Additional Proxy Soliciting Materials (definitive) (defa14a)
February 10 2021 - 4:17PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
¨ Preliminary
Proxy Statement
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨ Definitive
Proxy Statement
x Definitive
Additional Materials
¨
Soliciting Material under §240.14a-12
Quanex Building Products Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement,
if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No
fee required.
¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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¨ Fee paid previously with preliminary materials:
¨ Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Quanex Building
Products Corporation
AMENDMENT TO
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
February 25, 2021
The date of
this Amendment is February 10, 2021
EXPLANATORY
NOTE
The following
information supplements and amends the Definitive Proxy Statement on Schedule 14A filed by Quanex Building Products Corporation
(the “Company”) with the U.S. Securities and Exchange Commission on January 27, 2021 (the “Original Filing”)
in connection with the Company’s Annual Meeting of Stockholders to be held on February 25, 2021 (the “Annual Meeting”),
and should be read together with the Original Filing. Other than as set forth below, no changes have been made to the Original
Filing.
The purpose of
this filing is to supplement Annex A of the Original Filing, which sets forth explanatory and reconciling disclosure for certain
non-GAAP financial measures. The Company previously provided a reconciliation of Adjusted EBITDA to net income. In connection with
disclosures made on pages 17-18 of the Original Filing, the Company has added reconciliations of (1) free cash flow (defined as
cash provided by operating activities minus capital expenditures) to cash provided by operating activities and (2) as a component
of the Company’s leverage ratio of net debt to Adjusted EBITDA, net debt (defined as total debt principal of the Company
plus finance lease obligations minus cash) to total debt. Investors are encouraged to review Annex A, as supplemented, in connection
with the Company’s disclosures contained within the Compensation Discussion and Analysis section of the Original Filing,
including the presentation of applicable compensation metrics and targets.
Additional
Information and Where to Find It
This material
may be deemed to be solicitation material in respect of the solicitation of proxies from stockholders in connection with the Annual
Meeting. On January 27, 2021, the Company filed the Original Filing and definitive form of proxy card with the SEC in connection
with its solicitation of proxies from the Company’s stockholders relating to the Annual Meeting. STOCKHOLDERS ARE STRONGLY
ENCOURAGED TO READ CAREFULLY THE PROXY MATERIALS, INCLUDING THE PROXY STATEMENT, THIS AMENDMENT AND THE 2020 ANNUAL REPORT, AS
THEY CONTAIN IMPORTANT INFORMATION TO CONSIDER WHEN DECIDING HOW TO VOTE ON THE MATTERS BROUGHT BEFORE THE 2021 ANNUAL MEETING.
This amendment
is also available electronically, together with our other proxy materials, on the Company’s website at https://investors.quanex.com/.
In addition, stockholders can access at no charge documents filed by the Company with the SEC, including the proxy statement and
this amendment, at the SEC’s website at www.sec.gov.
ANNEX A, AS SUPPLEMENTED
QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
AND RECONCILIATION
(In millions)
(Unaudited)
Reconciliation of EBITDA to Net Income (Loss) as reported
Adjusted EBITDA (defined
as net income or loss from continuing operations before interest, taxes, depreciation and amortization, asset impairment charges,
transaction and advisory fees, gains/losses on the sale of plants, restructuring charges, and other, net) is a non-GAAP financial
measure that Quanex's management uses to measure its operational performance and assist with financial decision making. The Company
believes the non-GAAP measure adjusted EBITDA provides a consistent basis for comparison between periods, and will assist investors
in understanding our financial performance when comparing our results to other investment opportunities. As used in this Proxy
Statement, the Company also believes that adjusted EBITDA will assist investors in understanding the effect of certain strategic
decisions on the Company's decisions related to its executive pay and compensation structure. The measures of adjusted EBITDA as
presented by the Company may not be the same as that 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.
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FY 2018
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FY 2019
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FY 2020
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Adjusted EBITDA
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$
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89.9
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$
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102.7
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$
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104.5
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Selling, General, and Administrative Adjustments(1)
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0.9
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4.5
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1.4
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Restructuring Charges
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1.5
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0.4
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0.6
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Asset Impairment Charges
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—
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74.6
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—
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Depreciation & Amortization
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51.8
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49.6
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47.2
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Interest
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11.1
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9.6
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5.2
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Other, net
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(1.2
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)
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(0.1
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(0.2
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Tax
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(0.8
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)
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10.8
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11.8
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Net income
(loss)
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$
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26.6
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$
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(46.7
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)
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$
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38.5
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(1) Includes adjustments for
transaction and advisory fees, executive severance charges in 2020 and 2019, and in 2019, the loss on the sale of a plant and reorganization
charges.
Reconciliation of Free Cash Flow to Cash Provided by Operating
Activities
Free Cash Flow (defined
as cash provided by operations less capital expenditures) is a non-GAAP financial measure that Quanex's management uses to measure
its operational and cash management performance, and to assist with financial decision making. Free Cash Flow is measured before
application of certain contractual commitments (including finance lease obligations), and accordingly is not a true measure of
Quanex’s residual cash flow available for discretionary expenditures. The Company believes this non-GAAP measure will assist
investors in understanding our financial and cash management performance. The measure of Free Cash Flow as presented by the Company
may not be the same as that 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.
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FY 2018
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FY 2019
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FY 2020
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Free Cash Flow
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$
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78.1
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$
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71.5
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$
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75.1
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Capital Expenditures
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26.5
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24.9
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25.7
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Cash Provided by Operating Activities
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$
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104.6
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$
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96.4
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$
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100.8
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Reconciliation of Net Debt
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. Net Debt is defined as total debt principal of the Company plus finance lease
obligations minus cash.
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FY 2018
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FY 2019
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FY 2020
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Revolving Credit Facility
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$
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195.0
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$
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142.5
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$
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103.0
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Finance Lease Obligations
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17.0
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15.9
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15.3
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Less: Cash and cash equivalents
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29.0
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30.9
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51.6
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Net Debt
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$
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183.0
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$
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127.5
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$
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66.7
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