Quanex Building Products Corporation (NYSE:NX)
(“Quanex” or the “Company”) today announced its results for the
three months and twelve months ended October 31, 2020.
The Company reported the following selected
financial results:
|
|
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net
Sales |
|
$255.4 |
|
$240.4 |
|
$851.6 |
|
$893.8 |
Gross
Margin |
|
$66.2 |
|
$57.2 |
|
$192.8 |
|
$199.4 |
Gross Margin % |
|
25.9% |
|
23.8% |
|
22.6% |
|
22.3% |
Net Income
(Loss) |
|
$22.2 |
|
($30.9) |
|
$38.5 |
|
($46.7) |
Diluted
EPS |
|
$0.68 |
|
($0.94) |
|
$1.17 |
|
($1.42) |
|
|
|
|
|
|
|
|
|
Adjusted Net
Income |
|
$22.0 |
|
$14.0 |
|
$40.7 |
|
$31.4 |
Adjusted
Diluted EPS |
|
$0.67 |
|
$0.42 |
|
$1.24 |
|
$0.95 |
Adjusted
EBITDA |
|
$39.4 |
|
$34.4 |
|
$104.5 |
|
$102.7 |
Adjusted EBITDA Margin % |
|
15.4% |
|
14.3% |
|
12.3% |
|
11.5% |
|
|
|
|
|
|
|
|
|
Cash
Provided by Operating Activities |
|
$53.2 |
|
$66.3 |
|
$100.8 |
|
$96.4 |
Free Cash
Flow |
|
$48.2 |
|
$58.4 |
|
$75.1 |
|
$71.5 |
(See Non-GAAP
Terminology Definitions and Disclaimers section, Non-GAAP Financial
Measure Disclosure table Selected Segment Data table and Free Cash
Flow Reconciliation table for additional information) |
George Wilson, President and Chief Executive
Officer, commented, “Our business performed extremely well in the
fourth quarter as we continued to effectively navigate the
complications and uncertainty of a COVID-19 world. Demand for our
products remained strong throughout the quarter, with consolidated
net sales increasing 6.3% year-over-year as compared to the fourth
quarter of 2019. Volumes during the quarter were especially strong
in Europe, and we remain optimistic on the global economic outlook
despite the recent worldwide surge in COVID-19 cases.
“In addition to the lift provided by strong
demand during the fourth quarter, our relentless focus on managing
working capital and generating cash continued to bear fruit
throughout the fiscal year. As a result, we achieved $100.8 million
in cash provided by operating activities in 2020, representing an
increase of 4.6% as compared to 2019. We generated Free Cash Flow
of $75.1 million in 2020, representing a year-over-year increase of
over 5%. We also repaid $35 million of bank debt during the fourth
quarter, which allowed us to improve our leverage ratio of Net Debt
to LTM Adjusted EBITDA to a level well below our original goal of
exiting 2020 at 1.0x. Overall, I am extremely pleased with our
ability to successfully manage both the challenges and the
opportunities presented by the pandemic. Our balance sheet is
stronger now than it was prior to COVID-19, and we are well
positioned to benefit from future tailwinds in the residential
housing industry.” (See Non-GAAP Terminology Definitions and
Disclaimers section for additional information)
Fourth Quarter and
Fiscal 2020
Results Summary
The increase in net sales during the three
months ended October 31, 2020 was largely due to increased demand
for the Company’s products across all operating segments.
Conversely, Quanex reported a decrease in net sales for the twelve
months ended October 31, 2020, which was primarily attributable to
the negative impact of the COVID-19 pandemic on the Company’s
results during the second and third quarters of 2020. More
specifically, in addition to softer demand in North America and
continental Europe during the early stages of the pandemic,
Quanex’s two manufacturing facilities in the UK were shut down in
compliance with government orders in late March, and manufacturing
operations at those plants did not restart until mid-to-late May.
However, volume across all segments increased significantly in
June, and net sales in July through October exceeded prior year on
a consolidated basis. (See Sales Analysis table for
additional information)
The increases in earnings for the three months
ended October 31, 2020 were mainly due to higher volumes, improved
operating leverage and lower raw material costs. The increases in
earnings for the twelve months ended October 31, 2020 were
primarily driven by a decrease in selling, general and
administrative expenses.
Balance Sheet & Liquidity
Update
As of October 31, 2020, the Company’s leverage
ratio of Net Debt to LTM Adjusted EBITDA improved to 0.6x.
(See Non-GAAP Terminology Definitions and Disclaimers section for
additional information)
The Company’s liquidity increased to $268.8
million as of October 31, 2020, consisting of $51.6 million in cash
on hand plus availability under its Senior Secured Revolving Credit
Facility due 2023, less letters of credit outstanding.
Share Repurchases
Quanex’s Board of Directors authorized a $60
million share repurchase program in September of 2018. Repurchases
under this program will be made in open market transactions or
privately negotiated transactions, subject to market conditions,
applicable legal requirements and other relevant factors. The
program does not have an expiration date or a limit on the number
of shares that may be repurchased. The Company repurchased 30,201
shares of common stock for approximately $0.5 million at an average
price of $17.89 per share during the three months ended October 31,
2020, and 450,000 shares of common stock for approximately $7.2
million at an average price of $16.07 per share during the twelve
months ended October 31, 2020. As of October 31, 2020,
approximately $11.2 million remained under the existing share
repurchase authorization.
Outlook
George Wilson, President and Chief Executive
Officer, stated, “We continue to be optimistic about the economic
recovery and our current outlook is positive, especially as regards
our end markets. Based on conversations with our customers, the
latest macro data, and our research into current market trends, we
expect mid-to-high single-digit sales growth in our North American
Fenestration segment, low single-digit sales growth in our North
American Cabinet Components segment, and mid-single-digit sales
growth in our European Fenestration segment. Overall, on a
consolidated basis and assuming there is no adverse impact from the
ongoing pandemic, we believe this will equate to net sales of
approximately $900 million to $920 million, which we expect will
generate between $108 million and $118 million in Adjusted EBITDA*
in fiscal 2021. Our balance sheet is strong and we intend to
concentrate on executing our plan with a continued focus on
creating shareholder value.”
*When Quanex provides expectations for Adjusted
EBITDA on a forward-looking basis, a reconciliation of the
differences between the non-GAAP expectations and corresponding
GAAP measures is generally not available without unreasonable
effort. Certain items required for such a reconciliation are
outside of the Company’s control and/or cannot be reasonably
predicted or estimated, such as the provision for income taxes.
Conference Call and Webcast
Information
The Company has scheduled a conference call for
Friday, December 11, 2020, 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 4046353, 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 December 18, 2020. To access the replay dial
(855) 859-2056 for domestic callers and (404) 537-3406 for
international callers, in both cases referencing conference
passcode 4046353.
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, Senior Vice
President, Chief Financial Officer & Treasurer, at 713-877-5327
or scott.zuehlke@quanex.com.
Non-GAAP Terminology Definitions and
Disclaimers
Adjusted Net Income (Loss) (defined as net
income further adjusted to exclude purchase price accounting
inventory step-ups, transaction costs, certain severance charges,
gain/loss on the sale of certain fixed assets, restructuring
charges, asset impairment charges, other net adjustments related to
foreign currency transaction gain/loss and effective tax rates
reflecting impacts of adjustments on a with and without basis) and
Adjusted EPS are non-GAAP financial measures that Quanex believes
provide a consistent basis for comparison between periods and more
accurately reflects operational performance, as they are not
influenced by certain income or expense items not affecting ongoing
operations. EBITDA (defined as net income or loss before interest,
taxes, depreciation and amortization and other, net) and Adjusted
EBITDA (defined as EBITDA further adjusted to exclude purchase
price accounting inventory step-ups, transaction costs, certain
severance charges, gain/loss on the sale of certain fixed assets,
restructuring charges and asset impairment charges) are non-GAAP
financial measures that the Company uses to measure operational
performance and assist with financial decision-making. 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. Free Cash Flow
is measured before application of certain contractual commitments
(including capital lease obligations), and accordingly is not a
true measure of Quanex’s residual cash flow available for
discretionary expenditures. The Company believes that the presented
non-GAAP measures provide a consistent basis for comparison between
periods, and will assist investors in understanding Quanex’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. The Company does not intend
for this information to be considered in isolation or as a
substitute for other measures prepared in accordance with U.S.
GAAP.
Forward Looking Statements
Statements that use the words “estimated,”
“expect,” “could,” “should,” “believe,” “will,” “might,” or similar
words reflecting future expectations or beliefs are forward-looking
statements. The forward-looking statements include, but are not
limited to, the following: impacts from public health issues
(including pandemics, such as the recent COVID-19 pandemic) on the
economy and the demand for Quanex’s products, the Company’s future
operating results, future financial condition, future uses of cash
and other expenditures, expenses and tax rates, expectations
relating to Quanex’s industry, and the Company’s future growth,
including any guidance discussed in this press release. The
statements and guidance set forth in this release are based on
current expectations. Actual results or events may differ
materially from this release. For a complete discussion of
factors that may affect Quanex’s future performance, please refer
to the Company’s Annual Report on Form 10-K for the fiscal year
ended October 31, 2019, and the Company’s Quarterly Reports on Form
10-Q under the sections entitled “Cautionary Note Regarding
Forward-Looking Statements” and “Risk Factors”. Any forward-looking
statements in this press release are made as of the date hereof,
and Quanex undertakes no obligation to update or revise any
forward-looking statements to reflect new information or
events.
QUANEX
BUILDING PRODUCTS CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) |
(In thousands,
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
255,405 |
|
|
$ |
240,369 |
|
|
$ |
851,573 |
|
|
|
893,841 |
|
Cost of
sales |
|
|
189,164 |
|
|
|
183,128 |
|
|
|
658,750 |
|
|
|
694,420 |
|
Selling,
general and administrative |
|
|
26,889 |
|
|
|
23,826 |
|
|
|
89,707 |
|
|
|
101,292 |
|
Restructuring charges |
|
|
145 |
|
|
|
89 |
|
|
|
622 |
|
|
|
370 |
|
Depreciation
and amortization |
|
|
11,378 |
|
|
|
12,428 |
|
|
|
47,229 |
|
|
|
49,586 |
|
Asset
impairment charges |
|
|
- |
|
|
|
44,622 |
|
|
|
- |
|
|
|
74,600 |
|
Operating
income (loss) |
|
|
27,829 |
|
|
|
(23,724 |
) |
|
|
55,265 |
|
|
|
(26,427 |
) |
Interest
expense |
|
|
(935 |
) |
|
|
(2,029 |
) |
|
|
(5,245 |
) |
|
|
(9,643 |
) |
Other,
net |
|
|
164 |
|
|
|
(345 |
) |
|
|
280 |
|
|
|
116 |
|
Income
(loss) before income taxes |
|
|
27,058 |
|
|
|
(26,098 |
) |
|
|
50,300 |
|
|
|
(35,954 |
) |
Income tax
expense |
|
|
(4,906 |
) |
|
|
(4,850 |
) |
|
|
(11,804 |
) |
|
|
(10,776 |
) |
Net income
(loss) |
|
$ |
22,152 |
|
|
$ |
(30,948 |
) |
|
$ |
38,496 |
|
|
$ |
(46,730 |
) |
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share, basic |
|
$ |
0.68 |
|
|
$ |
(0.94 |
) |
|
$ |
1.18 |
|
|
$ |
(1.42 |
) |
Earnings
(loss) per common share, diluted |
|
$ |
0.68 |
|
|
$ |
(0.94 |
) |
|
$ |
1.17 |
|
|
$ |
(1.42 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
32,608 |
|
|
|
32,893 |
|
|
|
32,689 |
|
|
|
32,960 |
|
Diluted |
|
|
32,811 |
|
|
|
32,893 |
|
|
|
32,821 |
|
|
|
32,960 |
|
|
|
|
|
|
|
|
|
|
Cash
dividends per share |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
QUANEX
BUILDING PRODUCTS CORPORATION |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
October 31, 2020 |
|
October 31, 2019 |
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
51,621 |
|
|
$ |
30,868 |
|
Accounts receivable, net |
|
|
88,287 |
|
|
|
82,946 |
|
Inventories, net |
|
|
61,181 |
|
|
|
67,159 |
|
Prepaid and other current assets |
|
|
6,217 |
|
|
|
9,353 |
|
Total current assets |
|
|
207,306 |
|
|
|
190,326 |
|
Property,
plant and equipment, net |
|
|
184,104 |
|
|
|
193,600 |
|
Operating
lease right-of-use assets |
|
|
51,824 |
|
|
|
- |
|
Goodwill |
|
|
146,154 |
|
|
|
145,563 |
|
Intangible
assets, net |
|
|
93,068 |
|
|
|
107,297 |
|
Other
assets |
|
|
9,129 |
|
|
|
8,324 |
|
Total assets |
|
$ |
691,585 |
|
|
$ |
645,110 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
77,335 |
|
|
$ |
63,604 |
|
Accrued liabilities |
|
|
38,289 |
|
|
|
39,221 |
|
Income taxes payable |
|
|
6,465 |
|
|
|
6,183 |
|
Current maturities of long-term debt |
|
|
692 |
|
|
|
746 |
|
Current operating lease liabilities |
|
|
7,459 |
|
|
|
- |
|
Total current liabilities |
|
|
130,240 |
|
|
|
109,754 |
|
Long-term
debt |
|
|
116,728 |
|
|
|
156,414 |
|
Noncurrent
operating lease liabilities |
|
|
44,873 |
|
|
|
- |
|
Deferred
pension and postretirement benefits |
|
|
10,923 |
|
|
|
13,322 |
|
Deferred
income taxes |
|
|
19,116 |
|
|
|
19,363 |
|
Liabilities
for uncertain tax positions |
|
|
522 |
|
|
|
556 |
|
Other
liabilities |
|
|
13,424 |
|
|
|
15,514 |
|
Total liabilities |
|
|
335,826 |
|
|
|
314,923 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
373 |
|
|
|
374 |
|
Additional paid-in-capital |
|
|
253,458 |
|
|
|
254,673 |
|
Retained earnings |
|
|
213,517 |
|
|
|
185,703 |
|
Accumulated other comprehensive loss |
|
|
(33,024 |
) |
|
|
(33,817 |
) |
Treasury stock at cost |
|
|
(78,565 |
) |
|
|
(76,746 |
) |
Total stockholders’ equity |
|
|
355,759 |
|
|
|
330,187 |
|
Total liabilities and stockholders' equity |
|
$ |
691,585 |
|
|
$ |
645,110 |
|
|
|
|
|
|
QUANEX
BUILDING PRODUCTS CORPORATION |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW |
(In thousands) |
(Unaudited) |
|
|
|
|
|
Twelve Months Ended October 31, |
|
|
2020 |
|
|
|
2019 |
|
Operating activities: |
|
|
|
Net income (loss) |
$ |
38,496 |
|
|
$ |
(46,730 |
) |
Adjustments to reconcile net income (loss) to cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
47,229 |
|
|
|
49,586 |
|
Stock-based compensation |
|
879 |
|
|
|
2,045 |
|
Deferred income tax |
|
(189 |
) |
|
|
3,260 |
|
Loss on the disposition of capital assets |
|
- |
|
|
|
732 |
|
Asset impairment charge |
|
- |
|
|
|
74,600 |
|
Other, net |
|
1,689 |
|
|
|
2,176 |
|
Changes in assets and liabilities: |
|
|
|
(Increase) decrease in accounts receivable |
|
(5,766 |
) |
|
|
574 |
|
Decrease in inventory |
|
6,119 |
|
|
|
3,797 |
|
Decrease (increase) in other current assets |
|
2,896 |
|
|
|
(2,014 |
) |
Increase in accounts payable |
|
15,922 |
|
|
|
8,124 |
|
Decrease in accrued liabilities |
|
(3,156 |
) |
|
|
(6,760 |
) |
Increase in income taxes payable |
|
237 |
|
|
|
3,416 |
|
(Decrease) increase in deferred pension and postretirement
benefits |
|
(2,775 |
) |
|
|
2,531 |
|
(Decrease) increase in other long-term liabilities |
|
(236 |
) |
|
|
513 |
|
Other, net |
|
(549 |
) |
|
|
522 |
|
Cash
provided by operating activities |
|
100,796 |
|
|
|
96,372 |
|
Investing activities: |
|
|
|
Capital expenditures |
|
(25,726 |
) |
|
|
(24,883 |
) |
Proceeds from disposition of capital assets |
|
502 |
|
|
|
1,324 |
|
Cash used
for investing activities |
|
(25,224 |
) |
|
|
(23,559 |
) |
Financing activities: |
|
|
|
Borrowings under credit facilities |
|
114,500 |
|
|
|
83,500 |
|
Repayments of credit facility borrowings |
|
(154,000 |
) |
|
|
(136,000 |
) |
Repayments of other long-term debt |
|
(1,027 |
) |
|
|
(1,526 |
) |
Common stock dividends paid |
|
(10,534 |
) |
|
|
(10,644 |
) |
Issuance of common stock |
|
3,626 |
|
|
|
3,287 |
|
Payroll tax paid to settle shares forfeited upon vesting of
stock |
|
(454 |
) |
|
|
(330 |
) |
Purchase of treasury stock |
|
(7,233 |
) |
|
|
(9,551 |
) |
Cash used
for financing activities |
|
(55,122 |
) |
|
|
(71,264 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
303 |
|
|
|
316 |
|
Increase in
cash and cash equivalents |
|
20,753 |
|
|
|
1,865 |
|
Cash and
cash equivalents at beginning of period |
|
30,868 |
|
|
|
29,003 |
|
Cash and
cash equivalents at end of period |
$ |
51,621 |
|
|
$ |
30,868 |
|
|
|
|
|
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 October 31, |
|
Twelve Months Ended October 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Cash
provided by operating activities |
|
53,235 |
|
$66,336 |
|
$100,796 |
|
$96,372 |
Capital
expenditures |
|
(5,053) |
|
(7,899) |
|
(25,726) |
|
(24,883) |
Free Cash
Flow |
|
$48,182 |
|
$58,437 |
|
$75,070 |
|
$71,489 |
QUANEX
BUILDING PRODUCTS CORPORATION |
NON-GAAP
FINANCIAL MEASURE DISCLOSURE |
(In thousands,
except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Net Income and Adjusted
EPS |
|
Three Months EndedOctober 31, 2020 |
|
|
Three Months EndedOctober 31, 2019 |
|
|
Twelve Months EndedOctober 31, 2020 |
|
|
Twelve Months EndedOctober 31, 2019 |
|
|
|
NetIncome |
|
Diluted EPS |
|
|
NetIncome |
|
DilutedEPS |
|
|
NetIncome |
|
DilutedEPS |
|
|
Net (Loss)Income |
|
DilutedEPS |
|
Net income (loss) as reported |
|
$ |
22,152 |
|
|
$ |
0.68 |
|
|
|
$ |
(30,948 |
) |
|
$ |
(0.94 |
) |
|
|
$ |
38,496 |
|
|
$ |
1.17 |
|
|
|
$ |
(46,730 |
) |
|
$ |
(1.42 |
) |
|
Reconciling
items from below |
|
|
(168 |
) |
|
|
(0.01 |
) |
|
|
|
44,963 |
|
|
|
1.36 |
|
|
|
|
2,218 |
|
|
|
0.07 |
|
|
|
|
78,155 |
|
|
|
2.37 |
|
|
Adjusted net
income and adjusted EPS |
|
$ |
21,984 |
|
|
$ |
0.67 |
|
|
|
$ |
14,015 |
|
|
$ |
0.42 |
|
|
|
$ |
40,714 |
|
|
$ |
1.24 |
|
|
|
$ |
31,425 |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA |
|
Three Months EndedOctober 31, 2020 |
|
|
Three Months EndedOctober 31, 2019 |
|
|
Twelve Months EndedOctober 31, 2020 |
|
|
Twelve Months EndedOctober 31, 2019 |
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
|
Reconciliation |
|
|
|
Net income
(loss) as reported |
|
$ |
22,152 |
|
|
|
|
|
$ |
(30,948 |
) |
|
|
|
|
$ |
38,496 |
|
|
|
|
|
$ |
(46,730 |
) |
|
|
|
Income tax
expense |
|
|
4,906 |
|
|
|
|
|
|
4,850 |
|
|
|
|
|
|
11,804 |
|
|
|
|
|
|
10,776 |
|
|
|
|
Other,
net |
|
|
(164 |
) |
|
|
|
|
|
345 |
|
|
|
|
|
|
(280 |
) |
|
|
|
|
|
(116 |
) |
|
|
|
Interest
expense |
|
|
935 |
|
|
|
|
|
|
2,029 |
|
|
|
|
|
|
5,245 |
|
|
|
|
|
|
9,643 |
|
|
|
|
Depreciation
and amortization |
|
|
11,378 |
|
|
|
|
|
|
12,428 |
|
|
|
|
|
|
47,229 |
|
|
|
|
|
|
49,586 |
|
|
|
|
EBITDA |
|
|
39,207 |
|
|
|
|
|
|
(11,296 |
) |
|
|
|
|
|
102,494 |
|
|
|
|
|
|
23,159 |
|
|
|
|
Reconciling
items from below |
|
|
145 |
|
|
|
|
|
|
45,727 |
|
|
|
|
|
|
2,020 |
|
|
|
|
|
|
79,504 |
|
|
|
|
Adjusted
EBITDA |
|
$ |
39,352 |
|
|
|
|
|
$ |
34,431 |
|
|
|
|
|
$ |
104,514 |
|
|
|
|
|
$ |
102,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling Items |
|
Three Months EndedOctober 31, 2020 |
|
|
Three Months EndedOctober 31, 2019 |
|
|
Twelve Months EndedOctober 31, 2020 |
|
|
Twelve Months EndedOctober 31, 2019 |
|
|
|
IncomeStatement |
|
ReconcilingItems |
|
|
IncomeStatement |
|
ReconcilingItems |
|
|
IncomeStatement |
|
ReconcilingItems |
|
|
IncomeStatement |
|
ReconcilingItems |
|
Net
sales |
|
$ |
255,405 |
|
|
$ |
- |
|
|
|
$ |
240,369 |
|
|
$ |
- |
|
|
|
$ |
851,573 |
|
|
$ |
- |
|
|
|
$ |
893,841 |
|
|
$ |
- |
|
|
Cost of
sales |
|
|
189,164 |
|
|
|
- |
|
|
|
|
183,128 |
|
|
|
- |
|
|
|
|
658,750 |
|
|
|
- |
|
|
|
|
694,420 |
|
|
|
- |
|
|
Selling,
general and administrative |
|
|
26,889 |
|
|
|
- |
|
|
|
|
23,826 |
|
|
|
(1,016 |
) |
(1) |
|
|
89,707 |
|
|
|
(1,398 |
) |
(1) |
|
|
101,292 |
|
|
|
(4,534 |
) |
(1) |
Restructuring charges |
|
|
145 |
|
|
|
(145 |
) |
(2) |
|
|
89 |
|
|
|
(89 |
) |
(2) |
|
|
622 |
|
|
|
(622 |
) |
(2) |
|
|
370 |
|
|
|
(370 |
) |
(2) |
Asset
impairment charges |
|
|
- |
|
|
|
- |
|
|
|
|
44,622 |
|
|
|
(44,622 |
) |
|
|
|
- |
|
|
|
- |
|
|
|
|
74,600 |
|
|
|
(74,600 |
) |
(3) |
EBITDA |
|
|
39,207 |
|
|
|
145 |
|
|
|
|
(11,296 |
) |
|
|
45,727 |
|
|
|
|
102,494 |
|
|
|
2,020 |
|
|
|
|
23,159 |
|
|
|
79,504 |
|
|
Depreciation
and amortization |
|
|
11,378 |
|
|
|
- |
|
|
|
|
12,428 |
|
|
|
(192 |
) |
|
|
|
47,229 |
|
|
|
(968 |
) |
(4) |
|
|
49,586 |
|
|
|
(192 |
) |
|
Operating
income (loss) |
|
|
27,829 |
|
|
|
145 |
|
|
|
|
(23,724 |
) |
|
|
45,919 |
|
|
|
|
55,265 |
|
|
|
2,988 |
|
|
|
|
(26,427 |
) |
|
|
79,696 |
|
|
Interest
expense |
|
|
(935 |
) |
|
|
- |
|
|
|
|
(2,029 |
) |
|
|
- |
|
|
|
|
(5,245 |
) |
|
|
- |
|
|
|
|
(9,643 |
) |
|
|
- |
|
|
Other,
net |
|
|
164 |
|
|
|
(333 |
) |
(5) |
|
|
(345 |
) |
|
|
451 |
|
(5) |
|
|
280 |
|
|
|
57 |
|
(5) |
|
|
116 |
|
|
|
384 |
|
(5) |
Income
(loss) before income taxes |
|
|
27,058 |
|
|
|
(188 |
) |
|
|
|
(26,098 |
) |
|
|
46,370 |
|
|
|
|
50,300 |
|
|
|
3,045 |
|
|
|
|
(35,954 |
) |
|
|
80,080 |
|
|
Income tax
expense |
|
|
(4,906 |
) |
|
|
20 |
|
(6) |
|
|
(4,850 |
) |
|
|
(1,407 |
) |
(6) |
|
|
(11,804 |
) |
|
|
(827 |
) |
(6) |
|
|
(10,776 |
) |
|
|
(1,925 |
) |
(6) |
Net income
(loss) |
|
$ |
22,152 |
|
|
$ |
(168 |
) |
|
|
$ |
(30,948 |
) |
|
$ |
44,963 |
|
|
|
$ |
38,496 |
|
|
$ |
2,218 |
|
|
|
$ |
(46,730 |
) |
|
$ |
78,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share |
|
$ |
0.68 |
|
|
|
|
|
$ |
(0.94 |
) |
|
|
|
|
$ |
1.17 |
|
|
|
|
|
$ |
(1.42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Transaction and
advisory fees, $1.4 million related to executive severance charges
in the twelve months ended 2020, $0.8 million related to the loss
on the sale of a plant in the three and twelve months ended 2019,
and $2.3 million of severance charges related to a reorganization
and executive severance in the twelve months ended
2019. |
(2) Restructuring
charges relate to the closure of manufacturing plant
facilities. |
(3) Asset
impairment charges relate to goodwill impairment in the North
American Cabinet Components segment. |
(4) Accelerated
depreciation related to the closure of a North American Cabinet
Components plant. |
(5) Foreign
currency transaction losses (gains). |
(6) Impact on a
with and without basis. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX
BUILDING PRODUCTS CORPORATION |
SELECTED
SEGMENT DATA |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
This table provides
gross margin, 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 Fenestration |
|
EU Fenestration |
|
NA CabinetComponents |
|
UnallocatedCorp & Other |
|
Total |
Three months ended October 31, 2020 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
141,983 |
|
|
$ |
56,823 |
|
|
$ |
57,465 |
|
|
$ |
(866 |
) |
|
$ |
255,405 |
|
Cost of sales |
|
|
105,323 |
|
|
|
36,725 |
|
|
|
47,546 |
|
|
|
(430 |
) |
|
|
189,164 |
|
Gross Margin |
|
|
36,660 |
|
|
|
20,098 |
|
|
|
9,919 |
|
|
|
(436 |
) |
|
|
66,241 |
|
Gross Margin % |
|
|
25.8 |
% |
|
|
35.4 |
% |
|
|
17.3 |
% |
|
|
|
|
25.9 |
% |
Selling, general and administrative |
|
|
12,883 |
|
|
|
6,739 |
|
|
|
5,270 |
|
|
|
1,997 |
|
|
|
26,889 |
|
Restructuring charges |
|
|
67 |
|
|
|
- |
|
|
|
78 |
|
|
|
- |
|
|
|
145 |
|
Depreciation and amortization |
|
|
5,243 |
|
|
|
2,423 |
|
|
|
3,593 |
|
|
|
119 |
|
|
|
11,378 |
|
Operating income (loss) |
|
|
18,467 |
|
|
|
10,936 |
|
|
|
978 |
|
|
|
(2,552 |
) |
|
|
27,829 |
|
Depreciation and amortization |
|
|
5,243 |
|
|
|
2,423 |
|
|
|
3,593 |
|
|
|
119 |
|
|
|
11,378 |
|
EBITDA |
|
|
23,710 |
|
|
|
13,359 |
|
|
|
4,571 |
|
|
|
(2,433 |
) |
|
|
39,207 |
|
Restructuring charges |
|
|
67 |
|
|
|
- |
|
|
|
78 |
|
|
|
- |
|
|
|
145 |
|
Adjusted EBITDA |
|
$ |
23,777 |
|
|
$ |
13,359 |
|
|
$ |
4,649 |
|
|
$ |
(2,433 |
) |
|
$ |
39,352 |
|
Adjusted EBITDA Margin % |
|
|
16.7 |
% |
|
|
23.5 |
% |
|
|
8.1 |
% |
|
|
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 31, 2019 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
143,183 |
|
|
$ |
43,794 |
|
|
$ |
54,266 |
|
|
$ |
(874 |
) |
|
$ |
240,369 |
|
Cost of sales |
|
|
107,316 |
|
|
|
29,997 |
|
|
|
46,319 |
|
|
|
(504 |
) |
|
|
183,128 |
|
Gross Margin |
|
|
35,867 |
|
|
|
13,797 |
|
|
|
7,947 |
|
|
|
(370 |
) |
|
|
57,241 |
|
Gross Margin % |
|
|
25.0 |
% |
|
|
31.5 |
% |
|
|
14.6 |
% |
|
|
|
|
23.8 |
% |
Selling, general and administrative |
|
|
13,215 |
|
|
|
5,532 |
|
|
|
4,925 |
|
|
|
154 |
|
|
|
23,826 |
|
Restructuring charges |
|
|
89 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
89 |
|
Depreciation and amortization |
|
|
6,846 |
|
|
|
2,176 |
|
|
|
3,276 |
|
|
|
130 |
|
|
|
12,428 |
|
Asset impairment charges |
|
|
- |
|
|
|
- |
|
|
|
44,622 |
|
|
|
- |
|
|
|
44,622 |
|
Operating income (loss) |
|
|
15,717 |
|
|
|
6,089 |
|
|
|
(44,876 |
) |
|
|
(654 |
) |
|
|
(23,724 |
) |
Depreciation and amortization |
|
|
6,846 |
|
|
|
2,176 |
|
|
|
3,276 |
|
|
|
130 |
|
|
|
12,428 |
|
EBITDA |
|
|
22,563 |
|
|
|
8,265 |
|
|
|
(41,600 |
) |
|
|
(524 |
) |
|
|
(11,296 |
) |
Asset impairment charges |
|
|
- |
|
|
|
- |
|
|
|
44,622 |
|
|
|
- |
|
|
|
44,622 |
|
LIFO inventory reserve adjustment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
250 |
|
|
|
250 |
|
Transaction and advisory fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
766 |
|
|
|
766 |
|
Restructuring charges |
|
|
89 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
89 |
|
Adjusted EBITDA |
|
$ |
22,652 |
|
|
$ |
8,265 |
|
|
$ |
3,022 |
|
|
$ |
492 |
|
|
$ |
34,431 |
|
Adjusted EBITDA Margin % |
|
|
15.8 |
% |
|
|
18.9 |
% |
|
|
5.6 |
% |
|
|
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended October 31, 2020 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
483,415 |
|
|
$ |
161,054 |
|
|
$ |
210,099 |
|
|
$ |
(2,995 |
) |
|
$ |
851,573 |
|
Cost of sales |
|
|
371,811 |
|
|
|
108,781 |
|
|
|
179,804 |
|
|
|
(1,646 |
) |
|
|
658,750 |
|
Gross Margin |
|
|
111,604 |
|
|
|
52,273 |
|
|
|
30,295 |
|
|
|
(1,349 |
) |
|
|
192,823 |
|
Gross Margin % |
|
|
23.1 |
% |
|
|
32.5 |
% |
|
|
14.4 |
% |
|
|
|
|
22.6 |
% |
Selling, general and administrative |
|
|
47,845 |
|
|
|
22,729 |
|
|
|
18,738 |
|
|
|
395 |
|
|
|
89,707 |
|
Restructuring charges |
|
|
295 |
|
|
|
- |
|
|
|
327 |
|
|
|
- |
|
|
|
622 |
|
Depreciation and amortization |
|
|
23,555 |
|
|
|
9,468 |
|
|
|
13,732 |
|
|
|
474 |
|
|
|
47,229 |
|
Operating income (loss) |
|
|
39,909 |
|
|
|
20,076 |
|
|
|
(2,502 |
) |
|
|
(2,218 |
) |
|
|
55,265 |
|
Depreciation and amortization |
|
|
23,555 |
|
|
|
9,468 |
|
|
|
13,732 |
|
|
|
474 |
|
|
|
47,229 |
|
EBITDA |
|
|
63,464 |
|
|
|
29,544 |
|
|
|
11,230 |
|
|
|
(1,744 |
) |
|
|
102,494 |
|
Transaction and advisory fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
55 |
|
|
|
55 |
|
Executive severance charges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,343 |
|
|
|
1,343 |
|
Restructuring charges |
|
|
295 |
|
|
|
- |
|
|
|
327 |
|
|
|
- |
|
|
|
622 |
|
Adjusted EBITDA |
|
$ |
63,759 |
|
|
$ |
29,544 |
|
|
$ |
11,557 |
|
|
$ |
(346 |
) |
|
$ |
104,514 |
|
Adjusted EBITDA Margin % |
|
|
13.2 |
% |
|
|
18.3 |
% |
|
|
5.5 |
% |
|
|
|
|
12.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended October 31, 2019 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
503,837 |
|
|
$ |
164,997 |
|
|
$ |
229,644 |
|
|
$ |
(4,637 |
) |
|
$ |
893,841 |
|
Cost of sales |
|
|
386,194 |
|
|
|
114,136 |
|
|
|
197,263 |
|
|
|
(3,173 |
) |
|
|
694,420 |
|
Gross Margin |
|
|
117,643 |
|
|
|
50,861 |
|
|
|
32,381 |
|
|
|
(1,464 |
) |
|
|
199,421 |
|
Gross Margin % |
|
|
23.3 |
% |
|
|
30.8 |
% |
|
|
14.1 |
% |
|
|
|
|
22.3 |
% |
Selling, general and administrative |
|
|
50,454 |
|
|
|
22,976 |
|
|
|
18,839 |
|
|
|
9,023 |
|
|
|
101,292 |
|
Restructuring charges |
|
|
370 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
370 |
|
Depreciation and amortization |
|
|
27,054 |
|
|
|
8,845 |
|
|
|
13,178 |
|
|
|
509 |
|
|
|
49,586 |
|
Asset impairment charges |
|
|
- |
|
|
|
- |
|
|
|
74,600 |
|
|
|
- |
|
|
|
74,600 |
|
Operating income (loss) |
|
|
39,765 |
|
|
|
19,040 |
|
|
|
(74,236 |
) |
|
|
(10,996 |
) |
|
|
(26,427 |
) |
Depreciation and amortization |
|
|
27,054 |
|
|
|
8,845 |
|
|
|
13,178 |
|
|
|
509 |
|
|
|
49,586 |
|
EBITDA |
|
|
66,819 |
|
|
|
27,885 |
|
|
|
(61,058 |
) |
|
|
(10,487 |
) |
|
|
23,159 |
|
Asset impairment charges |
|
|
- |
|
|
|
- |
|
|
|
74,600 |
|
|
|
- |
|
|
|
74,600 |
|
Transaction and advisory fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,467 |
|
|
|
1,467 |
|
Reorganization and executive severance |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,301 |
|
|
|
2,301 |
|
Loss on sale of plant |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
766 |
|
|
|
766 |
|
Restructuring charges |
|
|
370 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
370 |
|
Adjusted EBITDA |
|
$ |
67,189 |
|
|
$ |
27,885 |
|
|
$ |
13,542 |
|
|
$ |
(5,953 |
) |
|
$ |
102,663 |
|
Adjusted EBITDA Margin % |
|
|
13.3 |
% |
|
|
16.9 |
% |
|
|
5.9 |
% |
|
|
|
|
11.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
QUANEX
BUILDING PRODUCTS CORPORATION |
SALES
ANALYSIS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
October 31, 2020 |
|
October 31, 2019 |
October 31, 2020 |
|
October 31, 2019 |
|
|
|
|
|
|
|
|
NA Fenestration: |
|
|
|
|
|
|
|
United States - fenestration |
$ |
125,522 |
|
|
$ |
127,027 |
|
|
$ |
427,616 |
|
|
$ |
439,536 |
|
International - fenestration |
|
9,301 |
|
|
|
7,631 |
|
|
|
28,585 |
|
|
|
31,106 |
|
United States - non-fenestration |
|
5,500 |
|
|
|
4,771 |
|
|
|
19,279 |
|
|
|
17,061 |
|
International - non-fenestration |
|
1,660 |
|
|
|
3,754 |
|
|
|
7,935 |
|
|
|
16,134 |
|
|
$ |
141,983 |
|
|
$ |
143,183 |
|
|
$ |
483,415 |
|
|
$ |
503,837 |
|
EU Fenestration
(1): |
|
|
|
|
|
|
|
International - fenestration |
$ |
46,699 |
|
|
|
37,599 |
|
|
$ |
134,432 |
|
|
|
139,638 |
|
International - non-fenestration |
|
10,124 |
|
|
|
6,195 |
|
|
|
26,622 |
|
|
|
25,359 |
|
|
$ |
56,823 |
|
|
$ |
43,794 |
|
|
$ |
161,054 |
|
|
$ |
164,997 |
|
NA Cabinet Components: |
|
|
|
|
|
|
|
United States - fenestration |
$ |
3,381 |
|
|
$ |
3,235 |
|
|
$ |
11,842 |
|
|
$ |
13,144 |
|
United States - non-fenestration |
|
53,641 |
|
|
|
50,516 |
|
|
|
196,479 |
|
|
|
214,211 |
|
International - non-fenestration |
|
443 |
|
|
|
515 |
|
|
|
1,778 |
|
|
|
2,289 |
|
|
$ |
57,465 |
|
|
$ |
54,266 |
|
|
$ |
210,099 |
|
|
$ |
229,644 |
|
Unallocated Corporate & Other: |
|
|
|
|
|
|
|
Eliminations |
$ |
(866 |
) |
|
$ |
(874 |
) |
|
$ |
(2,995 |
) |
|
$ |
(4,637 |
) |
|
$ |
(866 |
) |
|
$ |
(874 |
) |
|
$ |
(2,995 |
) |
|
$ |
(4,637 |
) |
|
|
|
|
|
|
|
|
Net Sales |
$ |
255,405 |
|
|
$ |
240,369 |
|
|
$ |
851,573 |
|
|
$ |
893,841 |
|
|
|
|
|
|
|
|
|
(1) Reflects $2.2
million and $0.6 million gains in revenue associated with foreign
currency exchange rate impacts for the three and twelve months
ended October 31, 2020, respectively. |
|
|
|
|
|
|
|
|
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