EPS Improves
Year-over-YearMargin Expansion Continues in
Cabinet Components SegmentStrong Free Cash Flow
Generation Allows $22 Million of Debt Repayment
Quanex Building Products Corporation (NYSE:NX)
(“Quanex” or the “Company”) today announced its results for the
quarter ended July 31, 2017.
Bill Griffiths, Chairman, President and Chief
Executive Officer, commented, “Overall, third quarter revenues came
in a little softer than expected; however, we realized significant
earnings per share growth and our consolidated Adjusted EBITDA
margin percentage improved. In addition, strong cash flow
generation during the quarter enabled us to repay more than $22
million in outstanding debt and we expect to generate even stronger
cash flow in the fourth quarter. Looking ahead, the recent
promotion of George Wilson to the newly created position of Chief
Operating Officer will allow me to spend more time concentrating on
strategy while he builds on the progress we have made towards
operational excellence, margin expansion and cash flow generation,
all of which will contribute toward the goal of further enhancing
and creating value for our shareholders.”
Third Quarter 2017 Results
Summary
The Company reported net sales of $229.4 million
for the three months ended July 31, 2017, compared to $248.1
million for the three months ended July 31, 2016. Similar to
the first and second quarters of 2017, the decrease was primarily
attributable to Quanex’s previously disclosed decision to exit
product lines and less profitable business that does not meet the
Company’s financial objectives. (See Sales Analysis table for
additional information)
Net income increased to $10.2 million, or $0.29
per diluted share, during the third quarter of 2017, compared to a
net loss of $4.0 million, or $0.12 per diluted share, in the third
quarter of 2016. Adjusted EBITDA decreased slightly to $32.2
million during the third quarter of 2017, compared to $33.1 million
during the third quarter of 2016, but consolidated Adjusted EBITDA
margin percentage increased by approximately 70 basis points.
(See Non-GAAP Terminology Definitions and Disclaimers section and
Selected Segment Data table for additional information)
Cash provided by operating activities for the
three months ended July 31, 2017, was $29.6 million, compared to
$25.2 million during the same period of 2016. Quanex
generated Free Cash Flow of $20.0 million during the third quarter
of 2017, representing an increase of approximately 20% compared to
the third quarter of 2016. As of July 31, 2017, the Company’s
leverage ratio of Net Debt to LTM Adjusted EBITDA was 2.5x.
As expected, Quanex’s leverage ratio decreased quarter-over-quarter
largely as a result of the repayment of approximately $22 million
in debt. The Company remains focused on generating Free Cash
Flow to pay down debt and continues to anticipate a further
improvement in the leverage ratio by year-end 2017. (See Free
Cash Flow Reconciliation table and Non-GAAP Terminology Definitions
and Disclaimers section for additional information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, 2017 |
|
Three Months Ended July 31, 2016 |
($ in thousands, except
per share data) |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
|
Results Before
Adjustments |
|
Adjustments |
|
Adjusted Results |
Net
sales |
|
$ |
229,367 |
|
|
$ |
- |
|
|
$ |
229,367 |
|
|
$ |
248,085 |
|
|
$ |
- |
|
|
$ |
248,085 |
|
Cost of
sales (1) |
|
|
176,758 |
|
|
|
- |
|
|
|
176,758 |
|
|
|
186,631 |
|
|
|
(67 |
) |
|
|
186,564 |
|
Selling,
general and administrative (2) |
|
|
20,478 |
|
|
|
(35 |
) |
|
|
20,443 |
|
|
|
28,551 |
|
|
|
(109 |
) |
|
|
28,442 |
|
Restructuring charges (3) |
|
|
864 |
|
|
|
(864 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
EBITDA |
|
|
31,267 |
|
|
|
899 |
|
|
|
32,166 |
|
|
|
32,903 |
|
|
|
176 |
|
|
|
33,079 |
|
Depreciation and amortization (4) |
|
|
13,915 |
|
|
|
(1,277 |
) |
|
|
12,638 |
|
|
|
12,973 |
|
|
|
- |
|
|
|
12,973 |
|
Operating income (loss) |
|
|
17,352 |
|
|
|
2,176 |
|
|
|
19,528 |
|
|
|
19,930 |
|
|
|
176 |
|
|
|
20,106 |
|
Interest
expense (5) |
|
|
(2,575 |
) |
|
|
- |
|
|
|
(2,575 |
) |
|
|
(22,200 |
) |
|
|
16,677 |
|
|
|
(5,523 |
) |
Other,
net (6) |
|
|
46 |
|
|
|
(39 |
) |
|
|
7 |
|
|
|
(2,523 |
) |
|
|
2,239 |
|
|
|
(284 |
) |
Income
(loss) before income taxes |
|
|
14,823 |
|
|
|
2,137 |
|
|
|
16,960 |
|
|
|
(4,793 |
) |
|
|
19,092 |
|
|
|
14,299 |
|
Income
tax (expense) benefit (7) |
|
|
(4,608 |
) |
|
|
(860 |
) |
|
|
(5,468 |
) |
|
|
817 |
|
|
|
(5,910 |
) |
|
|
(5,093 |
) |
Net
income (loss) |
|
$ |
10,215 |
|
|
$ |
1,277 |
|
|
$ |
11,492 |
|
|
$ |
(3,976 |
) |
|
$ |
13,182 |
|
|
$ |
9,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share (8) |
|
$ |
0.29 |
|
|
|
|
$ |
0.33 |
|
|
$ |
(0.12 |
) |
|
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cost of sales adjustment relates solely to purchase price
accounting inventory step-up impact from HL Plastics
acquisition. |
(2) SG&A adjustments are for acquisition related
transaction costs. |
(3) Restructuring charges relate to the closure of several
manufacturing plant facilities. |
(4) D&A adjustments relate to accelerated depreciation and
amortization for restructured PP&E and intangible assets. |
(5) Interest expense adjustments relate to write off of
deferred loan costs, unamortized original issuance discount, and
prepayment call premium related to debt refinance. |
(6) Other, net adjustments relate to foreign currency
transaction (gains) losses. |
(7) Effective tax rate reflects impacts of adjustments on a
with and without basis. |
(8) Adjusted EPS for 2016 is calculated using diluted shares
outstanding of 34.5 million, respectively. |
|
Recent Events
Quanex’s Board of Directors declared a quarterly
cash dividend of $0.04 per share on the Company’s common stock,
payable September 29, 2017, to shareholders of record on September
18, 2017.
During the third quarter of 2017, Quanex
transferred operating responsibility of two wood-based accessory
plants from the North American Engineered Components segment to the
North American Cabinet Components segment. These moves have
been contemplated since the Company acquired Woodcraft and better
align manufacturing capability and capacity. (See Segment
Reconciliation table for additional information)
Conference Call and Webcast
Information
The Company has scheduled a conference call for
Thursday, September 7, 2017, at 11:00 a.m. ET (10:00 a.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 66331845, 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 14,
2017. To access the replay dial (855) 859-2056 for domestic
callers and (404) 537-3406 for international callers, in both cases
referencing conference passcode 66331845.
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
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,
gain/loss on the sale of fixed assets related to the plant closure
in Mexico, one-time employee benefit adjustment and restructuring
charges) are non-GAAP financial measures that the Company uses to
measure operational performance and assist with financial
decision-making. Net Debt is calculated using the sum of
current maturities of long-term debt and long-term debt, minus cash
and cash equivalents. The leverage ratio of Net Debt to LTM
Adjusted EBITDA is a financial measure that Quanex 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 agreement. Free Cash Flow is a non-GAAP
measure calculated using cash provided by operating activities less
capital expenditures. Adjusted Net Income (Loss) is a
non-GAAP financial measure that excludes certain charges and
credits because the Company believes that such items are not
indicative of its core operating results and trends, and do not
provide meaningful comparisons with other reporting periods.
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 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, 2016, 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.
|
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, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
229,367 |
|
|
$ |
248,085 |
|
|
$ |
634,406 |
|
|
$ |
679,013 |
|
Cost of sales |
|
|
176,758 |
|
|
|
186,631 |
|
|
|
494,647 |
|
|
|
522,476 |
|
Selling, general and
administrative |
|
|
20,478 |
|
|
|
28,551 |
|
|
|
74,839 |
|
|
|
88,430 |
|
Restructuring
charges |
|
|
864 |
|
|
|
- |
|
|
|
3,083 |
|
|
|
- |
|
Depreciation and
amortization |
|
|
13,915 |
|
|
|
12,973 |
|
|
|
43,701 |
|
|
|
39,759 |
|
Operating income |
|
|
17,352 |
|
|
|
19,930 |
|
|
|
18,136 |
|
|
|
28,348 |
|
Interest expense |
|
|
(2,575 |
) |
|
|
(22,200 |
) |
|
|
(7,126 |
) |
|
|
(34,324 |
) |
Other, net |
|
|
46 |
|
|
|
(2,523 |
) |
|
|
572 |
|
|
|
(4,036 |
) |
Income (loss) before
income taxes |
|
|
14,823 |
|
|
|
(4,793 |
) |
|
|
11,582 |
|
|
|
(10,012 |
) |
Income tax (expense)
benefit |
|
|
(4,608 |
) |
|
|
817 |
|
|
|
(3,631 |
) |
|
|
2,722 |
|
Net income (loss) |
|
$ |
10,215 |
|
|
$ |
(3,976 |
) |
|
$ |
7,951 |
|
|
$ |
(7,290 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) per
common share, basic |
|
$ |
0.30 |
|
|
$ |
(0.12 |
) |
|
$ |
0.23 |
|
|
$ |
(0.22 |
) |
Income (loss) per
common share, diluted |
|
$ |
0.29 |
|
|
$ |
(0.12 |
) |
|
$ |
0.23 |
|
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
34,224 |
|
|
|
33,916 |
|
|
|
34,141 |
|
|
|
33,850 |
|
Diluted |
|
|
34,924 |
|
|
|
33,916 |
|
|
|
34,771 |
|
|
|
33,850 |
|
|
|
|
|
|
|
|
|
|
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, 2017 |
|
October 31, 2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
15,791 |
|
|
$ |
25,526 |
|
Accounts
receivable, net |
|
|
78,046 |
|
|
|
83,625 |
|
Inventories, net |
|
|
94,373 |
|
|
|
84,335 |
|
Prepaid
and other current assets |
|
|
8,119 |
|
|
|
10,488 |
|
Total
current assets |
|
|
196,329 |
|
|
|
203,974 |
|
Property, plant and
equipment, net |
|
|
214,829 |
|
|
|
198,497 |
|
Goodwill |
|
|
222,153 |
|
|
|
217,035 |
|
Intangible assets,
net |
|
|
143,702 |
|
|
|
154,180 |
|
Other assets |
|
|
8,046 |
|
|
|
6,667 |
|
Total
assets |
|
$ |
785,059 |
|
|
$ |
780,353 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
45,709 |
|
|
$ |
47,781 |
|
Accrued
liabilities |
|
|
35,476 |
|
|
|
55,101 |
|
Income
taxes payable |
|
|
2,133 |
|
|
|
732 |
|
Current
maturities of long-term debt |
|
|
26,364 |
|
|
|
10,520 |
|
Total
current liabilities |
|
|
109,682 |
|
|
|
114,134 |
|
Long-term debt |
|
|
238,033 |
|
|
|
259,011 |
|
Deferred pension and
postretirement benefits |
|
|
10,704 |
|
|
|
8,167 |
|
Deferred income
taxes |
|
|
18,509 |
|
|
|
18,322 |
|
Other liabilities |
|
|
15,460 |
|
|
|
12,888 |
|
Total
liabilities |
|
|
392,388 |
|
|
|
412,522 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
|
|
375 |
|
|
|
376 |
|
Additional paid-in-capital |
|
|
256,170 |
|
|
|
254,540 |
|
Retained
earnings |
|
|
216,553 |
|
|
|
214,047 |
|
Accumulated other comprehensive loss |
|
|
(27,491 |
) |
|
|
(38,765 |
) |
Treasury
stock at cost |
|
|
(52,936 |
) |
|
|
(62,367 |
) |
Total
stockholders’ equity |
|
|
392,671 |
|
|
|
367,831 |
|
Total
liabilities and stockholders' equity |
|
$ |
785,059 |
|
|
$ |
780,353 |
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW |
(In thousands) |
(Unaudited) |
|
|
|
|
|
Nine Months Ended July 31, |
|
2017 |
|
2016 |
Operating activities: |
|
|
|
Net
income (loss) |
$ |
7,951 |
|
|
$ |
(7,290 |
) |
Adjustments to reconcile net income (loss) to cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
43,701 |
|
|
|
39,759 |
|
Stock-based compensation |
|
4,305 |
|
|
|
4,587 |
|
Deferred
income tax |
|
(1,847 |
) |
|
|
(6,370 |
) |
Excess
tax benefit from share-based compensation |
|
(229 |
) |
|
|
(134 |
) |
Charge
for deferred loan costs and debt discount |
|
- |
|
|
|
15,883 |
|
Other,
net |
|
1,136 |
|
|
|
543 |
|
Changes
in assets and liabilities, net of effects from acquisitions: |
|
|
|
Decrease
in accounts receivable |
|
6,923 |
|
|
|
2,035 |
|
Increase
in inventory |
|
(8,576 |
) |
|
|
(1,530 |
) |
Increase
in other current assets |
|
(379 |
) |
|
|
(1,239 |
) |
Decrease
in accounts payable |
|
(3,145 |
) |
|
|
(2,092 |
) |
Decrease
in accrued liabilities |
|
(12,303 |
) |
|
|
(2,139 |
) |
Increase
in income taxes payable |
|
4,349 |
|
|
|
2,990 |
|
Increase
in deferred pension and postretirement benefits |
|
2,537 |
|
|
|
2,485 |
|
Increase
in other long-term liabilities |
|
1,226 |
|
|
|
894 |
|
Other,
net |
|
(389 |
) |
|
|
676 |
|
Cash provided by
operating activities |
|
45,260 |
|
|
|
49,058 |
|
Investing activities: |
|
|
|
Acquisitions, net of cash acquired |
|
(8,497 |
) |
|
|
(245,904 |
) |
Capital
expenditures |
|
(27,098 |
) |
|
|
(25,938 |
) |
Proceeds
from disposition of capital assets |
|
1,232 |
|
|
|
984 |
|
Cash used for investing
activities |
|
(34,363 |
) |
|
|
(270,858 |
) |
Financing activities: |
|
|
|
Borrowings under credit facilities |
|
53,500 |
|
|
|
632,800 |
|
Repayments of credit facility borrowings |
|
(74,125 |
) |
|
|
(389,000 |
) |
Debt
issuance costs |
|
- |
|
|
|
(11,795 |
) |
Repayments of other long-term debt |
|
(2,240 |
) |
|
|
(1,825 |
) |
Common
stock dividends paid |
|
(4,127 |
) |
|
|
(4,101 |
) |
Issuance
of common stock |
|
6,379 |
|
|
|
3,368 |
|
Excess
tax benefit from share-based compensation |
|
229 |
|
|
|
134 |
|
Cash (used for)
provided by financing activities |
|
(20,384 |
) |
|
|
229,581 |
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(248 |
) |
|
|
1,277 |
|
(Decrease) increase in
cash and cash equivalents |
|
(9,735 |
) |
|
|
9,058 |
|
Cash and cash
equivalents at beginning of period |
|
25,526 |
|
|
|
23,125 |
|
Cash and cash
equivalents at end of period |
$ |
15,791 |
|
|
$ |
32,183 |
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
|
FREE CASH FLOW 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 July 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Cash provided by
operating activities |
|
$ |
29,556 |
|
|
$ |
25,249 |
|
|
Capital
expenditures |
|
|
(9,548 |
) |
|
|
(8,519 |
) |
|
Free Cash Flow |
|
$ |
20,008 |
|
|
$ |
16,730 |
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
SEGMENT RECONCILIATION |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
The following tables reconcile the Company's segment
presentation to account for the transfer of operating facilities
from the North American Engineered Components segment to the
Cabinet Components segment, as previously reported in our earnings
release for the three-months and nine-months ended July 31, 2016,
to the current presentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
NA Engineered Components |
|
EU Engineered Components |
|
NA Cabinet Components |
|
Unallocated Corp &
Other |
|
Total |
Three months
ended July 31, 2016 |
|
|
|
|
|
|
|
|
|
|
As previously
reported |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
150,462 |
|
|
$ |
40,217 |
|
$ |
58,826 |
|
$ |
(1,420 |
) |
|
$ |
248,085 |
Cost of
sales |
|
|
109,513 |
|
|
|
27,533 |
|
|
50,376 |
|
|
(791 |
) |
|
|
186,631 |
Selling,
general and administrative |
|
|
15,408 |
|
|
|
5,896 |
|
|
4,035 |
|
|
3,212 |
|
|
|
28,551 |
Depreciation and amortization |
|
|
7,063 |
|
|
|
2,340 |
|
|
3,435 |
|
|
135 |
|
|
|
12,973 |
Operating
income (loss) |
|
$ |
18,478 |
|
|
$ |
4,448 |
|
$ |
980 |
|
$ |
(3,976 |
) |
|
$ |
19,930 |
|
|
|
|
|
|
|
|
|
|
|
Reclassification |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
(5,422 |
) |
|
$ |
- |
|
$ |
6,094 |
|
$ |
(672 |
) |
|
$ |
- |
Cost of
sales |
|
|
(4,364 |
) |
|
|
- |
|
|
5,036 |
|
|
(672 |
) |
|
|
- |
Selling,
general and administrative |
|
|
(230 |
) |
|
|
- |
|
|
230 |
|
|
- |
|
|
|
- |
Depreciation and amortization |
|
|
(133 |
) |
|
|
- |
|
|
133 |
|
|
- |
|
|
|
- |
Operating
income (loss) |
|
$ |
(695 |
) |
|
$ |
- |
|
$ |
695 |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Current
presentation |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
145,040 |
|
|
$ |
40,217 |
|
$ |
64,920 |
|
$ |
(2,092 |
) |
|
$ |
248,085 |
Cost of
sales |
|
|
105,149 |
|
|
|
27,533 |
|
|
55,412 |
|
|
(1,463 |
) |
|
|
186,631 |
Selling,
general and administrative |
|
|
15,178 |
|
|
|
5,896 |
|
|
4,265 |
|
|
3,212 |
|
|
|
28,551 |
Depreciation and amortization |
|
|
6,930 |
|
|
|
2,340 |
|
|
3,568 |
|
|
135 |
|
|
|
12,973 |
Operating
income (loss) |
|
$ |
17,783 |
|
|
$ |
4,448 |
|
$ |
1,675 |
|
$ |
(3,976 |
) |
|
$ |
19,930 |
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended July 31, 2016 |
|
|
|
|
|
|
|
|
|
|
As previously
reported |
|
|
|
|
|
|
|
|
|
|
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 |
Selling,
general and administrative |
|
|
46,386 |
|
|
|
17,370 |
|
|
12,366 |
|
|
12,308 |
|
|
|
88,430 |
Depreciation and amortization |
|
|
21,424 |
|
|
|
7,191 |
|
|
10,709 |
|
|
435 |
|
|
|
39,759 |
Operating
income (loss) |
|
$ |
33,785 |
|
|
$ |
8,991 |
|
$ |
115 |
|
$ |
(14,543 |
) |
|
$ |
28,348 |
|
|
|
|
|
|
|
|
|
|
|
Reclassification |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
(15,772 |
) |
|
$ |
- |
|
$ |
18,143 |
|
$ |
(2,371 |
) |
|
$ |
- |
Cost of
sales |
|
|
(12,440 |
) |
|
|
- |
|
|
14,811 |
|
|
(2,371 |
) |
|
|
- |
Selling,
general and administrative |
|
|
(660 |
) |
|
|
- |
|
|
660 |
|
|
- |
|
|
|
- |
Depreciation and amortization |
|
|
(375 |
) |
|
|
- |
|
|
375 |
|
|
- |
|
|
|
- |
Operating
income (loss) |
|
$ |
(2,297 |
) |
|
$ |
- |
|
$ |
2,297 |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Current
presentation |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
390,257 |
|
|
$ |
110,250 |
|
$ |
185,049 |
|
$ |
(6,543 |
) |
|
$ |
679,013 |
Cost of
sales |
|
|
291,994 |
|
|
|
76,698 |
|
|
158,527 |
|
|
(4,743 |
) |
|
|
522,476 |
Selling,
general and administrative |
|
|
45,726 |
|
|
|
17,370 |
|
|
13,026 |
|
|
12,308 |
|
|
|
88,430 |
Depreciation and amortization |
|
|
21,049 |
|
|
|
7,191 |
|
|
11,084 |
|
|
435 |
|
|
|
39,759 |
Operating
income (loss) |
|
$ |
31,488 |
|
|
$ |
8,991 |
|
$ |
2,412 |
|
$ |
(14,543 |
) |
|
$ |
28,348 |
|
|
|
|
|
|
|
|
|
|
|
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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
NA Engineered Components |
|
EU Engineered Components |
|
NA Cabinet Components |
|
Unallocated Corp &
Other |
|
Total |
Three months
ended July 31, 2017 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
126,446 |
|
|
$ |
40,359 |
|
|
$ |
63,839 |
|
|
$ |
(1,277 |
) |
|
$ |
229,367 |
|
Cost of
sales |
|
|
94,169 |
|
|
|
29,002 |
|
|
|
54,538 |
|
|
|
(951 |
) |
|
|
176,758 |
|
Selling,
general and administrative |
|
|
11,829 |
|
|
|
5,162 |
|
|
|
3,968 |
|
|
|
(481 |
) |
|
|
20,478 |
|
Restructuring charges |
|
|
727 |
|
|
|
- |
|
|
|
137 |
|
|
|
- |
|
|
|
864 |
|
Depreciation and amortization |
|
|
7,899 |
|
|
|
2,391 |
|
|
|
3,491 |
|
|
|
134 |
|
|
|
13,915 |
|
Operating
income (loss) |
|
|
11,822 |
|
|
|
3,804 |
|
|
|
1,705 |
|
|
|
21 |
|
|
|
17,352 |
|
Depreciation and amortization |
|
|
7,899 |
|
|
|
2,391 |
|
|
|
3,491 |
|
|
|
134 |
|
|
|
13,915 |
|
EBITDA |
|
|
19,721 |
|
|
|
6,195 |
|
|
|
5,196 |
|
|
|
155 |
|
|
|
31,267 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
35 |
|
|
|
35 |
|
Restructuring charges |
|
|
727 |
|
|
|
- |
|
|
|
137 |
|
|
|
- |
|
|
|
864 |
|
Adjusted
EBITDA |
|
$ |
20,448 |
|
|
$ |
6,195 |
|
|
$ |
5,333 |
|
|
$ |
190 |
|
|
$ |
32,166 |
|
Adjusted
EBITDA Margin % |
|
|
16.2 |
% |
|
|
15.3 |
% |
|
|
8.4 |
% |
|
|
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended July 31, 2016 (1) |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
145,040 |
|
|
$ |
40,217 |
|
|
$ |
64,920 |
|
|
$ |
(2,092 |
) |
|
$ |
248,085 |
|
Cost of
sales |
|
|
105,149 |
|
|
|
27,533 |
|
|
|
55,412 |
|
|
|
(1,463 |
) |
|
|
186,631 |
|
Selling,
general and administrative |
|
|
15,178 |
|
|
|
5,896 |
|
|
|
4,265 |
|
|
|
3,212 |
|
|
|
28,551 |
|
Depreciation and amortization |
|
|
6,930 |
|
|
|
2,340 |
|
|
|
3,568 |
|
|
|
135 |
|
|
|
12,973 |
|
Operating
income (loss) |
|
|
17,783 |
|
|
|
4,448 |
|
|
|
1,675 |
|
|
|
(3,976 |
) |
|
|
19,930 |
|
Depreciation and amortization |
|
|
6,930 |
|
|
|
2,340 |
|
|
|
3,568 |
|
|
|
135 |
|
|
|
12,973 |
|
EBITDA |
|
|
24,713 |
|
|
|
6,788 |
|
|
|
5,243 |
|
|
|
(3,841 |
) |
|
|
32,903 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
109 |
|
|
|
109 |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
67 |
|
|
|
- |
|
|
|
- |
|
|
|
67 |
|
Adjusted
EBITDA |
|
$ |
24,713 |
|
|
$ |
6,855 |
|
|
$ |
5,243 |
|
|
$ |
(3,732 |
) |
|
$ |
33,079 |
|
Adjusted
EBITDA Margin % |
|
|
17.0 |
% |
|
|
17.0 |
% |
|
|
8.1 |
% |
|
|
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended July 31, 2017 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
343,694 |
|
|
$ |
106,133 |
|
|
$ |
188,359 |
|
|
$ |
(3,780 |
) |
|
$ |
634,406 |
|
Cost of
sales |
|
|
260,479 |
|
|
|
75,304 |
|
|
|
161,704 |
|
|
|
(2,840 |
) |
|
|
494,647 |
|
Selling,
general and administrative |
|
|
38,770 |
|
|
|
15,132 |
|
|
|
12,739 |
|
|
|
8,198 |
|
|
|
74,839 |
|
Restructuring charges |
|
|
2,207 |
|
|
|
- |
|
|
|
876 |
|
|
|
- |
|
|
|
3,083 |
|
Depreciation and amortization |
|
|
26,377 |
|
|
|
6,753 |
|
|
|
10,160 |
|
|
|
411 |
|
|
|
43,701 |
|
Operating
income (loss) |
|
|
15,861 |
|
|
|
8,944 |
|
|
|
2,880 |
|
|
|
(9,549 |
) |
|
|
18,136 |
|
Depreciation and amortization |
|
|
26,377 |
|
|
|
6,753 |
|
|
|
10,160 |
|
|
|
411 |
|
|
|
43,701 |
|
EBITDA |
|
|
42,238 |
|
|
|
15,697 |
|
|
|
13,040 |
|
|
|
(9,138 |
) |
|
|
61,837 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
327 |
|
|
|
327 |
|
Mexico
restructuring, loss on sale of fixed assets |
|
|
- |
|
|
|
- |
|
|
|
190 |
|
|
|
- |
|
|
|
190 |
|
One-time
employee benefit adjustment |
|
|
- |
|
|
|
- |
|
|
|
188 |
|
|
|
- |
|
|
|
188 |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
104 |
|
|
|
- |
|
|
|
- |
|
|
|
104 |
|
Restructuring charges |
|
|
2,207 |
|
|
|
- |
|
|
|
876 |
|
|
|
- |
|
|
|
3,083 |
|
Adjusted
EBITDA |
|
$ |
44,445 |
|
|
$ |
15,801 |
|
|
$ |
14,294 |
|
|
$ |
(8,811 |
) |
|
$ |
65,729 |
|
Adjusted
EBITDA Margin % |
|
|
12.9 |
% |
|
|
14.9 |
% |
|
|
7.6 |
% |
|
|
|
|
10.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Nine months
ended July 31, 2016 (1) |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
390,257 |
|
|
$ |
110,250 |
|
|
$ |
185,049 |
|
|
$ |
(6,543 |
) |
|
$ |
679,013 |
|
Cost of
sales |
|
|
291,994 |
|
|
|
76,698 |
|
|
|
158,527 |
|
|
|
(4,743 |
) |
|
|
522,476 |
|
Selling,
general and administrative |
|
|
45,726 |
|
|
|
17,370 |
|
|
|
13,026 |
|
|
|
12,308 |
|
|
|
88,430 |
|
Depreciation and amortization |
|
|
21,049 |
|
|
|
7,191 |
|
|
|
11,084 |
|
|
|
435 |
|
|
|
39,759 |
|
Operating
income (loss) |
|
|
31,488 |
|
|
|
8,991 |
|
|
|
2,412 |
|
|
|
(14,543 |
) |
|
|
28,348 |
|
Depreciation and amortization |
|
|
21,049 |
|
|
|
7,191 |
|
|
|
11,084 |
|
|
|
435 |
|
|
|
39,759 |
|
EBITDA |
|
|
52,537 |
|
|
|
16,182 |
|
|
|
13,496 |
|
|
|
(14,108 |
) |
|
|
68,107 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,987 |
|
|
|
4,987 |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
351 |
|
|
|
2,287 |
|
|
|
- |
|
|
|
2,638 |
|
Adjusted
EBITDA |
|
$ |
52,537 |
|
|
$ |
16,533 |
|
|
$ |
15,783 |
|
|
$ |
(9,121 |
) |
|
$ |
75,732 |
|
Adjusted
EBITDA Margin % |
|
|
13.5 |
% |
|
|
15.0 |
% |
|
|
8.5 |
% |
|
|
|
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) Updated to reflect transfer of operating facilities from
NA Engineered Components to NA Cabinet Components. See
Reconciliation for additional details. |
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
SALES ANALYSIS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
July 31, 2017 |
|
July 31, 2016
(1) |
|
July 31, 2017 |
|
July 31, 2016
(1) |
|
|
|
|
|
|
|
|
|
NA
Engineered Components: |
|
|
|
|
|
|
|
|
United States -
fenestration (2) |
$ |
107,193 |
|
|
$ |
121,717 |
|
|
$ |
289,231 |
|
|
$ |
328,957 |
|
|
International -
fenestration |
|
9,959 |
|
|
|
9,530 |
|
|
|
24,945 |
|
|
|
23,317 |
|
|
United States -
non-fenestration |
|
7,060 |
|
|
|
8,677 |
|
|
|
19,590 |
|
|
|
24,237 |
|
|
International -
non-fenestration |
|
2,234 |
|
|
|
5,116 |
|
|
|
9,928 |
|
|
|
13,746 |
|
|
|
$ |
126,446 |
|
|
$ |
145,040 |
|
|
$ |
343,694 |
|
|
$ |
390,257 |
|
EU
Engineered Components
(3): |
|
|
|
|
|
|
|
|
United States -
fenestration |
$ |
190 |
|
|
$ |
159 |
|
|
$ |
304 |
|
|
$ |
285 |
|
|
International -
fenestration |
|
35,087 |
|
|
|
35,547 |
|
|
|
94,528 |
|
|
|
98,744 |
|
|
International -
non-fenestration |
|
5,082 |
|
|
|
4,511 |
|
|
|
11,301 |
|
|
|
11,221 |
|
|
|
$ |
40,359 |
|
|
$ |
40,217 |
|
|
$ |
106,133 |
|
|
$ |
110,250 |
|
NA
Cabinet Components: |
|
|
|
|
|
|
|
|
United States -
fenestration |
$ |
4,322 |
|
|
$ |
3,008 |
|
|
$ |
12,316 |
|
|
$ |
10,651 |
|
|
United States -
non-fenestration (4) |
|
59,237 |
|
|
|
61,268 |
|
|
|
174,404 |
|
|
|
172,273 |
|
|
International -
non-fenestration |
|
280 |
|
|
|
644 |
|
|
|
1,639 |
|
|
|
2,125 |
|
|
|
$ |
63,839 |
|
|
$ |
64,920 |
|
|
$ |
188,359 |
|
|
$ |
185,049 |
|
Unallocated Corporate & Other: |
|
|
|
|
|
|
|
|
Eliminations |
$ |
(1,277 |
) |
|
$ |
(2,092 |
) |
|
$ |
(3,780 |
) |
|
$ |
(6,543 |
) |
|
|
$ |
(1,277 |
) |
|
$ |
(2,092 |
) |
|
$ |
(3,780 |
) |
|
$ |
(6,543 |
) |
|
|
|
|
|
|
|
|
|
Net
Sales |
$ |
229,367 |
|
|
$ |
248,085 |
|
|
$ |
634,406 |
|
|
$ |
679,013 |
|
|
|
|
|
|
|
|
|
|
(1)
Updated to reflect transfer of operating facilities from NA
Engineered Components to NA Cabinet Components. See
Reconciliation for additional details. |
(2)
Reflects the loss of revenue associated with eliminated products of
$20.1 million and $53.4 million for the three-months and
nine-months ended July 31, 2017, respectively. |
(3)
Reflects the loss of revenue associated with foreign currency
impacts of $2.6 million and $11.7 million for the three-months and
nine-months ended July 31, 2017, respectively. |
(4)
Reflects the loss of revenue associated with eliminated products of
$2.9 million and $8.3 million for the three-months and nine-months
ended July 31, 2017, respectively. |
|
|
|
|
|
|
|
|
|
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