
|
|
Net
Sales |
$ |
261,916 |
|
|
$ |
267,040 |
|
|
|
|
|
|
(1) Reflects a
reduction of $6.0 million in revenue associated with foreign
currency exchange rate impacts for the three months ended January
31, 2023. |
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