Quanex Building Products Corporation (NYSE:NX)
(“Quanex” or the “Company”) today announced its results for the
three months ended July 31, 2021.
The Company reported the following selected
financial results:
QUANEX
BUILDING PRODUCTS CORPORATION |
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Q3 2021 Earnings Release |
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Three Months Ended July 31, |
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Nine Months Ended July 31, |
($ in millions, except per share data) |
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2021 |
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2020 |
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2021 |
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2020 |
Net Sales |
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$279.9 |
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$212.1 |
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$780.4 |
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$596.2 |
Gross Margin |
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$60.0 |
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$49.7 |
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$175.7 |
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$126.6 |
Gross Margin % |
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21.4% |
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23.4% |
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22.5% |
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21.2% |
Net Income |
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$13.6 |
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$10.8 |
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$36.0 |
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$16.3 |
Diluted EPS |
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$0.41 |
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$0.33 |
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$1.08 |
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$0.50 |
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Adjusted Net Income |
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$14.2 |
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$11.1 |
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$37.8 |
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$18.7 |
Adjusted Diluted EPS |
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$0.42 |
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$0.34 |
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$1.13 |
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$0.57 |
Adjusted EBITDA |
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$32.9 |
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$27.7 |
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$89.5 |
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$65.2 |
Adjusted EBITDA Margin % |
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11.8% |
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13.1% |
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11.5% |
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10.9% |
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Cash Provided by Operating
Activities |
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$18.5 |
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$45.1 |
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$47.4 |
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$47.6 |
Free Cash Flow |
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$12.3 |
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$40.7 |
|
$31.4 |
|
$26.9 |
(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, stated, “Demand for our products remained robust across
all of our product lines throughout the third quarter of
2021. On a consolidated basis, net sales increased by
approximately 32% year-over-year as compared to the third quarter
of 2020. General inflation, time lag for index pricing, supply
chain challenges and labor constraints all continue to have a
negative impact on margins. In addition, our plant in
Germany was down for approximately 14 days during the quarter due
to flooding in Europe, but the plant was back up and running at
full capacity by the end of July. Our balance sheet continues to
strengthen, and we were able to repay $15.0 million in bank debt
during the quarter while also repurchasing approximately $1.8
million of our common stock. We will remain focused on generating
cash and paying down debt in the near-term.” (See
Non-GAAP Terminology Definitions and Disclaimers section for
additional information)
Third Quarter 2021 Results
Summary
The Company reported net sales of $279.9 million
during the three months ended July 31, 2021, which represents
growth of 32.0% compared to $212.1 million for the same period of
2020. The increase was largely due to increased demand across all
product lines and operating segments combined with increased
pricing mostly related to the pass through of raw material cost
inflation. In detail, Quanex posted net sales growth of 20.8% in
its North American Fenestration segment, 19.3% in its North
American Cabinet Components segment and 85.8% in its European
Fenestration segment, excluding the foreign exchange impact and
despite the challenges presented by flooding in Germany as
previously noted. As a reminder, both of Quanex’s manufacturing
facilities in the U.K. were shut down in late March of 2020 and did
not resume operations until mid-to-late May 2020. (See Sales
Analysis table for additional information)
The increase in earnings for the third quarter
of 2021 was mainly due to higher volumes and improved operating
leverage. This increase was somewhat offset by inflationary
pressures and an increase in selling, general and administrative
expenses, which was mostly attributable to more normalized medical
costs combined with an increase in stock-based compensation
expense.
Balance Sheet & Liquidity
Update
As of July 31, 2021, Quanex had total debt of
$74.0 million and its leverage ratio of Net Debt to LTM Adjusted
EBITDA improved to 0.2x. (See Non-GAAP Terminology
Definitions and Disclaimers section and Net Debt and LTM Adjusted
EBITDA reconciliation tables for additional information)
The Company’s liquidity increased to $306.2
million as of July 31, 2021, consisting of $43.7 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 74,257 shares of common stock for approximately $1.8
million at an average price of $23.88 per share during the three
months ended July 31, 2021. As of July 31, 2021, approximately $5.4
million remained under the existing share repurchase
authorization.
Outlook
George Wilson, President and Chief Executive
Officer, commented, “While we remain optimistic on the demand
outlook for our products, we do expect inflation, labor costs, and
supply chain challenges to continue pressuring margins throughout
the fourth quarter of this year. We continue to pass these
incremental costs along to our customers through indexes,
surcharges, and price increases; however, there are time lags in
each case. With this backdrop, on a consolidated basis,
we are reaffirming net sales guidance of approximately $1.04
billion to $1.06 billion and Adjusted EBITDA* of $125 million to
$130 million in fiscal 2021.”
*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, September 3, 2021, 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 6642169, and ask for the Quanex call
a few minutes prior to the start time. A link to the live audio
webcast will also be available on the Company’s website at
http://www.quanex.com in the Investors section under Presentations
& Events. A telephonic replay of the call will be available
approximately two hours after the live broadcast ends and will be
accessible through September 10, 2021. To access the replay dial
(855) 859-2056 for domestic callers and (404) 537-3406 for
international callers, in both cases referencing conference
passcode 6642169.
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 (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. Net
Debt is defined as total debt (outstanding balance on the revolving
credit facility plus financial lease obligations) less 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. 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, 2020, 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
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share data)(Unaudited)
|
|
Three Months Ended July 31, |
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Nine Months Ended July 31, |
|
|
|
2021 |
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|
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2020 |
|
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2021 |
|
|
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2020 |
|
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|
|
|
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Net sales |
|
$ |
279,877 |
|
|
$ |
212,096 |
|
|
$ |
780,381 |
|
|
$ |
596,168 |
|
Cost of sales |
|
|
219,866 |
|
|
|
162,427 |
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|
604,723 |
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|
|
469,586 |
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Selling, general and
administrative |
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27,766 |
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21,973 |
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88,299 |
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62,818 |
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Restructuring charges |
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- |
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73 |
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39 |
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|
477 |
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Depreciation and
amortization |
|
|
10,683 |
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|
|
11,060 |
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|
32,543 |
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|
35,851 |
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Operating income |
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|
21,562 |
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|
|
16,563 |
|
|
|
54,777 |
|
|
|
27,436 |
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Interest expense |
|
|
(597 |
) |
|
|
(1,165 |
) |
|
|
(1,988 |
) |
|
|
(4,310 |
) |
Other, net |
|
|
188 |
|
|
|
(220 |
) |
|
|
645 |
|
|
|
116 |
|
Income before income
taxes |
|
|
21,153 |
|
|
|
15,178 |
|
|
|
53,434 |
|
|
|
23,242 |
|
Income tax expense |
|
|
(7,474 |
) |
|
|
(4,345 |
) |
|
|
(17,352 |
) |
|
|
(6,898 |
) |
Net income |
|
$ |
13,679 |
|
|
$ |
10,833 |
|
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$ |
36,082 |
|
|
$ |
16,344 |
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|
|
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Earnings per common share,
basic |
|
$ |
0.41 |
|
|
$ |
0.33 |
|
|
$ |
1.09 |
|
|
$ |
0.50 |
|
Earnings per common share,
diluted |
|
$ |
0.41 |
|
|
$ |
0.33 |
|
|
$ |
1.08 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
33,359 |
|
|
|
32,610 |
|
|
|
33,194 |
|
|
|
32,716 |
|
Diluted |
|
|
33,650 |
|
|
|
32,739 |
|
|
|
33,518 |
|
|
|
32,845 |
|
|
|
|
|
|
|
|
|
|
Cash dividends per share |
|
$ |
0.08 |
|
|
$ |
0.08 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands)(Unaudited)
|
|
July 31, 2021 |
|
October 31, 2020 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
43,663 |
|
|
$ |
51,621 |
|
Accounts receivable, net |
|
|
98,286 |
|
|
|
88,287 |
|
Inventories, net |
|
|
93,493 |
|
|
|
61,181 |
|
Prepaid and other current assets |
|
|
9,133 |
|
|
|
6,217 |
|
Total current assets |
|
|
244,575 |
|
|
|
207,306 |
|
Property, plant and equipment,
net |
|
|
176,032 |
|
|
|
184,104 |
|
Operating lease right-of-use
assets |
|
|
54,811 |
|
|
|
51,824 |
|
Goodwill |
|
|
150,487 |
|
|
|
146,154 |
|
Intangible assets, net |
|
|
86,026 |
|
|
|
93,068 |
|
Other assets |
|
|
7,261 |
|
|
|
9,129 |
|
Total assets |
|
$ |
719,192 |
|
|
$ |
691,585 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
79,167 |
|
|
$ |
77,335 |
|
Accrued liabilities |
|
|
52,751 |
|
|
|
38,289 |
|
Income taxes payable |
|
|
1,327 |
|
|
|
6,465 |
|
Current maturities of long-term debt |
|
|
839 |
|
|
|
692 |
|
Current operating lease liabilities |
|
|
8,270 |
|
|
|
7,459 |
|
Total current liabilities |
|
|
142,354 |
|
|
|
130,240 |
|
Long-term debt |
|
|
72,439 |
|
|
|
116,728 |
|
Noncurrent operating lease
liabilities |
|
|
47,371 |
|
|
|
44,873 |
|
Deferred pension and
postretirement benefits |
|
|
10,765 |
|
|
|
10,923 |
|
Deferred income taxes |
|
|
25,252 |
|
|
|
19,116 |
|
Other liabilities |
|
|
15,622 |
|
|
|
13,946 |
|
Total liabilities |
|
|
313,803 |
|
|
|
335,826 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
373 |
|
|
|
373 |
|
Additional paid-in-capital |
|
|
253,662 |
|
|
|
253,458 |
|
Retained earnings |
|
|
241,582 |
|
|
|
213,517 |
|
Accumulated other comprehensive loss |
|
|
(22,968 |
) |
|
|
(33,024 |
) |
Treasury stock at cost |
|
|
(67,260 |
) |
|
|
(78,565 |
) |
Total stockholders’ equity |
|
|
405,389 |
|
|
|
355,759 |
|
Total liabilities and stockholders' equity |
|
$ |
719,192 |
|
|
$ |
691,585 |
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW(In thousands)(Unaudited)
|
Nine Months Ended July 31, |
|
|
2021 |
|
|
|
2020 |
|
Operating
activities: |
|
|
|
Net income |
$ |
36,082 |
|
|
$ |
16,344 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
32,543 |
|
|
|
35,851 |
|
Stock-based compensation |
|
1,470 |
|
|
|
513 |
|
Deferred income tax |
|
5,429 |
|
|
|
438 |
|
Other, net |
|
5,485 |
|
|
|
762 |
|
Changes in assets and liabilities: |
|
|
|
Increase in accounts receivable |
|
(8,277 |
) |
|
|
(1,852 |
) |
(Increase) decrease in inventory |
|
(32,113 |
) |
|
|
3,553 |
|
(Increase) decrease in other current assets |
|
(2,768 |
) |
|
|
1,218 |
|
Increase (decrease) in accounts payable |
|
1,600 |
|
|
|
(1,878 |
) |
Increase (decrease) in accrued liabilities |
|
12,521 |
|
|
|
(7,611 |
) |
(Decrease) increase in income taxes payable |
|
(5,158 |
) |
|
|
107 |
|
(Decrease) increase in deferred pension and postretirement
benefits |
|
(158 |
) |
|
|
573 |
|
Increase (decrease) in other long-term liabilities |
|
962 |
|
|
|
(181 |
) |
Other, net |
|
(183 |
) |
|
|
(276 |
) |
Cash provided by operating
activities |
|
47,435 |
|
|
|
47,561 |
|
Investing
activities: |
|
|
|
Capital expenditures |
|
(16,006 |
) |
|
|
(20,673 |
) |
Proceeds from disposition of capital assets |
|
3,138 |
|
|
|
131 |
|
Cash used for investing
activities |
|
(12,868 |
) |
|
|
(20,542 |
) |
Financing
activities: |
|
|
|
Borrowings under credit facilities |
|
- |
|
|
|
114,500 |
|
Repayments of credit facility borrowings |
|
(45,000 |
) |
|
|
(119,000 |
) |
Repayments of other long-term debt |
|
(502 |
) |
|
|
(791 |
) |
Common stock dividends paid |
|
(8,017 |
) |
|
|
(7,910 |
) |
Issuance of common stock |
|
16,272 |
|
|
|
2,954 |
|
Payroll tax paid to settle shares forfeited upon vesting of
stock |
|
(492 |
) |
|
|
(454 |
) |
Purchase of treasury stock |
|
(5,741 |
) |
|
|
(6,693 |
) |
Cash used for financing
activities |
|
(43,480 |
) |
|
|
(17,394 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
955 |
|
|
|
580 |
|
(Decrease) increase in cash
and cash equivalents |
|
(7,958 |
) |
|
|
10,205 |
|
Cash and cash equivalents at
beginning of period |
|
51,621 |
|
|
|
30,868 |
|
Cash and cash equivalents at
end of period |
$ |
43,663 |
|
|
$ |
41,073 |
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONFREE CASH FLOW AND NET DEBT
RECONCILIATIONS(In thousands)(Unaudited)
The following table
reconciles the Company's calculation of Free Cash Flow, a non-GAAP
measure, to its most directly comparable GAAP measure. The Company
defines Free Cash Flow as cash provided by operating activities
less capital expenditures. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Cash provided by operating
activities |
|
|
|
18,475 |
|
|
$45,089 |
|
|
$47,435 |
|
|
$47,561 |
|
Capital expenditures |
|
|
|
(6,207) |
|
|
|
(4,360) |
|
|
|
(16,006) |
|
|
|
(20,673) |
|
Free Cash
Flow |
|
|
$12,268 |
|
|
$40,729 |
|
|
$31,429 |
|
|
$26,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
reconciles the Company's Net Debt which is defined as total debt
principal of the Company plus finance lease obligations minus
cash. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31, |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
Revolving Credit Facility |
|
|
$58,000 |
|
|
$138,000 |
|
|
|
|
|
Finance Lease Obligations |
|
|
|
15,951 |
|
|
|
15,729 |
|
|
|
|
|
Total Debt (1) |
|
|
|
73,951 |
|
|
|
153,729 |
|
|
|
|
|
Less: Cash and cash
equivalents |
|
|
|
43,663 |
|
|
|
41,073 |
|
|
|
|
|
Net Debt |
|
|
$30,288 |
|
|
$112,656 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes outstanding
letters of credit. |
|
|
|
|
|
|
|
|
|
QUANEX BUILDING PRODUCTS
CORPORATIONNON-GAAP FINANCIAL MEASURE
DISCLOSURE(In thousands, except per share
data)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
Reconciliation of
Adjusted Net Income and Adjusted EPS |
|
July 31, 2021 |
|
July 31, 2020 |
|
July 31, 2021 |
|
July 31, 2020 |
|
|
|
NetIncome |
|
DilutedEPS |
|
NetIncome |
|
DilutedEPS |
|
NetIncome |
|
DilutedEPS |
|
NetLoss |
|
DilutedEPS |
|
Net income as reported |
|
$ |
13,679 |
|
|
$ |
0.41 |
|
|
$ |
10,833 |
|
|
$ |
0.33 |
|
|
$ |
36,082 |
|
|
$ |
1.08 |
|
|
$ |
16,344 |
|
|
$ |
0.50 |
|
|
Net Income reconciling items
from below |
|
|
512 |
|
|
|
0.01 |
|
|
|
280 |
|
|
|
0.01 |
|
|
|
1,686 |
|
|
|
0.05 |
|
|
|
2,387 |
|
|
|
0.07 |
|
|
Adjusted net income and
adjusted EPS |
|
$ |
14,191 |
|
|
$ |
0.42 |
|
|
$ |
11,113 |
|
|
$ |
0.34 |
|
|
$ |
37,768 |
|
|
$ |
1.13 |
|
|
$ |
18,731 |
|
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA |
|
Three Months EndedJuly 31,
2021 |
|
Three Months EndedJuly 31,
2020 |
|
Nine Months EndedJuly 31,
2021 |
|
Nine Months EndedJuly 31,
2020 |
|
|
|
Reconciliation |
|
|
|
Reconciliation |
|
|
|
Reconciliation |
|
|
|
Reconciliation |
|
|
|
Net income as reported |
|
$ |
13,679 |
|
|
|
|
$ |
10,833 |
|
|
|
|
$ |
36,082 |
|
|
|
|
$ |
16,344 |
|
|
|
|
Income tax expense |
|
|
7,474 |
|
|
|
|
|
4,345 |
|
|
|
|
|
17,352 |
|
|
|
|
|
6,898 |
|
|
|
|
Other, net |
|
|
(188 |
) |
|
|
|
|
220 |
|
|
|
|
|
(645 |
) |
|
|
|
|
(116 |
) |
|
|
|
Interest expense |
|
|
597 |
|
|
|
|
|
1,165 |
|
|
|
|
|
1,988 |
|
|
|
|
|
4,310 |
|
|
|
|
Depreciation and
amortization |
|
|
10,683 |
|
|
|
|
|
11,060 |
|
|
|
|
|
32,543 |
|
|
|
|
|
35,851 |
|
|
|
|
EBITDA |
|
|
32,245 |
|
|
|
|
|
27,623 |
|
|
|
|
|
87,320 |
|
|
|
|
|
63,287 |
|
|
|
|
EBITDA reconciling items from
below |
|
|
682 |
|
|
|
|
|
73 |
|
|
|
|
|
2,160 |
|
|
|
|
|
1,875 |
|
|
|
|
Adjusted EBITDA |
|
$ |
32,927 |
|
|
|
|
$ |
27,696 |
|
|
|
|
$ |
89,480 |
|
|
|
|
$ |
65,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
Items |
|
Three Months EndedJuly 31,
2021 |
|
Three Months EndedJuly 31,
2020 |
|
Nine Months EndedJuly 31,
2021 |
|
Nine Months EndedJuly 31,
2020 |
|
|
|
IncomeStatement |
|
ReconcilingItems |
|
IncomeStatement |
|
ReconcilingItems |
|
IncomeStatement |
|
ReconcilingItems |
|
IncomeStatement |
|
ReconcilingItems |
|
Net sales |
|
$ |
279,877 |
|
|
$ |
- |
|
|
$ |
212,096 |
|
|
$ |
- |
|
|
$ |
780,381 |
|
|
$ |
- |
|
|
$ |
596,168 |
|
|
$ |
- |
|
|
Cost of sales |
|
|
219,866 |
|
|
|
(307 |
) |
(1 |
) |
|
162,427 |
|
|
|
- |
|
|
|
604,723 |
|
|
|
(307 |
) |
(1 |
) |
|
469,586 |
|
|
|
- |
|
|
Selling, general and
administrative |
|
|
27,766 |
|
|
|
(375 |
) |
(2 |
) |
|
21,973 |
|
|
|
- |
|
|
|
88,299 |
|
|
|
(1,814 |
) |
(2 |
) |
|
62,818 |
|
|
|
(1,398 |
) |
(2 |
) |
Restructuring charges |
|
|
- |
|
|
|
- |
|
|
|
73 |
|
|
|
(73 |
) |
(3 |
) |
|
39 |
|
|
|
(39 |
) |
(3 |
) |
|
477 |
|
|
|
(477 |
) |
(3 |
) |
EBITDA |
|
|
32,245 |
|
|
|
682 |
|
|
|
27,623 |
|
|
|
73 |
|
|
|
87,320 |
|
|
|
2,160 |
|
|
|
63,287 |
|
|
|
1,875 |
|
|
Depreciation and
amortization |
|
|
10,683 |
|
|
|
- |
|
|
|
11,060 |
|
|
|
- |
|
|
|
32,543 |
|
|
|
- |
|
|
|
35,851 |
|
|
|
(968 |
) |
(4 |
) |
Operating income |
|
|
21,562 |
|
|
|
682 |
|
|
|
16,563 |
|
|
|
73 |
|
|
|
54,777 |
|
|
|
2,160 |
|
|
|
27,436 |
|
|
|
2,843 |
|
|
Interest expense |
|
|
(597 |
) |
|
|
- |
|
|
|
(1,165 |
) |
|
|
- |
|
|
|
(1,988 |
) |
|
|
- |
|
|
|
(4,310 |
) |
|
|
- |
|
|
Other, net |
|
|
188 |
|
|
|
79 |
|
(5 |
) |
|
(220 |
) |
|
|
458 |
|
(5 |
) |
|
645 |
|
|
|
161 |
|
(5 |
) |
|
116 |
|
|
|
390 |
|
(5 |
) |
Income before income
taxes |
|
|
21,153 |
|
|
|
761 |
|
|
|
15,178 |
|
|
|
531 |
|
|
|
53,434 |
|
|
|
2,321 |
|
|
|
23,242 |
|
|
|
3,233 |
|
|
Income tax expense |
|
|
(7,474 |
) |
|
|
(249 |
) |
(6 |
) |
|
(4,345 |
) |
|
|
(251 |
) |
(6 |
) |
|
(17,352 |
) |
|
|
(635 |
) |
(6 |
) |
|
(6,898 |
) |
|
|
(846 |
) |
(6 |
) |
Net income |
|
$ |
13,679 |
|
|
$ |
512 |
|
|
$ |
10,833 |
|
|
$ |
280 |
|
|
$ |
36,082 |
|
|
$ |
1,686 |
|
|
$ |
16,344 |
|
|
$ |
2,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
|
$ |
0.41 |
|
|
|
|
$ |
0.33 |
|
|
|
|
$ |
1.08 |
|
|
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Loss on
damage to a plant caused by flooding of $0.3 million for the three
and nine months ended July 31, 2021. |
(2) Transaction
and advisory fees, $0.4 million related to the loss on a sale of a
plant in the three months ended July 31, 2021, $1.8 million related
to the loss on a sale of a plant in the nine months ended July 31,
2021, $1.3 million related to executive severance charges in the
nine months ended July 31, 2020, respectively. |
(3) Restructuring
charges related to the closure of manufacturing plant
facilities. |
(4) Accelerated
depreciation related to the closure of a North American Cabinet
Components
plant. |
(5) Foreign
currency transaction
losses. |
(6) Impact on a
with and without
basis. |
QUANEX BUILDING PRODUCTS
CORPORATIONNON-GAAP FINANCIAL MEASURE
DISCLOSURE(In thousands)(Unaudited)
Reconciliation of Last
Twelve Months Adjusted EBITDA |
|
Three Months EndedJuly 31,
2021 |
|
Three Months EndedApril 30,
2021 |
|
Three Months EndedJanuary 31,
2021 |
|
Three Months EndedOctober 31,
2020 |
|
Total |
|
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
|
Reconciliation |
Net income as reported |
|
$ |
13,679 |
|
|
$ |
14,551 |
|
|
$ |
7,852 |
|
|
$ |
22,152 |
|
|
$ |
58,234 |
|
Income tax expense |
|
|
7,474 |
|
|
|
6,454 |
|
|
|
3,424 |
|
|
|
4,906 |
|
|
|
22,258 |
|
Other, net |
|
|
(188 |
) |
|
|
(265 |
) |
|
|
(192 |
) |
|
|
(164 |
) |
|
|
(809 |
) |
Interest expense |
|
|
597 |
|
|
|
640 |
|
|
|
751 |
|
|
|
935 |
|
|
|
2,923 |
|
Depreciation and
amortization |
|
|
10,683 |
|
|
|
10,845 |
|
|
|
11,015 |
|
|
|
11,378 |
|
|
|
43,921 |
|
EBITDA |
|
|
32,245 |
|
|
|
32,225 |
|
|
|
22,850 |
|
|
|
39,207 |
|
|
|
126,527 |
|
Cost of sales (1) |
|
|
307 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
307 |
|
Selling, general and
administrative (2) |
|
|
375 |
|
|
|
- |
|
|
|
1,439 |
|
|
|
- |
|
|
|
1,814 |
|
Restructuring charges (3) |
|
|
- |
|
|
|
- |
|
|
|
39 |
|
|
|
145 |
|
|
|
184 |
|
Adjusted EBITDA |
|
$ |
32,927 |
|
|
$ |
32,225 |
|
|
$ |
24,328 |
|
|
$ |
39,352 |
|
|
$ |
128,832 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Loss on the
damage of a plant caused by
flooding. |
(2) Transaction
and advisory fees, loss on the sale of a plant, and executive
severance
charges. |
(3) Restructuring
charges relate to the closure of manufacturing plant
facilities. |
QUANEX BUILDING PRODUCTS
CORPORATIONSELECTED SEGMENT DATA(In
thousands)(Unaudited)
This table provides
gross margin, operating (loss) income, 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 Cabinet Components |
|
Unallocated Corp & Other |
|
Total |
Three months ended
July 31, 2021 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
147,818 |
|
|
$ |
71,114 |
|
|
$ |
61,936 |
|
|
$ |
(991 |
) |
|
$ |
279,877 |
|
Cost of sales |
|
|
116,517 |
|
|
|
49,479 |
|
|
|
54,334 |
|
|
|
(464 |
) |
|
|
219,866 |
|
Gross Margin |
|
|
31,301 |
|
|
|
21,635 |
|
|
|
7,602 |
|
|
|
(527 |
) |
|
|
60,011 |
|
Gross Margin % |
|
|
21.2% |
|
|
|
30.4% |
|
|
|
12.3% |
|
|
|
|
|
21.4% |
|
Selling, general and administrative |
|
|
13,428 |
|
|
|
7,525 |
|
|
|
5,130 |
|
|
|
1,683 |
|
|
|
27,766 |
|
Depreciation and amortization |
|
|
4,571 |
|
|
|
2,646 |
|
|
|
3,390 |
|
|
|
76 |
|
|
|
10,683 |
|
Operating income (loss) |
|
|
13,302 |
|
|
|
11,464 |
|
|
|
(918 |
) |
|
|
(2,286 |
) |
|
|
21,562 |
|
Depreciation and amortization |
|
|
4,571 |
|
|
|
2,646 |
|
|
|
3,390 |
|
|
|
76 |
|
|
|
10,683 |
|
EBITDA |
|
|
17,873 |
|
|
|
14,110 |
|
|
|
2,472 |
|
|
|
(2,210 |
) |
|
|
32,245 |
|
Loss on the damage of a plant |
|
|
- |
|
|
|
307 |
|
|
|
- |
|
|
|
- |
|
|
|
307 |
|
Loss on sale of plant |
|
|
375 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
375 |
|
Adjusted EBITDA |
|
$ |
18,248 |
|
|
$ |
14,417 |
|
|
$ |
2,472 |
|
|
$ |
(2,210 |
) |
|
$ |
32,927 |
|
Adjusted EBITDA Margin % |
|
|
12.3% |
|
|
|
20.3% |
|
|
|
4.0% |
|
|
|
|
|
11.8% |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
July 31, 2020 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
122,386 |
|
|
$ |
38,265 |
|
|
$ |
51,925 |
|
|
$ |
(480 |
) |
|
$ |
212,096 |
|
Cost of sales |
|
|
92,639 |
|
|
|
25,845 |
|
|
|
44,218 |
|
|
|
(275 |
) |
|
|
162,427 |
|
Gross Margin |
|
|
29,747 |
|
|
|
12,420 |
|
|
|
7,707 |
|
|
|
(205 |
) |
|
|
49,669 |
|
Gross Margin % |
|
|
24.3% |
|
|
|
32.5% |
|
|
|
14.8% |
|
|
|
|
|
23.4% |
|
Selling, general and administrative |
|
|
11,922 |
|
|
|
4,748 |
|
|
|
4,634 |
|
|
|
669 |
|
|
|
21,973 |
|
Restructuring charges |
|
|
71 |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
73 |
|
Depreciation and amortization |
|
|
5,371 |
|
|
|
2,307 |
|
|
|
3,264 |
|
|
|
118 |
|
|
|
11,060 |
|
Operating income (loss) |
|
|
12,383 |
|
|
|
5,365 |
|
|
|
(193 |
) |
|
|
(992 |
) |
|
|
16,563 |
|
Depreciation and amortization |
|
|
5,371 |
|
|
|
2,307 |
|
|
|
3,264 |
|
|
|
118 |
|
|
|
11,060 |
|
EBITDA |
|
|
17,754 |
|
|
|
7,672 |
|
|
|
3,071 |
|
|
|
(874 |
) |
|
|
27,623 |
|
Restructuring charges |
|
|
71 |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
73 |
|
Adjusted EBITDA |
|
$ |
17,825 |
|
|
$ |
7,672 |
|
|
$ |
3,073 |
|
|
$ |
(874 |
) |
|
$ |
27,696 |
|
Adjusted EBITDA Margin % |
|
|
14.6% |
|
|
|
20.0% |
|
|
|
5.9% |
|
|
|
|
|
13.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended July
31, 2021 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
422,077 |
|
|
$ |
181,862 |
|
|
$ |
179,492 |
|
|
$ |
(3,050 |
) |
|
$ |
780,381 |
|
Cost of sales |
|
|
328,278 |
|
|
|
122,631 |
|
|
|
155,370 |
|
|
|
(1,556 |
) |
|
|
604,723 |
|
Gross Margin |
|
|
93,799 |
|
|
|
59,231 |
|
|
|
24,122 |
|
|
|
(1,494 |
) |
|
|
175,658 |
|
Gross Margin % |
|
|
22.2% |
|
|
|
32.6% |
|
|
|
13.4% |
|
|
|
|
|
22.5% |
|
Selling, general and administrative |
|
|
38,944 |
|
|
|
21,559 |
|
|
|
15,372 |
|
|
|
12,424 |
|
|
|
88,299 |
|
Restructuring charges |
|
|
39 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
39 |
|
Depreciation and amortization |
|
|
14,528 |
|
|
|
7,771 |
|
|
|
9,965 |
|
|
|
279 |
|
|
|
32,543 |
|
Operating income (loss) |
|
|
40,288 |
|
|
|
29,901 |
|
|
|
(1,215 |
) |
|
|
(14,197 |
) |
|
|
54,777 |
|
Depreciation and amortization |
|
|
14,528 |
|
|
|
7,771 |
|
|
|
9,965 |
|
|
|
279 |
|
|
|
32,543 |
|
EBITDA |
|
|
54,816 |
|
|
|
37,672 |
|
|
|
8,750 |
|
|
|
(13,918 |
) |
|
|
87,320 |
|
Loss on the damage of a plant |
|
|
- |
|
|
|
307 |
|
|
|
- |
|
|
|
- |
|
|
|
307 |
|
Loss on sale of plant |
|
|
375 |
|
|
|
- |
|
|
|
- |
|
|
|
1,439 |
|
|
|
1,814 |
|
Restructuring charges |
|
|
39 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
39 |
|
Adjusted EBITDA |
|
$ |
55,230 |
|
|
$ |
37,979 |
|
|
$ |
8,750 |
|
|
$ |
(12,479 |
) |
|
$ |
89,480 |
|
Adjusted EBITDA Margin % |
|
|
13.1% |
|
|
|
20.9% |
|
|
|
4.9% |
|
|
|
|
|
11.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended July
31, 2020 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
341,432 |
|
|
$ |
104,230 |
|
|
$ |
152,634 |
|
|
$ |
(2,128 |
) |
|
$ |
596,168 |
|
Cost of sales |
|
|
266,489 |
|
|
|
72,055 |
|
|
|
132,259 |
|
|
|
(1,217 |
) |
|
|
469,586 |
|
Gross Margin |
|
|
74,943 |
|
|
|
32,175 |
|
|
|
20,375 |
|
|
|
(911 |
) |
|
|
126,582 |
|
Gross Margin % |
|
|
21.9% |
|
|
|
30.9% |
|
|
|
13.3% |
|
|
|
|
|
21.2% |
|
Selling, general and administrative |
|
|
34,962 |
|
|
|
15,990 |
|
|
|
13,468 |
|
|
|
(1,602 |
) |
|
|
62,818 |
|
Restructuring charges |
|
|
228 |
|
|
|
- |
|
|
|
249 |
|
|
|
- |
|
|
|
477 |
|
Depreciation and amortization |
|
|
18,311 |
|
|
|
7,045 |
|
|
|
10,139 |
|
|
|
356 |
|
|
|
35,851 |
|
Operating income (loss) |
|
|
21,442 |
|
|
|
9,140 |
|
|
|
(3,481 |
) |
|
|
335 |
|
|
|
27,436 |
|
Depreciation and amortization |
|
|
18,311 |
|
|
|
7,045 |
|
|
|
10,139 |
|
|
|
356 |
|
|
|
35,851 |
|
EBITDA |
|
|
39,753 |
|
|
|
16,185 |
|
|
|
6,658 |
|
|
|
691 |
|
|
|
63,287 |
|
Transaction and advisory fees |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
55 |
|
|
|
55 |
|
Executive severance charges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,343 |
|
|
|
1,343 |
|
Restructuring charges |
|
|
228 |
|
|
|
- |
|
|
|
249 |
|
|
|
- |
|
|
|
477 |
|
Adjusted EBITDA |
|
$ |
39,981 |
|
|
$ |
16,185 |
|
|
$ |
6,907 |
|
|
$ |
2,089 |
|
|
$ |
65,162 |
|
Adjusted EBITDA Margin % |
|
|
11.7% |
|
|
|
15.5% |
|
|
|
4.5% |
|
|
|
|
|
10.9% |
|
QUANEX BUILDING PRODUCTS
CORPORATIONSALES ANALYSIS(In
thousands)(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
July 31, 2021 |
|
July 31, 2020 |
|
July 31, 2021 |
|
July 31, 2020 |
|
|
|
|
|
|
|
|
|
NA
Fenestration: |
|
|
|
|
|
|
|
|
United States - fenestration |
$ |
129,291 |
|
|
$ |
109,455 |
|
|
$ |
369,809 |
|
|
$ |
302,094 |
|
|
International -
fenestration |
|
9,581 |
|
|
|
6,696 |
|
|
|
25,756 |
|
|
|
19,284 |
|
|
United States -
non-fenestration |
|
5,853 |
|
|
|
4,845 |
|
|
|
17,543 |
|
|
|
13,779 |
|
|
International -
non-fenestration |
|
3,093 |
|
|
|
1,390 |
|
|
|
8,969 |
|
|
|
6,275 |
|
|
|
$ |
147,818 |
|
|
$ |
122,386 |
|
|
$ |
422,077 |
|
|
$ |
341,432 |
|
EU
Fenestration (1): |
|
|
|
|
|
|
|
|
International -
fenestration |
$ |
54,883 |
|
|
$ |
31,904 |
|
|
$ |
147,072 |
|
|
$ |
87,732 |
|
|
International -
non-fenestration |
|
16,231 |
|
|
|
6,361 |
|
|
|
34,790 |
|
|
|
16,498 |
|
|
|
$ |
71,114 |
|
|
$ |
38,265 |
|
|
$ |
181,862 |
|
|
$ |
104,230 |
|
NA Cabinet
Components: |
|
|
|
|
|
|
|
|
United States -
fenestration |
$ |
3,240 |
|
|
$ |
2,666 |
|
|
$ |
9,711 |
|
|
$ |
8,461 |
|
|
United States -
non-fenestration |
|
57,418 |
|
|
|
48,849 |
|
|
|
168,308 |
|
|
|
142,838 |
|
|
International -
non-fenestration |
|
1,278 |
|
|
|
410 |
|
|
|
1,473 |
|
|
|
1,335 |
|
|
|
$ |
61,936 |
|
|
$ |
51,925 |
|
|
$ |
179,492 |
|
|
$ |
152,634 |
|
Unallocated Corporate & Other: |
|
|
|
|
|
|
|
|
Eliminations |
$ |
(991 |
) |
|
$ |
(480 |
) |
|
$ |
(3,050 |
) |
|
$ |
(2,128 |
) |
|
|
$ |
(991 |
) |
|
$ |
(480 |
) |
|
$ |
(3,050 |
) |
|
$ |
(2,128 |
) |
|
|
|
|
|
|
|
|
|
Net
Sales |
$ |
279,877 |
|
|
$ |
212,096 |
|
|
$ |
780,381 |
|
|
$ |
596,168 |
|
|
|
|
|
|
|
|
|
|
(1) Reflects
increase of $4.1 million and $8.6 million in revenue associated
with foreign currency exchange rate impacts for the three and nine
months ended July 31, 2021, respectively. |
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