Operational Efficiencies Continue to
Drive Margin Expansion Leverage Profile
Improves Further
Quanex Building Products Corporation (NYSE:NX) (“Quanex” or
the “Company”) today announced its results for the quarter ended
April 30, 2016.
Second Quarter 2016
Highlights
- Net sales increased 62% to $229.5 million compared to $142.0
million in Q2 2015
- Net income increased 72% to $3.9 million compared to $2.3
million in Q2 2015
- Adjusted EBITDA more than doubled to $24.3 million (11% margin)
versus $11.6 million (8% margin) in Q2 2015
- Year-to-date cash provided by operating activities increased
643% to $24.6 million compared to the same period last year
- All borrowings under Asset-Based Lending facility were repaid
as of April 30, 2016
Bill Griffiths, Chairman, President and Chief
Executive Officer, stated, “In line with our expectations and
guidance, our legacy window component business in the U.S. grew 6%
during the first half of our fiscal year, excluding the impact of
certain eliminated products, price changes and raw material pass
through adjustments. In addition, our ongoing focus on margin
expansion through operational efficiency gains continues to be
effective, as EBITDA margins improved by approximately 250 basis
points this quarter. As a result, we are increasing guidance
for 2016 to more accurately reflect our current expectations.
We also made further progress towards the goal of improving our
leverage ratio to under 2.5x by the end of this fiscal year, and we
remain confident in our ability to do so.”
Second Quarter 2016 Results
Summary
|
|
Three Months Ended April 30,
2016 |
|
Three Months Ended April 30,
2015 |
|
|
Results |
|
|
|
|
|
Results |
|
|
|
|
|
|
Before |
|
|
|
Adjusted |
|
Before |
|
|
|
Adjusted |
(In thousands, except
per share data) |
|
Adjustments |
|
Adjustments |
|
Results |
|
Adjustments |
|
Adjustments |
|
Results |
Net
sales |
|
$ |
229,460 |
|
|
$ |
- |
|
|
$ |
229,460 |
|
|
$ |
141,970 |
|
|
$ |
- |
|
|
$ |
141,970 |
|
Cost of
sales (1) |
|
|
176,497 |
|
|
|
(90 |
) |
|
|
176,407 |
|
|
|
110,812 |
|
|
|
- |
|
|
|
110,812 |
|
Selling,
general and administrative (2) |
|
|
28,591 |
|
|
|
212 |
|
|
|
28,803 |
|
|
|
19,638 |
|
|
|
(106 |
) |
|
|
19,532 |
|
EBITDA |
|
|
24,372 |
|
|
|
(122 |
) |
|
|
24,250 |
|
|
|
11,520 |
|
|
|
106 |
|
|
|
11,626 |
|
Depreciation and amortization |
|
|
13,816 |
|
|
|
- |
|
|
|
13,816 |
|
|
|
7,831 |
|
|
|
- |
|
|
|
7,831 |
|
Operating income (loss) |
|
|
10,556 |
|
|
|
(122 |
) |
|
|
10,434 |
|
|
|
3,689 |
|
|
|
106 |
|
|
|
3,795 |
|
Interest
expense |
|
|
(5,633 |
) |
|
|
- |
|
|
|
(5,633 |
) |
|
|
(145 |
) |
|
|
- |
|
|
|
(145 |
) |
Other,
net (3) |
|
|
848 |
|
|
|
(835 |
) |
|
|
13 |
|
|
|
(115 |
) |
|
|
126 |
|
|
|
11 |
|
Income
(loss) before income taxes |
|
|
5,771 |
|
|
|
(957 |
) |
|
|
4,814 |
|
|
|
3,429 |
|
|
|
232 |
|
|
|
3,661 |
|
Income
tax (expense) benefit |
|
|
(1,836 |
) |
|
|
304 |
|
|
|
(1,532 |
) |
|
|
(1,135 |
) |
|
|
(77 |
) |
|
|
(1,212 |
) |
Income
(loss) from continuing operations |
|
$ |
3,935 |
|
|
$ |
(653 |
) |
|
$ |
3,282 |
|
|
$ |
2,294 |
|
|
$ |
155 |
|
|
$ |
2,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share |
|
$ |
0.11 |
|
|
|
|
$ |
0.10 |
|
|
$ |
0.07 |
|
|
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Other,
net adjustments relate to foreign currency transaction gains
(losses). |
|
Net sales increased by $87.5 million to $229.5 million during
the three months ended April 30, 2016, compared to the three months
ended April 30, 2015. The increase was driven by revenue
generated from the acquisitions of HL Plastics and Woodcraft
Industries in 2015 coupled with continued volume growth in all
other reporting segments, partially offset by foreign exchange
translation impact. (See Sales Analysis table for additional
information)
The Company generated Adjusted EBITDA of $24.3
million for the quarter, compared to $11.6 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 200 basis points during the three months ended April
30, 2016, and approximately 400 basis points for the six months
ended April 30, 2016. (See Non-GAAP Financial Measure
Disclosure table and Selected Segment Data table for additional
information)
Quanex’s leverage ratio of Net Debt to LTM Pro
Forma Adjusted EBITDA improved to 2.6x. 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)
Fiscal 2016 Guidance Update
The guidance update incorporates Quanex’s
year-to-date results and reflects management’s current expectations
for the full year. The Company updated net sales guidance to
$965 – $975 million, which is unchanged at 5% to 6% pro forma
growth year-over-year, but now incorporates the Company’s latest
estimates for the expected impact of foreign exchange translation
based on current exchange rates. Quanex increased Adjusted
EBITDA guidance to $117 - $121 million, as compared to previous
guidance provided in December 2015 of $112 - $120
million.
|
|
|
|
|
|
|
|
GAAP to
Non-GAAP Reconciliation |
|
Fiscal 2016E |
|
|
|
Estimates |
|
|
|
|
|
|
|
Before |
|
1H16 |
|
Adjusted |
|
(In millions, except
per share data) |
|
Adjustments |
|
Adjustments |
|
Guidance |
|
Net
sales |
|
$965 - $975 |
|
|
- |
|
|
$965 - $975 |
|
EBITDA
(1) |
|
$110 - $114 |
|
$ |
7 |
|
|
$117 - $121 |
|
Depreciation and amortization |
|
$ |
53 |
|
|
|
- |
|
|
$ |
53 |
|
|
Operating income (loss) |
|
$57 - $61 |
|
$ |
7 |
|
|
$64 - $68 |
|
Interest
expense |
|
($ |
23 |
) |
|
|
- |
|
|
($ |
23 |
) |
|
Other,
net (2) |
|
($ |
2 |
) |
|
$ |
2 |
|
|
|
- |
|
|
Income
(loss) before income taxes |
|
$32 - $36 |
|
$ |
9 |
|
|
$41 - $45 |
|
Income
tax (expense) benefit |
|
($11) - ($12) |
|
($ |
3 |
) |
|
($14) - ($15) |
|
Income
(loss) from continuing operations |
|
$21 - $24 |
|
$ |
6 |
|
|
$27 - $30 |
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share |
|
$0.61 - $0.70 |
|
|
|
$0.78 - $0.87 |
|
|
|
|
|
|
|
|
|
(1) EBITDA
adjustments for transaction costs and purchase price accounting
inventory step-up impact from acquisitions. |
|
(2) Other,
net adjustments relate to foreign currency transaction gains
(losses). |
|
|
|
Recent Events
The Company’s Board of Directors declared a
quarterly cash dividend of $0.04 per share on Quanex’s common
stock, payable June 30, 2016, to shareholders of record on June 15,
2016.
Conference Call and Webcast
Information
The Company has scheduled a conference call for
Wednesday, June 1, 2016, 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 93625878, 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 June 8, 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 93625878.
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.
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 April 30, |
|
Six Months Ended April 30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
229,460 |
|
|
$ |
141,970 |
|
|
$ |
430,928 |
|
|
$ |
269,863 |
|
|
Cost of
sales |
|
|
176,497 |
|
|
|
110,812 |
|
|
|
335,845 |
|
|
|
216,616 |
|
|
Selling,
general and administrative |
|
|
28,591 |
|
|
|
19,638 |
|
|
|
59,879 |
|
|
|
39,134 |
|
|
Depreciation and amortization |
|
|
13,816 |
|
|
|
7,831 |
|
|
|
26,786 |
|
|
|
16,039 |
|
|
Operating income (loss) |
|
|
10,556 |
|
|
|
3,689 |
|
|
|
8,418 |
|
|
|
(1,926 |
) |
|
Interest
expense |
|
|
(5,633 |
) |
|
|
(145 |
) |
|
|
(12,124 |
) |
|
|
(286 |
) |
|
Other,
net |
|
|
848 |
|
|
|
(115 |
) |
|
|
(1,513 |
) |
|
|
(266 |
) |
|
Income
(loss) before income taxes |
|
|
5,771 |
|
|
|
3,429 |
|
|
|
(5,219 |
) |
|
|
(2,478 |
) |
|
Income
tax (expense) benefit |
|
|
(1,836 |
) |
|
|
(1,135 |
) |
|
|
1,905 |
|
|
|
1,678 |
|
|
Income
(loss) from continuing operations |
|
|
3,935 |
|
|
|
2,294 |
|
|
|
(3,314 |
) |
|
|
(800 |
) |
|
Income
from discontinued operations, net of taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
23 |
|
|
Net
income (loss) |
|
$ |
3,935 |
|
|
$ |
2,294 |
|
|
$ |
(3,314 |
) |
|
$ |
(777 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) per common share: |
|
|
|
|
|
|
|
|
|
From
continuing operations |
|
$ |
0.12 |
|
|
$ |
0.07 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.02 |
) |
|
From
discontinued operations |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
income (loss) per common share: |
|
|
|
|
|
|
|
|
|
From
continuing operations |
|
$ |
0.11 |
|
|
$ |
0.07 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.02 |
) |
|
From
discontinued operations |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
33,873 |
|
|
|
33,621 |
|
|
|
33,818 |
|
|
|
34,362 |
|
|
Diluted |
|
|
34,449 |
|
|
|
34,166 |
|
|
|
33,818 |
|
|
|
34,362 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends per share |
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
April 30, 2016 |
|
October 31, 2015 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,001 |
|
|
$ |
23,125 |
|
|
Accounts receivable, net |
|
|
83,734 |
|
|
|
64,080 |
|
|
Inventories, net |
|
|
97,338 |
|
|
|
63,029 |
|
|
Prepaid and other current
assets |
|
|
11,829 |
|
|
|
7,992 |
|
|
Total current assets |
|
|
221,902 |
|
|
|
158,226 |
|
|
Property, plant and
equipment, net |
|
|
201,657 |
|
|
|
140,672 |
|
|
Deferred income
taxes |
|
|
- |
|
|
|
8,783 |
|
|
Goodwill |
|
|
240,592 |
|
|
|
129,770 |
|
|
Intangible assets,
net |
|
|
171,866 |
|
|
|
120,810 |
|
|
Other assets |
|
|
15,400 |
|
|
|
8,529 |
|
|
Total assets |
|
$ |
851,417 |
|
|
$ |
566,790 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
51,822 |
|
|
$ |
47,778 |
|
|
Accrued liabilities |
|
|
44,245 |
|
|
|
37,364 |
|
|
Income taxes payable |
|
|
1,196 |
|
|
|
747 |
|
|
Current maturities of long-term
debt |
|
|
5,260 |
|
|
|
2,359 |
|
|
Total current liabilities |
|
|
102,523 |
|
|
|
88,248 |
|
|
Long-term debt |
|
|
304,090 |
|
|
|
55,041 |
|
|
Deferred pension and
postretirement benefits |
|
|
7,360 |
|
|
|
5,701 |
|
|
Deferred income tax
liabilities |
|
|
24,369 |
|
|
|
- |
|
|
Other liabilities |
|
|
23,062 |
|
|
|
22,505 |
|
|
Total liabilities |
|
|
461,404 |
|
|
|
171,495 |
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
376 |
|
|
|
376 |
|
|
Additional paid-in-capital |
|
|
252,712 |
|
|
|
250,937 |
|
|
Retained earnings |
|
|
215,635 |
|
|
|
222,138 |
|
|
Accumulated other comprehensive
loss |
|
|
(15,771 |
) |
|
|
(10,049 |
) |
|
Treasury stock at cost |
|
|
(62,939 |
) |
|
|
(68,107 |
) |
|
Total stockholders’ equity |
|
|
390,013 |
|
|
|
395,295 |
|
|
Total liabilities and stockholders'
equity |
|
$ |
851,417 |
|
|
$ |
566,790 |
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
Six Months Ended April 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
Operating activities: |
|
|
|
|
Net loss |
$ |
(3,314 |
) |
|
$ |
(777 |
) |
|
Adjustments to reconcile net loss
to cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
26,786 |
|
|
|
16,039 |
|
|
Stock-based compensation |
|
3,830 |
|
|
|
2,329 |
|
|
Deferred income tax |
|
(4,253 |
) |
|
|
(2,963 |
) |
|
Excess tax benefit from share-based
compensation |
|
(1 |
) |
|
|
(60 |
) |
|
Other, net |
|
1,503 |
|
|
|
(447 |
) |
|
Changes in assets and liabilities,
net of effects from acquisitions and dispositions: |
|
|
|
|
|
|
|
|
Decrease in accounts
receivable |
|
3,059 |
|
|
|
4,553 |
|
|
Increase in inventory |
|
(5,181 |
) |
|
|
(6,047 |
) |
|
(Increase) decrease in other
current assets |
|
(1,527 |
) |
|
|
601 |
|
|
Decrease in accounts payable |
|
(157 |
) |
|
|
(5,799 |
) |
|
Decrease in accrued
liabilities |
|
(1,769 |
) |
|
|
(5,253 |
) |
|
Increase in income taxes
payable |
|
3,394 |
|
|
|
260 |
|
|
Increase in deferred pension and
postretirement benefits |
|
1,659 |
|
|
|
1,201 |
|
|
Increase (decrease) in other
long-term liabilities |
|
695 |
|
|
|
(128 |
) |
|
Other, net |
|
(136 |
) |
|
|
(201 |
) |
|
Cash provided by
operating activities |
|
24,588 |
|
|
|
3,308 |
|
|
Investing activities: |
|
|
|
|
Net proceeds from sale of
discontinued operations |
|
- |
|
|
|
- |
|
|
Acquisitions, net of cash
acquired |
|
(245,904 |
) |
|
|
- |
|
|
Capital expenditures |
|
(17,419 |
) |
|
|
(13,381 |
) |
|
Proceeds from property insurance
claim |
|
- |
|
|
|
513 |
|
|
Proceeds from disposition of
capital assets |
|
935 |
|
|
|
202 |
|
|
Cash used for investing
activities |
|
(262,388 |
) |
|
|
(12,666 |
) |
|
Financing activities: |
|
|
|
|
Borrowings under credit
facility |
|
332,800 |
|
|
|
- |
|
|
Repayments of credit facility
borrowings |
|
(79,775 |
) |
|
|
- |
|
|
Debt issuance costs |
|
(8,713 |
) |
|
|
- |
|
|
Repayments of other long-term
debt |
|
(1,165 |
) |
|
|
(148 |
) |
|
Common stock dividends paid |
|
(2,731 |
) |
|
|
(2,803 |
) |
|
Issuance of common stock |
|
3,042 |
|
|
|
4,181 |
|
|
Excess tax benefit from share-based
compensation |
|
1 |
|
|
|
60 |
|
|
Purchase of treasury stock |
|
- |
|
|
|
(52,719 |
) |
|
Cash provided by (used
in) financing activities |
|
243,459 |
|
|
|
(51,429 |
) |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
217 |
|
|
|
433 |
|
|
|
|
|
|
|
Increase (decrease) in
cash and cash equivalents |
|
5,876 |
|
|
|
(60,354 |
) |
|
Cash and cash
equivalents at beginning of period |
|
23,125 |
|
|
|
120,384 |
|
|
Cash and cash
equivalents at end of period |
$ |
29,001 |
|
|
$ |
60,030 |
|
|
|
|
|
|
|
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 April 30,
2016 |
|
Three Months Ended April 30,
2015 |
|
|
Results |
|
|
|
|
|
Results |
|
|
|
|
|
|
Before |
|
|
|
Adjusted |
|
Before |
|
|
|
Adjusted |
|
|
Adjustments |
|
Adjustments |
|
Results |
|
Adjustments |
|
Adjustments |
|
Results |
Net
sales |
|
$ |
229,460 |
|
|
$ |
- |
|
|
$ |
229,460 |
|
|
$ |
141,970 |
|
|
$ |
- |
|
|
$ |
141,970 |
|
Cost of
sales (1) |
|
|
176,497 |
|
|
|
(90 |
) |
|
|
176,407 |
|
|
|
110,812 |
|
|
|
- |
|
|
|
110,812 |
|
Selling,
general and administrative (2) |
|
|
28,591 |
|
|
|
212 |
|
|
|
28,803 |
|
|
|
19,638 |
|
|
|
(106 |
) |
|
|
19,532 |
|
EBITDA |
|
|
24,372 |
|
|
|
(122 |
) |
|
|
24,250 |
|
|
|
11,520 |
|
|
|
106 |
|
|
|
11,626 |
|
Depreciation and amortization |
|
|
13,816 |
|
|
|
- |
|
|
|
13,816 |
|
|
|
7,831 |
|
|
|
- |
|
|
|
7,831 |
|
Operating income (loss) |
|
|
10,556 |
|
|
|
(122 |
) |
|
|
10,434 |
|
|
|
3,689 |
|
|
|
106 |
|
|
|
3,795 |
|
Interest
expense |
|
|
(5,633 |
) |
|
|
- |
|
|
|
(5,633 |
) |
|
|
(145 |
) |
|
|
- |
|
|
|
(145 |
) |
Other,
net (3) |
|
|
848 |
|
|
|
(835 |
) |
|
|
13 |
|
|
|
(115 |
) |
|
|
126 |
|
|
|
11 |
|
Income
(loss) before income taxes |
|
|
5,771 |
|
|
|
(957 |
) |
|
|
4,814 |
|
|
|
3,429 |
|
|
|
232 |
|
|
|
3,661 |
|
Income
tax (expense) benefit |
|
|
(1,836 |
) |
|
|
304 |
|
|
|
(1,532 |
) |
|
|
(1,135 |
) |
|
|
(77 |
) |
|
|
(1,212 |
) |
Income
(loss) from continuing operations |
|
$ |
3,935 |
|
|
$ |
(653 |
) |
|
$ |
3,282 |
|
|
$ |
2,294 |
|
|
$ |
155 |
|
|
$ |
2,449 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share |
|
$ |
0.11 |
|
|
|
|
$ |
0.10 |
|
|
$ |
0.07 |
|
|
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended April 30, 2016 |
|
Six Months Ended April 30, 2015 |
|
|
Results |
|
|
|
|
|
Results |
|
|
|
|
|
|
Before |
|
|
|
Adjusted |
|
Before |
|
|
|
Adjusted |
|
|
Adjustments |
|
Adjustments |
|
Results |
|
Adjustments |
|
Adjustments |
|
Results |
Net
sales |
|
$ |
430,928 |
|
|
$ |
- |
|
|
$ |
430,928 |
|
|
$ |
269,863 |
|
|
$ |
- |
|
|
$ |
269,863 |
|
Cost of
sales (1) |
|
|
335,845 |
|
|
|
(2,571 |
) |
|
|
333,274 |
|
|
|
216,616 |
|
|
|
- |
|
|
|
216,616 |
|
Selling,
general and administrative (2) |
|
|
59,879 |
|
|
|
(4,878 |
) |
|
|
55,001 |
|
|
|
39,134 |
|
|
|
(106 |
) |
|
|
39,028 |
|
EBITDA |
|
|
35,204 |
|
|
|
7,449 |
|
|
|
42,653 |
|
|
|
14,113 |
|
|
|
106 |
|
|
|
14,219 |
|
Depreciation and amortization |
|
|
26,786 |
|
|
|
- |
|
|
|
26,786 |
|
|
|
16,039 |
|
|
|
- |
|
|
|
16,039 |
|
Operating income (loss) |
|
|
8,418 |
|
|
|
7,449 |
|
|
|
15,867 |
|
|
|
(1,926 |
) |
|
|
106 |
|
|
|
(1,820 |
) |
Interest
expense |
|
|
(12,124 |
) |
|
|
- |
|
|
|
(12,124 |
) |
|
|
(286 |
) |
|
|
- |
|
|
|
(286 |
) |
Other,
net (3) |
|
|
(1,513 |
) |
|
|
1,640 |
|
|
|
127 |
|
|
|
(266 |
) |
|
|
308 |
|
|
|
42 |
|
Income
(loss) before income taxes |
|
|
(5,219 |
) |
|
|
9,089 |
|
|
|
3,870 |
|
|
|
(2,478 |
) |
|
|
414 |
|
|
|
(2,064 |
) |
Income
tax (expense) benefit |
|
|
1,905 |
|
|
|
(3,318 |
) |
|
|
(1,413 |
) |
|
|
1,678 |
|
|
|
(280 |
) |
|
|
1,398 |
|
Income
(loss) from continuing operations |
|
$ |
(3,314 |
) |
|
$ |
5,771 |
|
|
$ |
2,457 |
|
|
$ |
(800 |
) |
|
$ |
134 |
|
|
$ |
(666 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
Earnings Per Share |
|
$ |
(0.10 |
) |
|
|
|
$ |
0.07 |
|
|
$ |
(0.02 |
) |
|
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Other, net adjustments relate to foreign currency
transaction gains (losses). |
|
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 |
|
EU Engineered |
|
NA Cabinet |
|
Unallocated |
|
|
|
|
|
Components |
|
Components |
|
Components |
|
Corp &
Other |
|
Total |
|
Three months
ended April 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
134,519 |
|
|
$ |
36,965 |
|
|
$ |
59,555 |
|
|
$ |
(1,579 |
) |
|
$ |
229,460 |
|
|
Cost of sales |
|
|
101,193 |
|
|
|
25,518 |
|
|
|
50,801 |
|
|
|
(1,015 |
) |
|
|
176,497 |
|
|
Operating income (loss) |
|
|
9,723 |
|
|
|
3,167 |
|
|
|
396 |
|
|
|
(2,730 |
) |
|
|
10,556 |
|
|
Depreciation and amortization |
|
|
7,153 |
|
|
|
2,393 |
|
|
|
4,129 |
|
|
|
141 |
|
|
|
13,816 |
|
|
EBITDA |
|
|
16,876 |
|
|
|
5,560 |
|
|
|
4,525 |
|
|
|
(2,589 |
) |
|
|
24,372 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(212 |
) |
|
|
(212 |
) |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
90 |
|
|
|
- |
|
|
|
- |
|
|
|
90 |
|
|
Adjusted EBITDA |
|
$ |
16,876 |
|
|
$ |
5,650 |
|
|
$ |
4,525 |
|
|
$ |
(2,801 |
) |
|
$ |
24,250 |
|
|
Adjusted EBITDA Margin % |
|
|
13 |
% |
|
|
15 |
% |
|
|
8 |
% |
|
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended April 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
130,910 |
|
|
$ |
12,125 |
|
|
$ |
- |
|
|
$ |
(1,065 |
) |
|
$ |
141,970 |
|
|
Cost of sales |
|
|
102,332 |
|
|
|
9,102 |
|
|
|
- |
|
|
|
(622 |
) |
|
|
110,812 |
|
|
Operating income (loss) |
|
|
6,491 |
|
|
|
545 |
|
|
|
- |
|
|
|
(3,347 |
) |
|
|
3,689 |
|
|
Depreciation and amortization |
|
|
7,247 |
|
|
|
391 |
|
|
|
- |
|
|
|
193 |
|
|
|
7,831 |
|
|
EBITDA |
|
|
13,738 |
|
|
|
936 |
|
|
|
- |
|
|
|
(3,154 |
) |
|
|
11,520 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
106 |
|
|
|
106 |
|
|
Adjusted EBITDA |
|
$ |
13,738 |
|
|
$ |
936 |
|
|
$ |
- |
|
|
$ |
(3,048 |
) |
|
$ |
11,626 |
|
|
Adjusted EBITDA Margin % |
|
|
10 |
% |
|
|
8 |
% |
|
|
0 |
% |
|
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended April 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
255,567 |
|
|
$ |
70,033 |
|
|
$ |
108,080 |
|
|
$ |
(2,752 |
) |
|
$ |
430,928 |
|
|
Cost of sales |
|
|
194,921 |
|
|
|
49,165 |
|
|
|
93,340 |
|
|
|
(1,581 |
) |
|
|
335,845 |
|
|
Operating income (loss) |
|
|
15,240 |
|
|
|
4,519 |
|
|
|
(895 |
) |
|
|
(10,446 |
) |
|
|
8,418 |
|
|
Depreciation and amortization |
|
|
14,361 |
|
|
|
4,851 |
|
|
|
7,274 |
|
|
|
300 |
|
|
|
26,786 |
|
|
EBITDA |
|
|
29,601 |
|
|
|
9,370 |
|
|
|
6,379 |
|
|
|
(10,146 |
) |
|
|
35,204 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,878 |
|
|
|
4,878 |
|
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
284 |
|
|
|
2,287 |
|
|
|
- |
|
|
|
2,571 |
|
|
Adjusted EBITDA |
|
$ |
29,601 |
|
|
$ |
9,654 |
|
|
$ |
8,666 |
|
|
$ |
(5,268 |
) |
|
$ |
42,653 |
|
|
Adjusted EBITDA Margin % |
|
|
12 |
% |
|
|
14 |
% |
|
|
8 |
% |
|
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months
ended April 30, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
248,741 |
|
|
$ |
23,307 |
|
|
$ |
- |
|
|
$ |
(2,185 |
) |
|
$ |
269,863 |
|
|
Cost of sales |
|
|
200,243 |
|
|
|
17,551 |
|
|
|
- |
|
|
|
(1,178 |
) |
|
|
216,616 |
|
|
Operating income (loss) |
|
|
4,310 |
|
|
|
712 |
|
|
|
- |
|
|
|
(6,948 |
) |
|
|
(1,926 |
) |
|
Depreciation and amortization |
|
|
14,549 |
|
|
|
812 |
|
|
|
- |
|
|
|
678 |
|
|
|
16,039 |
|
|
EBITDA |
|
|
18,859 |
|
|
|
1,524 |
|
|
|
- |
|
|
|
(6,270 |
) |
|
|
14,113 |
|
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
106 |
|
|
|
106 |
|
|
Adjusted EBITDA |
|
$ |
18,859 |
|
|
$ |
1,524 |
|
|
$ |
- |
|
|
$ |
(6,164 |
) |
|
$ |
14,219 |
|
|
Adjusted EBITDA Margin % |
|
|
8 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
|
SALES ANALYSIS |
|
(In thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Bridge for Three Months Ended April 30,
2016 |
|
|
|
NA Engineered |
|
EU Engineered |
|
NA Cabinet |
|
Unallocated |
|
|
|
|
|
Components |
|
Components |
|
Components |
|
Corporate & Other |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales, three months ended April 30, 2015 |
|
$ |
130,910 |
|
|
$ |
12,125 |
|
|
$ |
- |
|
|
$ |
(1,065 |
) |
|
$ |
141,970 |
|
|
Market volume |
|
|
7,477 |
|
|
|
688 |
|
|
|
- |
|
|
|
(514 |
) |
|
|
7,651 |
|
|
Eliminated products |
|
|
(953 |
) |
|
-
|
|
|
- |
|
|
|
- |
|
|
|
(953 |
) |
|
Price changes |
|
|
(563 |
) |
|
|
(556 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,119 |
) |
|
Foreign currency impacts |
|
|
- |
|
|
|
(134 |
) |
|
|
- |
|
|
|
- |
|
|
|
(134 |
) |
|
Mergers & acquisitions |
|
|
- |
|
|
|
24,842 |
|
|
|
59,555 |
|
|
|
- |
|
|
|
84,397 |
|
|
Raw material pass through
adjustments |
|
|
(2,352 |
) |
|
-
|
|
|
- |
|
|
|
- |
|
|
|
(2,352 |
) |
|
Net
Sales, three months ended April 30, 2016 |
|
$ |
134,519 |
|
|
$ |
36,965 |
|
|
$ |
59,555 |
|
|
$ |
(1,579 |
) |
|
$ |
229,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Bridge for Six Months Ended April 30,
2016 |
|
|
|
NA Engineered |
|
EU Engineered |
|
NA Cabinet |
|
Unallocated |
|
|
|
|
|
Components |
|
Components |
|
Components |
|
Corporate & Other |
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales, six months ended April 30, 2015 |
|
$ |
248,741 |
|
|
$ |
23,307 |
|
|
$ |
- |
|
|
$ |
(2,185 |
) |
|
$ |
269,863 |
|
|
Market volume |
|
|
15,021 |
|
|
|
2,167 |
|
|
|
- |
|
|
|
(567 |
) |
|
|
16,621 |
|
|
Eliminated products |
|
|
(3,417 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,417 |
) |
|
Price changes |
|
|
(753 |
) |
|
|
(986 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,739 |
) |
|
Foreign currency impacts |
|
|
- |
|
|
|
(1,184 |
) |
|
|
- |
|
|
|
- |
|
|
|
(1,184 |
) |
|
Mergers & acquisitions |
|
|
- |
|
|
|
46,729 |
|
|
|
108,080 |
|
|
|
- |
|
|
|
154,809 |
|
|
Raw material pass through
adjustments |
|
|
(4,025 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,025 |
) |
|
Net
Sales, six months ended April 30, 2016 |
|
$ |
255,567 |
|
|
$ |
70,033 |
|
|
$ |
108,080 |
|
|
$ |
(2,752 |
) |
|
$ |
430,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information contact
Scott Zuehlke,
Vice President of Investor Relations & Treasurer,
at 713-877-5327 or scott.zuehlke@quanex.com.
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