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Quanex Building Products Announces Fourth Quarter and Fiscal Year 2020 Results

Margin Expansion Realized Across All Segments in 4Q20
Balance Sheet & Liquidity Continue to Improve and Remain Strong
~5% Increase in Cash Provided by Operating Activities in FY20
Repaid $35 Million of Bank Debt in 4Q20

HOUSTON, Dec. 10, 2020 (GLOBE NEWSWIRE) -- 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 Ended
October 31, 2020
    Three Months Ended
October 31, 2019
    Twelve Months Ended
October 31, 2020
    Twelve Months Ended
October 31, 2019
 
    Net
Income
  Diluted EPS     Net
Income
  Diluted
EPS
    Net
Income
  Diluted
EPS
    Net (Loss)
Income
  Diluted
EPS
 
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 Ended
October 31, 2020
    Three Months Ended
October 31, 2019
    Twelve Months Ended
October 31, 2020
    Twelve Months Ended
October 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 Ended
October 31, 2020
    Three Months Ended
October 31, 2019
    Twelve Months Ended
October 31, 2020
    Twelve Months Ended
October 31, 2019
 
    Income
Statement
  Reconciling
Items
    Income
Statement
  Reconciling
Items
    Income
Statement
  Reconciling
Items
    Income
Statement
  Reconciling
Items
 
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 Cabinet
Components
  Unallocated
Corp & 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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Source: Quanex Building Products Corporation