Strong Underlying Growth in NA and EU
Engineered Components SegmentsPrice Increases
Taking Hold in Response to Inflationary
PressuresSolid Free Cash Flow Generation Further
Improves Leverage Ratio
Quanex Building Products Corporation (NYSE:NX)
(“Quanex” or the “Company”) today announced its results for the
three months ended April 30, 2018.
Bill Griffiths, Chairman, President and Chief
Executive Officer, commented, “Similar to the first quarter, we
continued to see strong underlying growth in both our North
American and European Engineered Components segments. We also
generated solid free cash flow during the second quarter, which
enabled us to further strengthen our balance sheet by paying down
bank debt and improving our leverage ratio.”
Mr. Griffiths continued, “While margins
continued to be impacted by inflationary pressures, the margin
contraction narrowed compared to the first quarter of 2018 as a
result of the implementation of a series of price increases towards
the end of the second quarter. These increases should offset
inflationary costs in the second half and together with continued
improvements in operating efficiencies we should see margin
expansion in the fourth quarter. This, and the expected
positive impact from seasonality, gives us confidence in
reaffirming our full year guidance of $890 million to $900 million
in revenues and adjusted EBITDA of $103 million to $108
million.”
Second Quarter 2018 Results
Summary
The Company reported the following selected
financial results:
|
|
|
|
|
|
|
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net Sales |
|
$214.2 |
|
$209.1 |
|
$405.9 |
|
$404.2 |
Net Income (Loss) |
|
$4.1 |
|
$1.5 |
|
$9.1 |
|
($2.3) |
Diluted EPS |
|
$0.12 |
|
$0.04 |
|
$0.26 |
|
($0.07) |
|
|
|
|
|
|
|
|
|
Adjusted Net
Income |
|
$4.8 |
|
$3.8 |
|
$3.5 |
|
$2.4 |
Adjusted Diluted
EPS |
|
$0.14 |
|
$0.11 |
|
$0.10 |
|
$0.07 |
Adjusted EBITDA |
|
$21.7 |
|
$20.5 |
|
$34.9 |
|
$33.6 |
(See Non-GAAP Terminology Definitions and
Disclaimers section, Non-GAAP Financial Measure Disclosure table
and Selected Segment Data table for additional information)
The increase in net sales during the second
quarter of 2018 was mainly driven by market and new products growth
in addition to price increases largely related to raw material
inflation recovery and a favorable foreign exchange impact.
(See Sales Analysis table for additional information)
The increase in earnings was largely due to
lower stock-based compensation expense and a lower effective tax
rate as a result of the enactment of the Tax Cuts and Jobs
Act.
As of April 30, 2018, the Company’s leverage
ratio of Net Debt to LTM Adjusted EBITDA improved to 2.2x and
Quanex expects to end fiscal 2018 with this leverage ratio below
2.0x. (See Non-GAAP Terminology Definitions and Disclaimers
section for additional information)
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, 2018, to shareholders of record on June 15,
2018.
Conference Call and Webcast
Information
The Company has scheduled a conference call for
Tuesday, June 5, 2018, 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 6446248, 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 12, 2018. To access the
replay dial (855) 859-2056 for domestic callers and (404) 537-3406
for international callers, in both cases referencing conference
passcode 6446248.
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, Investor Relations & Treasurer, at 713-877-5327 or
scott.zuehlke@quanex.com.
Non-GAAP Terminology Definitions and
Disclaimers
Adjusted Net Income (Loss) (defined as net
income further adjusted to exclude purchase price accounting
inventory step-ups, transaction costs, gain/loss on the sale of
fixed assets, restructuring charges, other net adjustments related
to foreign currency transaction gain/loss and effective tax rates
reflecting impacts of adjustments on a with and without basis) and
Adjusted EPS are non-GAAP financial measures that Quanex believes
provide a consistent basis for comparison between periods and more
accurately reflects operational performance, as they are not
influenced by certain income or expense items not affecting ongoing
operations. EBITDA (defined as net income or loss before interest,
taxes, depreciation and amortization and other, net) and Adjusted
EBITDA (defined as EBITDA further adjusted to exclude purchase
price accounting inventory step-ups, transaction costs, gain/loss
on the sale of fixed assets, and restructuring charges) are
non-GAAP financial measures that the Company uses to measure
operational performance and assist with financial
decision-making. When Quanex provides expectations for
Adjusted EBITDA on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and corresponding
GAAP measures is generally not available without unreasonable
effort. 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 the Company believes is
useful to investors and financial analysts in evaluating Quanex’s
leverage. In addition, with certain limited adjustments, this
leverage ratio is the basis for a key covenant in the Company’s
credit agreement. Free Cash Flow is a non-GAAP measure
calculated using cash provided by operating activities less capital
expenditures. Quanex 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, 2017, 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 NET
INCOME (LOSS) |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended April 30, |
|
Six Months Ended April 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
214,212 |
|
|
$ |
209,133 |
|
|
$ |
405,878 |
|
|
$ |
404,229 |
|
Cost of sales |
|
|
168,741 |
|
|
|
162,132 |
|
|
|
323,181 |
|
|
|
317,079 |
|
Selling, general and
administrative |
|
|
23,783 |
|
|
|
26,916 |
|
|
|
47,859 |
|
|
|
54,361 |
|
Restructuring
charges |
|
|
242 |
|
|
|
1,080 |
|
|
|
608 |
|
|
|
2,219 |
|
Depreciation and
amortization |
|
|
13,310 |
|
|
|
14,380 |
|
|
|
26,583 |
|
|
|
29,786 |
|
Operating income |
|
|
8,136 |
|
|
|
4,625 |
|
|
|
7,647 |
|
|
|
784 |
|
Interest expense |
|
|
(2,502 |
) |
|
|
(2,391 |
) |
|
|
(4,943 |
) |
|
|
(4,551 |
) |
Other, net |
|
|
(105 |
) |
|
|
(135 |
) |
|
|
212 |
|
|
|
526 |
|
Income (loss) before
income taxes |
|
|
5,529 |
|
|
|
2,099 |
|
|
|
2,916 |
|
|
|
(3,241 |
) |
Income tax (expense)
benefit |
|
|
(1,393 |
) |
|
|
(637 |
) |
|
|
6,167 |
|
|
|
977 |
|
Net income (loss) |
|
$ |
4,136 |
|
|
$ |
1,462 |
|
|
$ |
9,083 |
|
|
$ |
(2,264 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) per
common share, basic |
|
$ |
0.12 |
|
|
$ |
0.04 |
|
|
$ |
0.26 |
|
|
$ |
(0.07 |
) |
Income (loss) per
common share, diluted |
|
$ |
0.12 |
|
|
$ |
0.04 |
|
|
$ |
0.26 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
34,796 |
|
|
|
34,146 |
|
|
|
34,731 |
|
|
|
34,099 |
|
Diluted |
|
|
35,115 |
|
|
|
34,769 |
|
|
|
35,166 |
|
|
|
34,099 |
|
|
|
|
|
|
|
|
|
|
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, 2018 |
|
October 31, 2017 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
10,098 |
|
|
$ |
17,455 |
|
Accounts
receivable, net |
|
|
76,594 |
|
|
|
79,411 |
|
Inventories, net |
|
|
92,928 |
|
|
|
87,529 |
|
Prepaid
and other current assets |
|
|
8,527 |
|
|
|
7,406 |
|
Total
current assets |
|
|
188,147 |
|
|
|
191,801 |
|
Property, plant and
equipment, net |
|
|
209,459 |
|
|
|
211,131 |
|
Goodwill |
|
|
224,728 |
|
|
|
222,194 |
|
Intangible assets,
net |
|
|
133,193 |
|
|
|
139,778 |
|
Other assets |
|
|
9,244 |
|
|
|
8,975 |
|
Total
assets |
|
$ |
764,771 |
|
|
$ |
773,879 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
44,492 |
|
|
$ |
44,150 |
|
Accrued
liabilities |
|
|
34,576 |
|
|
|
38,871 |
|
Income
taxes payable |
|
|
2,284 |
|
|
|
2,192 |
|
Current
maturities of long-term debt |
|
|
16,167 |
|
|
|
21,242 |
|
Total
current liabilities |
|
|
97,519 |
|
|
|
106,455 |
|
Long-term debt |
|
|
210,857 |
|
|
|
218,184 |
|
Deferred pension and
postretirement benefits |
|
|
5,890 |
|
|
|
4,433 |
|
Deferred income
taxes |
|
|
14,889 |
|
|
|
21,960 |
|
Other liabilities |
|
|
15,290 |
|
|
|
16,000 |
|
Total
liabilities |
|
|
344,445 |
|
|
|
367,032 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
|
|
375 |
|
|
|
375 |
|
Additional paid-in-capital |
|
|
253,269 |
|
|
|
255,719 |
|
Retained
earnings |
|
|
230,945 |
|
|
|
225,704 |
|
Accumulated other comprehensive loss |
|
|
(19,951 |
) |
|
|
(25,076 |
) |
Treasury
stock at cost |
|
|
(44,312 |
) |
|
|
(49,875 |
) |
Total
stockholders’ equity |
|
|
420,326 |
|
|
|
406,847 |
|
Total
liabilities and stockholders' equity |
|
$ |
764,771 |
|
|
$ |
773,879 |
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOW |
(In thousands) |
(Unaudited) |
|
|
|
|
|
Six Months Ended April 30, |
|
2018 |
|
2017 (1) |
Operating activities: |
|
|
|
Net
income (loss) |
$ |
9,083 |
|
|
$ |
(2,264 |
) |
Adjustments to reconcile net income (loss) to cash provided by
operating activities: |
|
|
Depreciation and amortization |
|
26,583 |
|
|
|
29,786 |
|
Stock-based compensation |
|
211 |
|
|
|
3,222 |
|
Deferred
income tax |
|
(8,087 |
) |
|
|
(4,233 |
) |
Other,
net |
|
(321 |
) |
|
|
1,355 |
|
Changes
in assets and liabilities: |
|
|
|
Decrease
in accounts receivable |
|
3,357 |
|
|
|
4,564 |
|
Increase
in inventory |
|
(4,623 |
) |
|
|
(6,593 |
) |
Increase
in other current assets |
|
(1,047 |
) |
|
|
(506 |
) |
Increase
(decrease) in accounts payable |
|
378 |
|
|
|
(7,170 |
) |
Decrease
in accrued liabilities |
|
(5,220 |
) |
|
|
(7,469 |
) |
Increase
in income taxes payable |
|
25 |
|
|
|
3,215 |
|
Increase
in deferred pension and postretirement benefits |
|
1,457 |
|
|
|
1,682 |
|
(Decrease) increase in other long-term liabilities |
|
(38 |
) |
|
|
945 |
|
Other,
net |
|
(143 |
) |
|
|
195 |
|
Cash provided by
operating activities |
|
21,615 |
|
|
|
16,729 |
|
Investing activities: |
|
|
|
Acquisitions, net of cash acquired |
|
- |
|
|
|
(8,497 |
) |
Capital
expenditures |
|
(15,213 |
) |
|
|
(17,550 |
) |
Proceeds
from disposition of capital assets |
|
180 |
|
|
|
593 |
|
Cash used for investing
activities |
|
(15,033 |
) |
|
|
(25,454 |
) |
Financing activities: |
|
|
|
Borrowings under credit facilities |
|
21,500 |
|
|
|
53,500 |
|
Repayments of credit facility borrowings |
|
(34,000 |
) |
|
|
(52,250 |
) |
Repayments of other long-term debt |
|
(442 |
) |
|
|
(1,363 |
) |
Common
stock dividends paid |
|
(2,800 |
) |
|
|
(2,749 |
) |
Issuance
of common stock |
|
2,564 |
|
|
|
1,726 |
|
Payroll
tax paid to settle shares forfeited upon vesting of stock |
|
(706 |
) |
|
|
(957 |
) |
Cash used for financing
activities |
|
(13,884 |
) |
|
|
(2,093 |
) |
Effect of
exchange rate changes on cash and cash equivalents |
|
(55 |
) |
|
|
(195 |
) |
Decrease in cash and
cash equivalents |
|
(7,357 |
) |
|
|
(11,013 |
) |
Cash and cash
equivalents at beginning of period |
|
17,455 |
|
|
|
25,526 |
|
Cash and cash
equivalents at end of period |
$ |
10,098 |
|
|
$ |
14,513 |
|
|
|
|
|
|
|
|
|
(1)
Updated to reflect adoption of ASU 2016-09. |
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
NON-GAAP FINANCIAL MEASURE
DISCLOSURE |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Six Months Ended |
|
|
Reconciliation
of Adjusted Net Income (Loss) and Adjusted EPS |
|
April 30, 2018 |
|
|
April 30, 2017 |
|
|
April 30, 2018 |
|
|
April 30, 2017 |
|
|
|
|
Net Income |
|
Diluted EPS |
|
|
Net Income |
|
Diluted EPS |
|
|
Net Income |
|
Diluted EPS |
|
|
Net Income |
|
Diluted EPS |
|
|
Net
income (loss) as reported |
|
$ |
4,136 |
|
|
$ |
0.12 |
|
|
|
$ |
1,462 |
|
|
$ |
0.04 |
|
|
|
$ |
9,083 |
|
|
$ |
0.26 |
|
|
|
$ |
(2,264 |
) |
|
$ |
(0.07 |
) |
|
|
Reconciling items from below |
|
|
665 |
|
|
|
0.02 |
|
|
|
|
2,330 |
|
|
|
0.07 |
|
|
|
|
(5,555 |
) |
|
|
(0.16 |
) |
|
|
|
4,688 |
|
|
|
0.14 |
|
|
|
Adjusted
net income (loss) and adjusted EPS |
|
$ |
4,801 |
|
|
$ |
0.14 |
|
|
|
$ |
3,792 |
|
|
$ |
0.11 |
|
|
|
$ |
3,528 |
|
|
$ |
0.10 |
|
|
|
$ |
2,424 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Adjusted EBITDA |
|
Three Months Ended April 30,
2018 |
|
|
Three Months Ended April 30,
2017 |
|
|
Six Months Ended April 30,
2018 |
|
|
Six Months Ended April 30,
2017 |
|
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
|
Net
income (loss) as reported |
|
$ |
4,136 |
|
|
|
|
|
$ |
1,462 |
|
|
|
|
|
$ |
9,083 |
|
|
|
|
|
$ |
(2,264 |
) |
|
|
|
|
Income
tax benefit |
|
|
1,393 |
|
|
|
|
|
|
637 |
|
|
|
|
|
|
(6,167 |
) |
|
|
|
|
|
(977 |
) |
|
|
|
|
Other,
net |
|
|
105 |
|
|
|
|
|
|
135 |
|
|
|
|
|
|
(212 |
) |
|
|
|
|
|
(526 |
) |
|
|
|
|
Interest
expense |
|
|
2,502 |
|
|
|
|
|
|
2,391 |
|
|
|
|
|
|
4,943 |
|
|
|
|
|
|
4,551 |
|
|
|
|
|
Depreciation and amortization |
|
|
13,310 |
|
|
|
|
|
|
14,380 |
|
|
|
|
|
|
26,583 |
|
|
|
|
|
|
29,786 |
|
|
|
|
|
EBITDA |
|
|
21,446 |
|
|
|
|
|
|
19,005 |
|
|
|
|
|
|
34,230 |
|
|
|
|
|
|
30,570 |
|
|
|
|
|
Reconciling items from below |
|
|
244 |
|
|
|
|
|
|
1,523 |
|
|
|
|
|
|
622 |
|
|
|
|
|
|
2,993 |
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
21,690 |
|
|
|
|
|
$ |
20,528 |
|
|
|
|
|
$ |
34,852 |
|
|
|
|
|
$ |
33,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
Items |
|
Three Months Ended April 30,
2018 |
|
|
Three Months Ended April 30,
2017 |
|
|
Six Months Ended April 30,
2018 |
|
|
Six Months Ended April 30,
2017 |
|
|
|
|
Income Statement |
|
Reconciling
Items |
|
|
Income Statement |
|
Reconciling
Items |
|
|
Income Statement |
|
Reconciling
Items |
|
|
Income Statement |
|
Reconciling
Items |
|
|
Net
sales |
|
$ |
214,212 |
|
|
$ |
- |
|
|
|
$ |
209,133 |
|
|
$ |
- |
|
|
|
$ |
405,878 |
|
|
$ |
- |
|
|
|
$ |
404,229 |
|
|
$ |
- |
|
|
|
Cost of
sales |
|
|
168,741 |
|
|
|
- |
|
|
|
|
162,132 |
|
|
|
(90 |
) |
(1 |
) |
|
|
323,181 |
|
|
|
- |
|
|
|
|
317,079 |
|
|
|
(104 |
) |
(1 |
) |
|
Selling,
general and administrative |
|
|
23,783 |
|
|
|
(2 |
) |
(2 |
) |
|
|
26,916 |
|
|
|
(353 |
) |
(2 |
) |
|
|
47,859 |
|
|
|
(14 |
) |
(2 |
) |
|
|
54,361 |
|
|
|
(670 |
) |
(2 |
) |
|
Restructuring charges |
|
|
242 |
|
|
|
(242 |
) |
(3 |
) |
|
|
1,080 |
|
|
|
(1,080 |
) |
(3 |
) |
|
|
608 |
|
|
|
(608 |
) |
(3 |
) |
|
|
2,219 |
|
|
|
(2,219 |
) |
(3 |
) |
|
EBITDA |
|
|
21,446 |
|
|
|
244 |
|
|
|
|
19,005 |
|
|
|
1,523 |
|
|
|
|
34,230 |
|
|
|
622 |
|
|
|
|
30,570 |
|
|
|
2,993 |
|
|
|
Depreciation and amortization |
|
|
13,310 |
|
|
|
(504 |
) |
(4 |
) |
|
|
14,380 |
|
|
|
(1,692 |
) |
(5 |
) |
|
|
26,583 |
|
|
|
(852 |
) |
(4 |
) |
|
|
29,786 |
|
|
|
(4,225 |
) |
(5 |
) |
|
Operating income |
|
|
8,136 |
|
|
|
748 |
|
|
|
|
4,625 |
|
|
|
3,215 |
|
|
|
|
7,647 |
|
|
|
1,474 |
|
|
|
|
784 |
|
|
|
7,218 |
|
|
|
Interest
expense |
|
|
(2,502 |
) |
|
|
- |
|
|
|
|
(2,391 |
) |
|
|
- |
|
|
|
|
(4,943 |
) |
|
|
- |
|
|
|
|
(4,551 |
) |
|
|
- |
|
|
|
Other,
net |
|
|
(105 |
) |
|
|
132 |
|
(6 |
) |
|
|
(135 |
) |
|
|
155 |
|
(6 |
) |
|
|
212 |
|
|
|
(167 |
) |
(6 |
) |
|
|
526 |
|
|
|
(475 |
) |
(6 |
) |
|
Income
(loss) before income taxes |
|
|
5,529 |
|
|
|
880 |
|
|
|
|
2,099 |
|
|
|
3,370 |
|
|
|
|
2,916 |
|
|
|
1,307 |
|
|
|
|
(3,241 |
) |
|
|
6,743 |
|
|
|
Income
tax (expense) benefit |
|
|
(1,393 |
) |
|
|
(215 |
) |
(7 |
) |
|
|
(637 |
) |
|
|
(1,040 |
) |
(7 |
) |
|
|
6,167 |
|
|
|
(6,862 |
) |
(7 |
) |
|
|
977 |
|
|
|
(2,055 |
) |
(7 |
) |
|
Net
income (loss) |
|
$ |
4,136 |
|
|
$ |
665 |
|
|
|
$ |
1,462 |
|
|
$ |
2,330 |
|
|
|
$ |
9,083 |
|
|
$ |
(5,555 |
) |
|
|
$ |
(2,264 |
) |
|
$ |
4,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share |
|
$ |
0.12 |
|
|
|
|
|
$ |
0.04 |
|
|
|
|
|
$ |
0.26 |
|
|
|
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Relates solely to purchase price accounting inventory step-up
impact from HL Plastics acquisition. |
(2)
Acquisition related transaction costs and in 2017, loss on sale of
fixed assets related to the closure of a plant and a one-time
employee benefit adjustment. |
(3)
Restructuring charges relate to the closure of several
manufacturing plant facilities. |
(4)
Accelerated depreciation for plant re-layout in the North American
Cabinet Components segment. |
(5)
Accelerated depreciation and amortization for restructured PP&E
and intangible assets. |
(6)
Foreign currency transaction losses (gains). |
(7) Impact
on a with and without basis. Six monhs ended April 30, 2018
includes $6.5 million adjustment related to the Tax Cuts and Jobs
Act. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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- and six-months ended April 30, 2017, to the
current presentation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NA EngineeredComponents |
|
EU EngineeredComponents |
|
NA CabinetComponents |
|
Unallocated Corp &
Other |
|
Total |
Three months
ended April 30, 2017 |
|
|
|
|
|
|
|
|
|
|
As previously
reported |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
116,410 |
|
|
$ |
34,205 |
|
$ |
59,147 |
|
|
$ |
(629 |
) |
|
$ |
209,133 |
Cost of
sales |
|
|
88,424 |
|
|
|
23,764 |
|
|
50,281 |
|
|
|
(337 |
) |
|
|
162,132 |
Selling,
general and administrative |
|
|
13,466 |
|
|
|
5,198 |
|
|
4,401 |
|
|
|
3,851 |
|
|
|
26,916 |
Restructuring costs |
|
|
914 |
|
|
|
- |
|
|
166 |
|
|
|
- |
|
|
|
1,080 |
Depreciation and amortization |
|
|
8,669 |
|
|
|
2,306 |
|
|
3,265 |
|
|
|
140 |
|
|
|
14,380 |
Operating
income (loss) |
|
$ |
4,937 |
|
|
$ |
2,937 |
|
$ |
1,034 |
|
|
$ |
(4,283 |
) |
|
$ |
4,625 |
|
|
|
|
|
|
|
|
|
|
|
Reclassification |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
(5,245 |
) |
|
$ |
- |
|
$ |
5,933 |
|
|
$ |
(688 |
) |
|
$ |
- |
Cost of
sales |
|
|
(4,092 |
) |
|
|
- |
|
|
4,780 |
|
|
|
(688 |
) |
|
|
- |
Selling,
general and administrative |
|
|
(56 |
) |
|
|
- |
|
|
56 |
|
|
|
- |
|
|
|
- |
Restructuring costs |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
Depreciation and amortization |
|
|
(129 |
) |
|
|
- |
|
|
129 |
|
|
|
- |
|
|
|
- |
Operating
income (loss) |
|
$ |
(968 |
) |
|
$ |
- |
|
$ |
968 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Current
presentation |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
111,165 |
|
|
$ |
34,205 |
|
$ |
65,080 |
|
|
$ |
(1,317 |
) |
|
$ |
209,133 |
Cost of
sales |
|
|
84,332 |
|
|
|
23,764 |
|
|
55,061 |
|
|
|
(1,025 |
) |
|
|
162,132 |
Selling,
general and administrative |
|
|
13,410 |
|
|
|
5,198 |
|
|
4,457 |
|
|
|
3,851 |
|
|
|
26,916 |
Restructuring costs |
|
|
914 |
|
|
|
- |
|
|
166 |
|
|
|
- |
|
|
|
1,080 |
Depreciation and amortization |
|
|
8,540 |
|
|
|
2,306 |
|
|
3,394 |
|
|
|
140 |
|
|
|
14,380 |
Operating
income (loss) |
|
$ |
3,969 |
|
|
$ |
2,937 |
|
$ |
2,002 |
|
|
$ |
(4,283 |
) |
|
$ |
4,625 |
|
|
|
|
|
|
|
|
|
|
|
Six months
ended April 30, 2017 |
|
|
|
|
|
|
|
|
|
|
As previously
reported |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
227,483 |
|
|
$ |
65,774 |
|
$ |
112,144 |
|
|
$ |
(1,172 |
) |
|
$ |
404,229 |
Cost of
sales |
|
|
174,817 |
|
|
|
46,302 |
|
|
96,518 |
|
|
|
(558 |
) |
|
|
317,079 |
Selling,
general and administrative |
|
|
27,201 |
|
|
|
9,970 |
|
|
8,511 |
|
|
|
8,679 |
|
|
|
54,361 |
Restructuring costs |
|
|
1,480 |
|
|
|
- |
|
|
739 |
|
|
|
- |
|
|
|
2,219 |
Depreciation and amortization |
|
|
18,747 |
|
|
|
4,362 |
|
|
6,400 |
|
|
|
277 |
|
|
|
29,786 |
Operating
income (loss) |
|
$ |
5,238 |
|
|
$ |
5,140 |
|
$ |
(24 |
) |
|
$ |
(9,570 |
) |
|
$ |
784 |
|
|
|
|
|
|
|
|
|
|
|
Reclassification |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
(10,235 |
) |
|
$ |
- |
|
$ |
11,566 |
|
|
$ |
(1,331 |
) |
|
$ |
- |
Cost of
sales |
|
|
(8,507 |
) |
|
|
- |
|
|
9,838 |
|
|
|
(1,331 |
) |
|
|
- |
Selling,
general and administrative |
|
|
(260 |
) |
|
|
- |
|
|
260 |
|
|
|
- |
|
|
|
- |
Restructuring costs |
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
Depreciation and amortization |
|
|
(269 |
) |
|
|
- |
|
|
269 |
|
|
|
- |
|
|
|
- |
Operating
income (loss) |
|
$ |
(1,199 |
) |
|
$ |
- |
|
$ |
1,199 |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Current
presentation |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
217,248 |
|
|
$ |
65,774 |
|
$ |
123,710 |
|
|
$ |
(2,503 |
) |
|
$ |
404,229 |
Cost of
sales |
|
|
166,310 |
|
|
|
46,302 |
|
|
106,356 |
|
|
|
(1,889 |
) |
|
|
317,079 |
Selling,
general and administrative |
|
|
26,941 |
|
|
|
9,970 |
|
|
8,771 |
|
|
|
8,679 |
|
|
|
54,361 |
Restructuring costs |
|
|
1,480 |
|
|
|
- |
|
|
739 |
|
|
|
- |
|
|
|
2,219 |
Depreciation and amortization |
|
|
18,478 |
|
|
|
4,362 |
|
|
6,669 |
|
|
|
277 |
|
|
|
29,786 |
Operating
income (loss) |
|
$ |
4,039 |
|
|
$ |
5,140 |
|
$ |
1,175 |
|
|
$ |
(9,570 |
) |
|
$ |
784 |
|
|
|
|
|
|
|
|
|
|
|
|
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 EngineeredComponents |
|
EU EngineeredComponents |
|
NA CabinetComponents |
|
Unallocated Corp &
Other |
|
Total |
Three months
ended April 30, 2018 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
114,157 |
|
|
$ |
38,824 |
|
|
$ |
62,668 |
|
|
$ |
(1,437 |
) |
|
$ |
214,212 |
|
Cost of
sales |
|
|
88,130 |
|
|
|
27,589 |
|
|
|
54,101 |
|
|
|
(1,079 |
) |
|
|
168,741 |
|
Selling,
general and administrative |
|
|
13,422 |
|
|
|
6,255 |
|
|
|
4,522 |
|
|
|
(416 |
) |
|
|
23,783 |
|
Restructuring charges |
|
|
238 |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
|
242 |
|
Depreciation and amortization |
|
|
6,808 |
|
|
|
2,527 |
|
|
|
3,839 |
|
|
|
136 |
|
|
|
13,310 |
|
Operating
income (loss) |
|
|
5,559 |
|
|
|
2,453 |
|
|
|
202 |
|
|
|
(78 |
) |
|
|
8,136 |
|
Depreciation and amortization |
|
|
6,808 |
|
|
|
2,527 |
|
|
|
3,839 |
|
|
|
136 |
|
|
|
13,310 |
|
EBITDA |
|
|
12,367 |
|
|
|
4,980 |
|
|
|
4,041 |
|
|
|
58 |
|
|
|
21,446 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
2 |
|
Restructuring charges |
|
|
238 |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
|
242 |
|
Adjusted
EBITDA |
|
$ |
12,605 |
|
|
$ |
4,980 |
|
|
$ |
4,045 |
|
|
$ |
60 |
|
|
$ |
21,690 |
|
Adjusted
EBITDA Margin % |
|
|
11.0 |
% |
|
|
12.8 |
% |
|
|
6.5 |
% |
|
|
|
|
10.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended April 30, 2017 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
111,165 |
|
|
$ |
34,205 |
|
|
$ |
65,080 |
|
|
$ |
(1,317 |
) |
|
$ |
209,133 |
|
Cost of
sales |
|
|
84,332 |
|
|
|
23,764 |
|
|
|
55,061 |
|
|
|
(1,025 |
) |
|
|
162,132 |
|
Selling,
general and administrative |
|
|
13,410 |
|
|
|
5,198 |
|
|
|
4,457 |
|
|
|
3,851 |
|
|
|
26,916 |
|
Restructuring charges |
|
|
914 |
|
|
|
- |
|
|
|
166 |
|
|
|
- |
|
|
|
1,080 |
|
Depreciation and amortization |
|
|
8,540 |
|
|
|
2,306 |
|
|
|
3,394 |
|
|
|
140 |
|
|
|
14,380 |
|
Operating
income (loss) |
|
|
3,969 |
|
|
|
2,937 |
|
|
|
2,002 |
|
|
|
(4,283 |
) |
|
|
4,625 |
|
Depreciation and amortization |
|
|
8,540 |
|
|
|
2,306 |
|
|
|
3,394 |
|
|
|
140 |
|
|
|
14,380 |
|
EBITDA |
|
|
12,509 |
|
|
|
5,243 |
|
|
|
5,396 |
|
|
|
(4,143 |
) |
|
|
19,005 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
232 |
|
|
|
232 |
|
Mexico
restructuring, loss on sale of fixed assets |
|
|
- |
|
|
|
- |
|
|
|
(67 |
) |
|
|
- |
|
|
|
(67 |
) |
One-time
employee benefit adjustment |
|
|
- |
|
|
|
- |
|
|
|
188 |
|
|
|
- |
|
|
|
188 |
|
Restructuring charges |
|
|
914 |
|
|
|
- |
|
|
|
166 |
|
|
|
- |
|
|
|
1,080 |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
90 |
|
|
|
- |
|
|
|
- |
|
|
|
90 |
|
Adjusted
EBITDA |
|
$ |
13,423 |
|
|
$ |
5,333 |
|
|
$ |
5,683 |
|
|
$ |
(3,911 |
) |
|
$ |
20,528 |
|
Adjusted
EBITDA Margin % |
|
|
12.1 |
% |
|
|
15.6 |
% |
|
|
8.7 |
% |
|
|
|
|
9.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Six months
ended April 30, 2018 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
216,883 |
|
|
$ |
72,820 |
|
|
$ |
118,590 |
|
|
$ |
(2,415 |
) |
|
$ |
405,878 |
|
Cost of
sales |
|
|
168,157 |
|
|
|
52,421 |
|
|
|
104,311 |
|
|
|
(1,708 |
) |
|
|
323,181 |
|
Selling,
general and administrative |
|
|
27,246 |
|
|
|
11,683 |
|
|
|
9,310 |
|
|
|
(380 |
) |
|
|
47,859 |
|
Restructuring charges |
|
|
489 |
|
|
|
- |
|
|
|
119 |
|
|
|
- |
|
|
|
608 |
|
Depreciation and amortization |
|
|
13,819 |
|
|
|
4,976 |
|
|
|
7,525 |
|
|
|
263 |
|
|
|
26,583 |
|
Operating
income (loss) |
|
|
7,172 |
|
|
|
3,740 |
|
|
|
(2,675 |
) |
|
|
(590 |
) |
|
|
7,647 |
|
Depreciation and amortization |
|
|
13,819 |
|
|
|
4,976 |
|
|
|
7,525 |
|
|
|
263 |
|
|
|
26,583 |
|
EBITDA |
|
|
20,991 |
|
|
|
8,716 |
|
|
|
4,850 |
|
|
|
(327 |
) |
|
|
34,230 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
14 |
|
|
|
14 |
|
Restructuring charges |
|
|
489 |
|
|
|
- |
|
|
|
119 |
|
|
|
- |
|
|
|
608 |
|
Adjusted
EBITDA |
|
$ |
21,480 |
|
|
$ |
8,716 |
|
|
$ |
4,969 |
|
|
$ |
(313 |
) |
|
$ |
34,852 |
|
Adjusted
EBITDA Margin % |
|
|
9.9 |
% |
|
|
12.0 |
% |
|
|
4.2 |
% |
|
|
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Six months
ended April 30, 2017 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
217,248 |
|
|
$ |
65,774 |
|
|
$ |
123,710 |
|
|
$ |
(2,503 |
) |
|
$ |
404,229 |
|
Cost of
sales |
|
|
166,310 |
|
|
|
46,302 |
|
|
|
106,356 |
|
|
|
(1,889 |
) |
|
|
317,079 |
|
Selling,
general and administrative |
|
|
26,941 |
|
|
|
9,970 |
|
|
|
8,771 |
|
|
|
8,679 |
|
|
|
54,361 |
|
Restructuring charges |
|
|
1,480 |
|
|
|
- |
|
|
|
739 |
|
|
|
- |
|
|
|
2,219 |
|
Depreciation and amortization |
|
|
18,478 |
|
|
|
4,362 |
|
|
|
6,669 |
|
|
|
277 |
|
|
|
29,786 |
|
Operating
income (loss) |
|
|
4,039 |
|
|
|
5,140 |
|
|
|
1,175 |
|
|
|
(9,570 |
) |
|
|
784 |
|
Depreciation and amortization |
|
|
18,478 |
|
|
|
4,362 |
|
|
|
6,669 |
|
|
|
277 |
|
|
|
29,786 |
|
EBITDA |
|
|
22,517 |
|
|
|
9,502 |
|
|
|
7,844 |
|
|
|
(9,293 |
) |
|
|
30,570 |
|
Transaction related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
292 |
|
|
|
292 |
|
Mexico
restructuring, loss on disposal of fixed assets |
|
|
- |
|
|
|
- |
|
|
|
190 |
|
|
|
- |
|
|
|
190 |
|
One-time
employee benefit adjustment |
|
|
- |
|
|
|
- |
|
|
|
188 |
|
|
|
- |
|
|
|
188 |
|
Restructuring charges |
|
|
1,480 |
|
|
|
- |
|
|
|
739 |
|
|
|
- |
|
|
|
2,219 |
|
PPA-Inventory Step-up |
|
|
- |
|
|
|
104 |
|
|
|
- |
|
|
|
- |
|
|
|
104 |
|
Adjusted
EBITDA |
|
$ |
23,997 |
|
|
$ |
9,606 |
|
|
$ |
8,961 |
|
|
$ |
(9,001 |
) |
|
$ |
33,563 |
|
Adjusted
EBITDA Margin % |
|
|
11.0 |
% |
|
|
14.6 |
% |
|
|
7.2 |
% |
|
|
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
SALES ANALYSIS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
April 30, 2018 |
|
April 30, 2017
(1) |
|
April 30, 2018 |
|
April 30, 2017
(1) |
|
|
|
|
|
|
|
|
|
NA
Engineered Components: |
|
|
|
|
|
|
|
|
United States -
fenestration (2) |
$ |
97,005 |
|
|
$ |
92,327 |
|
|
$ |
184,787 |
|
|
$ |
182,039 |
|
|
International -
fenestration |
|
8,897 |
|
|
|
8,646 |
|
|
|
15,906 |
|
|
|
14,986 |
|
|
United States -
non-fenestration (3) |
|
4,697 |
|
|
|
6,698 |
|
|
|
8,843 |
|
|
|
12,529 |
|
|
International -
non-fenestration |
|
3,558 |
|
|
|
3,494 |
|
|
|
7,347 |
|
|
|
7,694 |
|
|
|
$ |
114,157 |
|
|
$ |
111,165 |
|
|
$ |
216,883 |
|
|
$ |
217,248 |
|
EU
Engineered Components
(4): |
|
|
|
|
|
|
|
|
United States -
fenestration |
$ |
- |
|
|
$ |
79 |
|
|
$ |
- |
|
|
$ |
114 |
|
|
International -
fenestration (5) |
|
32,847 |
|
|
|
30,536 |
|
|
|
62,716 |
|
|
|
59,441 |
|
|
International -
non-fenestration |
|
5,977 |
|
|
|
3,590 |
|
|
|
10,104 |
|
|
|
6,219 |
|
|
|
$ |
38,824 |
|
|
$ |
34,205 |
|
|
$ |
72,820 |
|
|
$ |
65,774 |
|
NA
Cabinet Components: |
|
|
|
|
|
|
|
|
United States -
fenestration |
$ |
3,403 |
|
|
$ |
3,363 |
|
|
$ |
6,850 |
|
|
$ |
6,696 |
|
|
United States -
non-fenestration (6) |
|
58,698 |
|
|
|
60,965 |
|
|
|
110,703 |
|
|
|
115,655 |
|
|
International -
non-fenestration |
|
567 |
|
|
|
752 |
|
|
|
1,037 |
|
|
|
1,359 |
|
|
|
$ |
62,668 |
|
|
$ |
65,080 |
|
|
$ |
118,590 |
|
|
$ |
123,710 |
|
Unallocated Corporate & Other: |
|
|
|
|
|
|
|
|
Eliminations |
$ |
(1,437 |
) |
|
$ |
(1,317 |
) |
|
$ |
(2,415 |
) |
|
$ |
(2,503 |
) |
|
|
$ |
(1,437 |
) |
|
$ |
(1,317 |
) |
|
$ |
(2,415 |
) |
|
$ |
(2,503 |
) |
|
|
|
|
|
|
|
|
|
Net
Sales |
$ |
214,212 |
|
|
$ |
209,133 |
|
|
$ |
405,878 |
|
|
$ |
404,229 |
|
|
|
|
|
|
|
|
|
|
(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
$3.3 million and $9.1 million for the three and six months ended
April 30, 2018. |
(3)
Reflects the loss of revenue associated with eliminated products of
$2.8 million and $4.7 million for the three and six months ended
April 30, 2018. |
(4)
Reflects a gain of $3.6 million and $6.8 million in revenue
associated with foreign currency exchange rate impacts for the
three and six months ended April 30, 2018. |
(5)
Reflects loss of revenue associated with eliminated products of
$2.1 million and $4.5 million for the three and six months ended
April 30, 2018. |
(6)
Reflects the loss of revenue associated with eliminated products of
$1.3 million and $3.7 million for the three and six months ended
April 30, 2018. |
|
|
|
|
|
|
|
|
|
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