Margin Expansion Continues
Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the
“Company”) today announced its results for the quarter ended July
31, 2016.
Third Quarter 2016
Highlights
- Net sales increased 38% to $248.1 million compared to $180.2
million in Q3 2015
- Loss from continuing operations of $4.0 million, driven largely
by interest expense related to the debt refinancing, compared to
income from continuing operations of $6.5 million in Q3 2015
- Adjusted EBITDA increased 32% to $33.1 million versus $25.1
million in Q3 2015
- Debt refinancing complete, significantly reducing future annual
interest expense
- Year-to-date cash provided by operating activities increased
78% to $49.1 million compared to $27.5 million during the same
period last year
Bill Griffiths, Chairman, President and Chief
Executive Officer, commented, “Our ongoing focus on improved
profitability and margin expansion at the operational level through
efficiency gains continues to be effective. In fact, the
third quarter marks the fourth consecutive quarter of margin
expansion at the operational level. Cash generation was solid
during the quarter, and as a result, our leverage ratio is now
below 2.5x and we expect further improvement in the fourth quarter.
The recent refinancing of our debt not only reduces future
annual interest expense by approximately $13 million, it also
provides us with sufficient flexibility and a capital structure
that enables us to better manage our business over the coming
years.”
Third Quarter 2016 Results
Summary
|
|
Three Months Ended July 31, 2016 |
|
Three Months Ended July 31, 2015 |
(In thousands, except
per share data) |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
Net
sales |
|
$ |
248,085 |
|
|
$ |
- |
|
|
$ |
248,085 |
|
|
$ |
180,206 |
|
|
$ |
- |
|
|
$ |
180,206 |
|
Cost of
sales (1) |
|
|
186,631 |
|
|
|
(67 |
) |
|
|
186,564 |
|
|
|
136,853 |
|
|
|
(2,930 |
) |
|
|
133,923 |
|
Selling,
general and administrative (2) |
|
|
28,551 |
|
|
|
(109 |
) |
|
|
28,442 |
|
|
|
25,023 |
|
|
|
(3,824 |
) |
|
|
21,199 |
|
EBITDA |
|
|
32,903 |
|
|
|
176 |
|
|
|
33,079 |
|
|
|
18,330 |
|
|
|
6,754 |
|
|
|
25,084 |
|
Depreciation and amortization |
|
|
12,973 |
|
|
|
- |
|
|
|
12,973 |
|
|
|
8,502 |
|
|
|
- |
|
|
|
8,502 |
|
Operating income |
|
|
19,930 |
|
|
|
176 |
|
|
|
20,106 |
|
|
|
9,828 |
|
|
|
6,754 |
|
|
|
16,582 |
|
Interest
(expense) benefit (3) |
|
|
(22,200 |
) |
|
|
16,677 |
|
|
|
(5,523 |
) |
|
|
(338 |
) |
|
|
- |
|
|
|
(338 |
) |
Other,
net (4) |
|
|
(2,523 |
) |
|
|
2,239 |
|
|
|
(284 |
) |
|
|
566 |
|
|
|
(492 |
) |
|
|
74 |
|
(Loss)
income before income taxes |
|
|
(4,793 |
) |
|
|
19,092 |
|
|
|
14,299 |
|
|
|
10,056 |
|
|
|
6,262 |
|
|
|
16,318 |
|
Income
tax benefit (expense) (5) |
|
|
817 |
|
|
|
(4,629 |
) |
|
|
(3,812 |
) |
|
|
(3,585 |
) |
|
|
(1,648 |
) |
|
|
(5,233 |
) |
(Loss)
income from continuing operations |
|
$ |
(3,976 |
) |
|
$ |
14,463 |
|
|
$ |
10,487 |
|
|
$ |
6,471 |
|
|
$ |
4,614 |
|
|
$ |
11,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share from continuing operations (6) |
|
$ |
(0.12 |
) |
|
|
|
$ |
0.30 |
|
|
$ |
0.19 |
|
|
|
|
$ |
0.32 |
|
|
(1) Cost
of sales adjustments relate solely to purchase price accounting
inventory step-up impact from HL Plastics acquisition. |
(2)
Selling, general and administrative adjustments are for acquisition
related transaction costs. |
(3)
Interest expense adjustments relate to write off of deferred loan
costs, unamortized original issuance discount, and prepayment call
premium related to debt refinance. |
(4) Other,
net adjustments relate to foreign currency transaction gains
(losses). |
(5)
Effective tax rate reflects impacts of adjustments on a with and
without basis. |
(6)
Adjusted EPS is calculated using diluted shares outstanding of 34.5
million shares for three months ended July 31, 2016. |
|
Quanex reported net sales of $248.1 million for the three months
ended July 31, 2016, an increase of 38% compared to $180.2 million
for the three months ended July 31, 2015. The increase was
primarily driven by revenue generated from the acquisitions of HL
Plastics and Woodcraft Industries in 2015, partially offset by
foreign exchange translation impact. (See Sales Analysis
table for additional information).
Adjusted EBITDA increased to $33.1 million
during the third quarter, compared to $25.1 million during the same
quarter of 2015. Margin expansion continues due to the
successful implementation of several ongoing operational
initiatives that are designed to reduce costs while improving
productivity. For its “legacy” U.S. windows components
business, the Company realized EBITDA margin improvements of
approximately 140 basis points during the three months ended July
31, 2016, and approximately 300 basis points for the nine months
ended July 31, 2016. (See Non-GAAP Financial Measure
Disclosure table and Selected Segment Data table for additional
information)
As of July 31, 2016, Quanex’s leverage ratio of
Net Debt to LTM Pro Forma Adjusted EBITDA was 2.4x. This
leverage ratio uses LTM Pro Forma Adjusted EBITDA, which is a
non-GAAP measure that, in accordance with the Company’s credit
facility, assumes the acquisitions of HL Plastics and Woodcraft
Industries occurred at a date prior to the actual date of
acquisition, and thus includes pro forma adjustments to calculate
the trailing twelve months of EBITDA including the HL Plastics and
Woodcraft Industries acquisitions. (See Non-GAAP Financial
Measure Disclosure table for additional information)
On July 29, 2016, and as previously disclosed,
Quanex entered into new senior secured credit facilities (the “New
Senior Credit Facilities”) that mature in 2021 and provide for
aggregate borrowings of $450 million, comprised of a $300 million
revolving credit facility and a $150 million Term Loan A. The
New Senior Credit Facilities replaced the Company’s previous $310
million Term Loan B and $100 million Asset-Based Lending facility.
Borrowings under the New Senior Credit Facilities will bear
interest on a tiered rate based on Quanex’s consolidated leverage
ratio and was initially set at LIBOR plus 200 basis points,
reducing the Company’s credit spread by approximately 375 basis
points. Based on current debt outstanding, the New Senior
Credit Facilities reduce Quanex’s future annual interest expense by
approximately $13 million, greater than a 60%
reduction.
Recent Events
The Company’s Board of Directors declared a
quarterly cash dividend of $0.04 per share on Quanex’s common
stock, payable September 30, 2016, to shareholders of record on
September 16, 2016.
Conference Call and Webcast
Information
The Company has scheduled a conference call for
Tuesday, September 6, 2016, at 5:00 p.m. ET (4:00 p.m. CT).
To participate in the conference call dial (877) 388-2139 for
domestic callers and (541) 797-2983 for international callers, in
both cases using the conference passcode 60445165, and ask for the
Quanex call a few minutes prior to the start time. A link to
the live audio webcast will also be available on the Company’s
website at http://www.quanex.com in the Investors section under
Presentations & Events. A telephonic replay of the call
will be available approximately two hours after the live broadcast
ends and will be accessible through September 13, 2016. To
access the replay dial (855) 859-2056 for domestic callers and
(404) 537-3406 for international callers, in both cases referencing
conference passcode 60445165.
About Quanex
Quanex Building Products Corporation is an
industry-leading manufacturer of components sold to Original
Equipment Manufacturers (OEMs) in the building products
industry. Quanex designs and produces energy-efficient
fenestration products in addition to kitchen and bath cabinet
components.
For more information contact Scott Zuehlke, Vice
President of Investor Relations & Treasurer, at 713-877-5327 or
scott.zuehlke@quanex.com.
Non-GAAP Terminology Definitions and
Disclaimers
Each of the Non-GAAP measures discussed in this
Press Release are defined below. More information and
reconciliations related to each of these measures can be found in
the tables that accompany this Press Release.
EBITDA for each reported period is defined as
net income or loss before interest, taxes, depreciation and
amortization and other, net.
Adjusted EBITDA for each reported period is
defined as EBITDA excluding transaction costs and purchase price
accounting adjustments related to inventory step-ups.
LTM Pro Forma Adjusted EBITDA is defined as
Adjusted EBITDA for the past twelve months, assuming that the
acquisitions of HL Plastics and Woodcraft Industries occurred at a
date prior to the actual date of acquisition and thus includes pro
forma adjustments to calculate the trailing twelve months of EBITDA
including the HL Plastics and Woodcraft Industries
acquisitions. These adjustment items are not historical in
nature and therefore cannot be reconciled to a comparable GAAP
measure.
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, future operating results of Quanex, the future
financial condition of Quanex, future uses of cash and other
expenditures, expenses and tax rates, expectations relating to the
Company’s industry, and Quanex’s future growth, including any
guidance discussed in this press release. Guidance is a
forward-looking estimate of performance and may not be indicative
of actual results. The statements and guidance set forth in
this release are based on current expectations. Actual results or
events may differ materially from this release. Factors that could
impact future results may include, without limitation, the effect
of both domestic and global economic conditions, the impact of
competitive products and pricing, the availability and cost of raw
materials, and customer demand. For a more complete discussion of
factors that may affect the Company’s future performance, please
refer to the Company’s Annual Report on Form 10-K for the fiscal
year ended October 31, 2015, under the sections entitled
“Cautionary Note Regarding Forward-Looking Statements” and “Risk
Factors,” and in Quanex’s other documents filed with the Securities
and Exchange Commission from time to time. Any
forward-looking statements in this press release are made as of the
date hereof, and Quanex Building Products Corporation undertakes no
obligation to update or revise any forward-looking statements to
reflect new information or events.
|
QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(LOSS) |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
248,085 |
|
|
$ |
180,206 |
|
|
$ |
679,013 |
|
|
$ |
450,069 |
|
|
Cost of
sales |
|
|
186,631 |
|
|
|
136,853 |
|
|
|
522,476 |
|
|
|
353,469 |
|
|
Selling,
general and administrative |
|
|
28,551 |
|
|
|
25,023 |
|
|
|
88,430 |
|
|
|
64,157 |
|
|
Depreciation and amortization |
|
|
12,973 |
|
|
|
8,502 |
|
|
|
39,759 |
|
|
|
24,541 |
|
|
Operating income |
|
|
19,930 |
|
|
|
9,828 |
|
|
|
28,348 |
|
|
|
7,902 |
|
|
Interest
expense |
|
|
(22,200 |
) |
|
|
(338 |
) |
|
|
(34,324 |
) |
|
|
(624 |
) |
|
Other,
net |
|
|
(2,523 |
) |
|
|
566 |
|
|
|
(4,036 |
) |
|
|
300 |
|
|
(Loss)
income before income taxes |
|
|
(4,793 |
) |
|
|
10,056 |
|
|
|
(10,012 |
) |
|
|
7,578 |
|
|
Income
tax benefit (expense) |
|
|
817 |
|
|
|
(3,585 |
) |
|
|
2,722 |
|
|
|
(1,907 |
) |
|
(Loss)
income from continuing operations |
|
|
(3,976 |
) |
|
|
6,471 |
|
|
|
(7,290 |
) |
|
|
5,671 |
|
|
Income
from discontinued operations, net of taxes |
|
|
- |
|
|
|
456 |
|
|
|
- |
|
|
|
479 |
|
|
Net
(loss) income |
|
$ |
(3,976 |
) |
|
$ |
6,927 |
|
|
$ |
(7,290 |
) |
|
$ |
6,150 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
Income per common share: |
|
|
|
|
|
|
|
|
|
From
continuing operations |
|
$ |
(0.12 |
) |
|
$ |
0.20 |
|
|
$ |
(0.22 |
) |
|
$ |
0.17 |
|
|
From
discontinued operations |
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
|
(Loss)
income per common share, basic |
|
$ |
(0.12 |
) |
|
$ |
0.21 |
|
|
$ |
(0.22 |
) |
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
(loss) income per common share: |
|
|
|
|
|
|
|
|
|
From
continuing operations |
|
$ |
(0.12 |
) |
|
$ |
0.19 |
|
|
$ |
(0.22 |
) |
|
$ |
0.17 |
|
|
From
discontinued operations |
|
$ |
- |
|
|
$ |
0.01 |
|
|
$ |
- |
|
|
$ |
0.01 |
|
|
(Loss)
income per common share, diluted |
|
$ |
(0.12 |
) |
|
$ |
0.20 |
|
|
$ |
(0.22 |
) |
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
33,916 |
|
|
|
33,618 |
|
|
|
33,850 |
|
|
|
34,111 |
|
|
Diluted |
|
|
33,916 |
|
|
|
34,142 |
|
|
|
33,850 |
|
|
|
34,626 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends per share |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
July 31, 2016 |
|
October 31, 2015
(1) |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
32,183 |
|
|
$ |
23,125 |
|
|
Accounts receivable, net |
|
|
83,089 |
|
|
|
64,080 |
|
|
Inventories, net |
|
|
92,251 |
|
|
|
63,029 |
|
|
Prepaid and other current
assets |
|
|
11,900 |
|
|
|
7,992 |
|
|
Total current assets |
|
|
219,423 |
|
|
|
158,226 |
|
|
Property, plant and
equipment, net |
|
|
198,213 |
|
|
|
140,672 |
|
|
Deferred income
taxes |
|
|
- |
|
|
|
8,783 |
|
|
Goodwill |
|
|
234,522 |
|
|
|
129,770 |
|
|
Intangible assets,
net |
|
|
162,471 |
|
|
|
120,810 |
|
|
Other assets |
|
|
6,865 |
|
|
|
7,989 |
|
|
Total assets |
|
$ |
821,494 |
|
|
$ |
566,250 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
48,816 |
|
|
$ |
47,778 |
|
|
Accrued liabilities |
|
|
52,961 |
|
|
|
37,364 |
|
|
Income taxes payable |
|
|
912 |
|
|
|
747 |
|
|
Current maturities of long-term
debt |
|
|
24,387 |
|
|
|
2,359 |
|
|
Total current liabilities |
|
|
127,076 |
|
|
|
88,248 |
|
|
Long-term debt |
|
|
277,680 |
|
|
|
54,501 |
|
|
Deferred pension and
postretirement benefits |
|
|
8,186 |
|
|
|
5,701 |
|
|
Deferred income
taxes |
|
|
21,758 |
|
|
|
- |
|
|
Other liabilities |
|
|
13,727 |
|
|
|
22,505 |
|
|
Total liabilities |
|
|
448,427 |
|
|
|
170,955 |
|
|
Stockholders’
equity: |
|
|
|
|
|
Common stock |
|
|
376 |
|
|
|
376 |
|
|
Additional paid-in-capital |
|
|
253,039 |
|
|
|
250,937 |
|
|
Retained earnings |
|
|
209,993 |
|
|
|
222,138 |
|
|
Accumulated other comprehensive
loss |
|
|
(27,932 |
) |
|
|
(10,049 |
) |
|
Treasury stock at cost |
|
|
(62,409 |
) |
|
|
(68,107 |
) |
|
Total stockholders’ equity |
|
|
373,067 |
|
|
|
395,295 |
|
|
Total liabilities and stockholders'
equity |
|
$ |
821,494 |
|
|
$ |
566,250 |
|
|
|
|
|
|
|
|
(1)
October 31, 2015 balance sheet reflects adoption of ASU 2015-03 and
ASU 2015-17. |
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
Nine Months Ended July 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
Operating activities: |
|
|
|
|
Net (loss) income |
$ |
(7,290 |
) |
|
$ |
6,150 |
|
|
Adjustments to reconcile net (loss)
income to cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
39,759 |
|
|
|
24,541 |
|
|
Stock-based compensation |
|
4,587 |
|
|
|
3,391 |
|
|
Deferred income tax |
|
(6,370 |
) |
|
|
1,576 |
|
|
Excess tax benefit from share-based
compensation |
|
(134 |
) |
|
|
(60 |
) |
|
Noncash charge for deferred loan
costs and debt discount |
|
15,883 |
|
|
|
- |
|
|
Gain on involuntary conversion |
|
- |
|
|
|
(1,263 |
) |
|
Other, net |
|
543 |
|
|
|
655 |
|
|
Changes in assets and liabilities,
net of effects from acquisitions: |
|
|
|
|
Decrease in accounts
receivable |
|
2,035 |
|
|
|
4,328 |
|
|
Increase in inventory |
|
(1,530 |
) |
|
|
(51 |
) |
|
Increase in other current
assets |
|
(1,239 |
) |
|
|
(1,568 |
) |
|
Decrease in accounts payable |
|
(2,092 |
) |
|
|
(5,236 |
) |
|
Decrease in accrued
liabilities |
|
(2,139 |
) |
|
|
(5,606 |
) |
|
Increase (decrease) in income taxes
payable |
|
2,990 |
|
|
|
(817 |
) |
|
Increase in deferred pension and
postretirement benefits |
|
2,485 |
|
|
|
1,873 |
|
|
Increase (decrease) in other
long-term liabilities |
|
894 |
|
|
|
(162 |
) |
|
Other, net |
|
676 |
|
|
|
(202 |
) |
|
Cash provided by
operating activities |
|
49,058 |
|
|
|
27,549 |
|
|
Investing activities: |
|
|
|
|
Acquisitions, net of cash
acquired |
|
(245,904 |
) |
|
|
(131,689 |
) |
|
Capital expenditures |
|
(25,938 |
) |
|
|
(21,918 |
) |
|
Proceeds from property insurance
claim |
|
- |
|
|
|
1,263 |
|
|
Proceeds from disposition of
capital assets |
|
984 |
|
|
|
207 |
|
|
Cash used for investing
activities |
|
(270,858 |
) |
|
|
(152,137 |
) |
|
Financing activities: |
|
|
|
|
Borrowings under credit
facilities |
|
632,800 |
|
|
|
92,000 |
|
|
Repayments of credit facility
borrowings |
|
(389,000 |
) |
|
|
(8,000 |
) |
|
Debt issuance costs |
|
(11,795 |
) |
|
|
- |
|
|
Repayments of other long-term
debt |
|
(1,825 |
) |
|
|
(411 |
) |
|
Common stock dividends paid |
|
(4,101 |
) |
|
|
(4,158 |
) |
|
Issuance of common stock |
|
3,368 |
|
|
|
4,309 |
|
|
Excess tax benefit from share-based
compensation |
|
134 |
|
|
|
60 |
|
|
Purchase of treasury stock |
|
- |
|
|
|
(52,719 |
) |
|
Cash provided by
financing activities |
|
229,581 |
|
|
|
31,081 |
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
1,277 |
|
|
|
134 |
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents |
|
9,058 |
|
|
|
(93,373 |
) |
|
Cash and cash
equivalents at beginning of period |
|
23,125 |
|
|
|
120,384 |
|
|
Cash and cash
equivalents at end of period |
$ |
32,183 |
|
|
$ |
27,011 |
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
NON-GAAP FINANCIAL MEASURE
DISCLOSURE |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (defined as net income or loss before interest, taxes,
depreciation and amortization and other, net) and Adjusted EBITDA
(defined as net income or loss before interest, taxes, depreciation
and amortization and other, net, excluding transaction costs and
purchase price accounting inventory step-ups) are non-GAAP
financial measures that Quanex's management uses to measure its
operational performance and assist with financial
decision-making. The Company believes these non-GAAP measures
provide a consistent basis for comparison between periods, and will
assist investors in understanding our financial performance when
comparing our results to other investment opportunities. The
leverage ratio of Net Debt to LTM Pro Forma Adjusted EBITDA is a
financial measure that Quanex’s management believes is useful to
investors and financial analysts in evaluating the Company’s
leverage. In addition, with certain limited adjustments, this
leverage ratio is the basis for a key covenant in Quanex’s credit
agreements. Net Debt is calculated using the sum of current
maturities of long-term debt and long-term debt, minus cash and
cash equivalents. LTM Pro Forma Adjusted EBITDA is a non-GAAP
financial measure that is calculated assuming that the acquisitions
of HL Plastics and Woodcraft Industries occurred at a date prior to
the actual date of acquisition. Since pro forma adjustment
items to LTM Pro Forma Adjusted EBITDA are not historical in
nature, a reconciliation to a comparable GAAP measure for purposes
of such ratio is not available without unreasonable effort.
Adjusted Income (Loss) from Continuing Operations and Adjusted
Diluted Earnings (Loss) from Continuing Operations are non-GAAP
financial measures that exclude certain charges and credits because
the Company believes that such items are not indicative of its core
operating results, are not indicative of trends, and do not provide
meaningful comparisons with other reporting periods. Quanex
believes the presented non-GAAP measures provide a consistent basis
for comparison between periods, and will assist investors in
understanding our financial performance when comparing our results
to other investment opportunities. The presented non-GAAP
measures may not be the same as those used by other
companies. The Company does not intend for this information
to be considered in isolation or as a substitute for other measures
prepared in accordance with US GAAP. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, 2016 |
|
Three Months Ended July 31, 2015 |
|
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
Net
sales |
|
$ |
248,085 |
|
|
$ |
- |
|
|
$ |
248,085 |
|
|
$ |
180,206 |
|
|
$ |
- |
|
|
$ |
180,206 |
|
Cost of
sales (1) |
|
|
186,631 |
|
|
|
(67 |
) |
|
|
186,564 |
|
|
|
136,853 |
|
|
|
(2,930 |
) |
|
|
133,923 |
|
Selling,
general and administrative (2) |
|
|
28,551 |
|
|
|
(109 |
) |
|
|
28,442 |
|
|
|
25,023 |
|
|
|
(3,824 |
) |
|
|
21,199 |
|
EBITDA |
|
|
32,903 |
|
|
|
176 |
|
|
|
33,079 |
|
|
|
18,330 |
|
|
|
6,754 |
|
|
|
25,084 |
|
Depreciation and amortization |
|
|
12,973 |
|
|
|
- |
|
|
|
12,973 |
|
|
|
8,502 |
|
|
|
- |
|
|
|
8,502 |
|
Operating income |
|
|
19,930 |
|
|
|
176 |
|
|
|
20,106 |
|
|
|
9,828 |
|
|
|
6,754 |
|
|
|
16,582 |
|
Interest
(expense) benefit (3) |
|
|
(22,200 |
) |
|
|
16,677 |
|
|
|
(5,523 |
) |
|
|
(338 |
) |
|
|
- |
|
|
|
(338 |
) |
Other,
net (4) |
|
|
(2,523 |
) |
|
|
2,239 |
|
|
|
(284 |
) |
|
|
566 |
|
|
|
(492 |
) |
|
|
74 |
|
(Loss)
income before income taxes |
|
|
(4,793 |
) |
|
|
19,092 |
|
|
|
14,299 |
|
|
|
10,056 |
|
|
|
6,262 |
|
|
|
16,318 |
|
Income
tax benefit (expense) (5) |
|
|
817 |
|
|
|
(4,629 |
) |
|
|
(3,812 |
) |
|
|
(3,585 |
) |
|
|
(1,648 |
) |
|
|
(5,233 |
) |
(Loss)
income from continuing operations |
|
$ |
(3,976 |
) |
|
$ |
14,463 |
|
|
$ |
10,487 |
|
|
$ |
6,471 |
|
|
$ |
4,614 |
|
|
$ |
11,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share from continuing operations (6) |
|
$ |
(0.12 |
) |
|
|
|
$ |
0.30 |
|
|
$ |
0.19 |
|
|
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended July 31, 2016 |
|
Nine Months Ended July 31, 2015 |
|
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
Net
sales |
|
$ |
679,013 |
|
|
$ |
- |
|
|
$ |
679,013 |
|
|
$ |
450,069 |
|
|
$ |
- |
|
|
$ |
450,069 |
|
Cost of
sales (1) |
|
|
522,476 |
|
|
|
(2,638 |
) |
|
|
519,838 |
|
|
|
353,469 |
|
|
|
(2,930 |
) |
|
|
350,539 |
|
Selling,
general and administrative (2) |
|
|
88,430 |
|
|
|
(4,987 |
) |
|
|
83,443 |
|
|
|
64,157 |
|
|
|
(3,930 |
) |
|
|
60,227 |
|
EBITDA |
|
|
68,107 |
|
|
|
7,625 |
|
|
|
75,732 |
|
|
|
32,443 |
|
|
|
6,860 |
|
|
|
39,303 |
|
Depreciation and amortization |
|
|
39,759 |
|
|
|
- |
|
|
|
39,759 |
|
|
|
24,541 |
|
|
|
- |
|
|
|
24,541 |
|
Operating income |
|
|
28,348 |
|
|
|
7,625 |
|
|
|
35,973 |
|
|
|
7,902 |
|
|
|
6,860 |
|
|
|
14,762 |
|
Interest
(expense) benefit (3) |
|
|
(34,324 |
) |
|
|
16,677 |
|
|
|
(17,647 |
) |
|
|
(624 |
) |
|
|
- |
|
|
|
(624 |
) |
Other,
net (4) |
|
|
(4,036 |
) |
|
|
3,879 |
|
|
|
(157 |
) |
|
|
300 |
|
|
|
(183 |
) |
|
|
117 |
|
(Loss)
income before income taxes |
|
|
(10,012 |
) |
|
|
28,181 |
|
|
|
18,169 |
|
|
|
7,578 |
|
|
|
6,677 |
|
|
|
14,255 |
|
Income
tax benefit (expense) (5) |
|
|
2,722 |
|
|
|
(7,460 |
) |
|
|
(4,738 |
) |
|
|
(1,907 |
) |
|
|
(1,795 |
) |
|
|
(3,702 |
) |
(Loss)
income from continuing operations |
|
$ |
(7,290 |
) |
|
$ |
20,721 |
|
|
$ |
13,431 |
|
|
$ |
5,671 |
|
|
$ |
4,882 |
|
|
$ |
10,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share from continuing operations (6) |
|
$ |
(0.22 |
) |
|
|
|
$ |
0.39 |
|
|
$ |
0.17 |
|
|
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost
of sales adjustments relate solely to purchase price accounting
inventory step-up impact from HL Plastics and Woodcraft Industries
acquisitions. |
(2)
Selling, general and administrative adjustments are for acquisition
related transaction costs. |
(3)
Interest expense adjustments relate to write off of deferred loan
costs, unamortized original issuance discount, and prepayment call
premium related to debt refinance. |
(4) Other,
net adjustments relate to foreign currency transaction gains
(losses). |
(5)
Effective tax rate reflects impacts of adjustments on a with and
without basis. |
(6)
Adjusted EPS is calculated using diluted shares outstanding of 34.5
million and 34.4 million shares for three and nine months ended
July 31, 2016, respectively. |
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
SELECTED SEGMENT DATA |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
This table provides operating income (loss), EBITDA, and
Adjusted EBITDA by reportable segment. Non-operating expense
and income tax expense are not allocated to the reportable
segments. For a reconciliation of net income to operating
income (loss), see Non-GAAP Financial Measure Disclosure
table. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA Engineered Components |
|
EU Engineered Components |
|
NA Cabinet Components |
|
Unallocated Corp &
Other |
|
Total |
|
Three months
ended July 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
150,462 |
|
|
$ |
40,217 |
|
|
$ |
58,826 |
|
|
$ |
(1,420 |
) |
|
$ |
248,085 |
|
|
Cost of sales |
|
|
109,513 |
|
|
|
27,533 |
|
|
|
50,376 |
|
|
|
(791 |
) |
|
|
186,631 |
|
|
Operating income (loss) |
|
|
18,478 |
|
|
|
4,448 |
|
|
|
980 |
|
|
|
(3,976 |
) |
|
|
19,930 |
|
|
Depreciation and amortization |
|
|
7,063 |
|
|
|
2,340 |
|
|
|
3,435 |
|
|
|
135 |
|
|
|
12,973 |
|
|
EBITDA |
|
|
25,541 |
|
|
|
6,788 |
|
|
|
4,415 |
|
|
|
(3,841 |
) |
|
|
32,903 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
109 |
|
|
|
109 |
|
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
67 |
|
|
|
- |
|
|
|
- |
|
|
|
67 |
|
|
Adjusted EBITDA |
|
$ |
25,541 |
|
|
$ |
6,855 |
|
|
$ |
4,415 |
|
|
$ |
(3,732 |
) |
|
$ |
33,079 |
|
|
Adjusted EBITDA Margin % |
|
|
17 |
% |
|
|
17 |
% |
|
|
8 |
% |
|
|
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended July 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
153,508 |
|
|
$ |
27,997 |
|
|
$ |
- |
|
|
$ |
(1,299 |
) |
|
$ |
180,206 |
|
|
Cost of sales |
|
|
114,732 |
|
|
|
22,663 |
|
|
|
- |
|
|
|
(542 |
) |
|
|
136,853 |
|
|
Operating income (loss) |
|
|
16,814 |
|
|
|
(332 |
) |
|
|
- |
|
|
|
(6,654 |
) |
|
|
9,828 |
|
|
Depreciation and amortization |
|
|
7,141 |
|
|
|
1,171 |
|
|
|
- |
|
|
|
190 |
|
|
|
8,502 |
|
|
EBITDA |
|
|
23,955 |
|
|
|
839 |
|
|
|
- |
|
|
|
(6,464 |
) |
|
|
18,330 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,824 |
|
|
|
3,824 |
|
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
2,930 |
|
|
|
- |
|
|
|
- |
|
|
|
2,930 |
|
|
Adjusted EBITDA |
|
$ |
23,955 |
|
|
$ |
3,769 |
|
|
$ |
- |
|
|
$ |
(2,640 |
) |
|
$ |
25,084 |
|
|
Adjusted EBITDA Margin % |
|
|
16 |
% |
|
|
13 |
% |
|
|
0 |
% |
|
|
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended July 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
406,029 |
|
|
$ |
110,250 |
|
|
$ |
166,906 |
|
|
$ |
(4,172 |
) |
|
$ |
679,013 |
|
|
Cost of sales |
|
|
304,434 |
|
|
|
76,698 |
|
|
|
143,716 |
|
|
|
(2,372 |
) |
|
|
522,476 |
|
|
Operating income (loss) |
|
|
33,785 |
|
|
|
8,991 |
|
|
|
115 |
|
|
|
(14,543 |
) |
|
|
28,348 |
|
|
Depreciation and amortization |
|
|
21,424 |
|
|
|
7,191 |
|
|
|
10,709 |
|
|
|
435 |
|
|
|
39,759 |
|
|
EBITDA |
|
|
55,209 |
|
|
|
16,182 |
|
|
|
10,824 |
|
|
|
(14,108 |
) |
|
|
68,107 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,987 |
|
|
|
4,987 |
|
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
351 |
|
|
|
2,287 |
|
|
|
- |
|
|
|
2,638 |
|
|
Adjusted EBITDA |
|
$ |
55,209 |
|
|
$ |
16,533 |
|
|
$ |
13,111 |
|
|
$ |
(9,121 |
) |
|
$ |
75,732 |
|
|
Adjusted EBITDA Margin % |
|
|
14 |
% |
|
|
15 |
% |
|
|
8 |
% |
|
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended July 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
402,249 |
|
|
$ |
51,304 |
|
|
$ |
- |
|
|
$ |
(3,484 |
) |
|
$ |
450,069 |
|
|
Cost of sales |
|
|
314,975 |
|
|
|
40,214 |
|
|
|
- |
|
|
|
(1,720 |
) |
|
|
353,469 |
|
|
Operating income (loss) |
|
|
21,127 |
|
|
|
380 |
|
|
|
- |
|
|
|
(13,605 |
) |
|
|
7,902 |
|
|
Depreciation and amortization |
|
|
21,690 |
|
|
|
1,983 |
|
|
|
- |
|
|
|
868 |
|
|
|
24,541 |
|
|
EBITDA |
|
|
42,817 |
|
|
|
2,363 |
|
|
|
- |
|
|
|
(12,737 |
) |
|
|
32,443 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,930 |
|
|
|
3,930 |
|
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
2,930 |
|
|
|
- |
|
|
|
- |
|
|
|
2,930 |
|
|
Adjusted EBITDA |
|
$ |
42,817 |
|
|
$ |
5,293 |
|
|
$ |
- |
|
|
$ |
(8,807 |
) |
|
$ |
39,303 |
|
|
Adjusted EBITDA Margin % |
|
|
11 |
% |
|
|
10 |
% |
|
|
0 |
% |
|
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
SALES ANALYSIS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Bridge for Three Months Ended July 31,
2016 |
|
|
NA Engineered |
|
EU Engineered |
|
NA Cabinet |
|
Unallocated |
|
|
|
|
Components |
|
Components |
|
Components |
|
Corporate & Other |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Net
sales, three months ended July 31, 2015 |
|
$ |
153,508 |
|
|
$ |
27,997 |
|
|
$ |
- |
|
|
$ |
(1,299 |
) |
|
$ |
180,206 |
|
Market volume |
|
|
(263 |
) |
|
|
550 |
|
|
|
- |
|
|
|
(121 |
) |
|
|
166 |
|
Eliminated products |
|
|
(1,271 |
) |
|
|
|
|
- |
|
|
|
- |
|
|
|
(1,271 |
) |
Price changes |
|
|
(640 |
) |
|
|
(382 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,022 |
) |
Foreign currency impacts |
|
|
- |
|
|
|
(590 |
) |
|
|
- |
|
|
|
- |
|
|
|
(590 |
) |
Mergers & acquisitions |
|
|
- |
|
|
|
12,642 |
|
|
|
58,826 |
|
|
|
- |
|
|
|
71,468 |
|
Raw material pass through
adjustments |
|
|
(872 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(872 |
) |
Net
Sales, three months ended July 31, 2016 |
|
$ |
150,462 |
|
|
$ |
40,217 |
|
|
$ |
58,826 |
|
|
$ |
(1,420 |
) |
|
$ |
248,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Bridge for Nine Months Ended July 31,
2016 |
|
|
NA Engineered |
|
EU Engineered |
|
NA Cabinet |
|
Unallocated |
|
|
|
|
Components |
|
Components |
|
Components |
|
Corporate & Other |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Net
sales, nine months ended July 31, 2015 |
|
$ |
402,249 |
|
|
$ |
51,304 |
|
|
$ |
- |
|
|
$ |
(3,484 |
) |
|
$ |
450,069 |
|
Market volume |
|
|
14,758 |
|
|
|
2,717 |
|
|
|
- |
|
|
|
(688 |
) |
|
|
16,787 |
|
Eliminated products |
|
|
(4,688 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,688 |
) |
Price changes |
|
|
(1,393 |
) |
|
|
(1,368 |
) |
|
|
- |
|
|
|
- |
|
|
|
(2,761 |
) |
Foreign currency impacts |
|
|
- |
|
|
|
(1,774 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,774 |
) |
Mergers & acquisitions |
|
|
- |
|
|
|
59,371 |
|
|
|
166,906 |
|
|
|
- |
|
|
|
226,277 |
|
Raw material pass through
adjustments |
|
|
(4,897 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,897 |
) |
Net
Sales, nine months ended July 31, 2016 |
|
$ |
406,029 |
|
|
$ |
110,250 |
|
|
$ |
166,906 |
|
|
$ |
(4,172 |
) |
|
$ |
679,013 |
|
|
|
|
|
|
|
|
|
|
|
|
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