Quanex Building Products Announces Third Quarter 2018 Results
Board Approves 100% Dividend Increase and Authorizes
Strong Free Cash Flow Generation Facilitates Deleveraging and Return of Capital to Shareholders
Significant Margin Expansion in NA Cabinet Components Segment
Healthy Underlying Growth Continues in NA and EU Engineered Components Segments
“We are also pleased that our strong free cash flow generation in the third quarter facilitated a further reduction of our leverage ratio to 2.0x Net Debt to LTM Adjusted EBITDA as of
“As part of a strategic review process, our Board of Directors and management team, with the support of outside advisors, recently undertook a thorough review of Quanex’s strategy and business, and evaluated a broad range of strategic alternatives to maximize shareholder value. Our Board of Directors unanimously concluded that the best path forward for the Company and its shareholders at this time is the continued execution of our strategic plan and the accelerated return of capital. We remain open to and will continue to consider all opportunities to create additional shareholder value.”
Third Quarter 2018 Results Summary
The Company reported the following selected financial results:
Three Months Ended July 31, | Nine Months Ended July 31, | |||||||
2018 | 2017 | 2018 | 2017 | |||||
Net Sales | $239.8 | $229.4 | $645.7 | $634.4 | ||||
Net Income | $10.8 | $10.2 | $19.8 | $8.0 | ||||
Diluted EPS | $0.31 | $0.29 | $0.56 | $0.23 | ||||
Adjusted Net Income | $11.6 | $11.5 | $15.1 | $13.9 | ||||
Adjusted Diluted EPS | $0.33 | $0.33 | $0.43 | $0.40 | ||||
Adjusted EBITDA | $30.8 | $32.2 | $65.7 | $65.7 | ||||
Cash provided by operating activities | $26.8 | $29.7 | $48.5 | $46.5 | ||||
Free Cash Flow | $21.0 | $20.2 | $27.4 | $19.4 |
(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)
Similar to the first half of 2018, the increase in net sales during the third quarter was largely driven by market growth combined with price increases mostly related to raw material inflation recovery and a favorable foreign exchange impact. (See Sales Analysis table for additional information)
The increase in net income for the third quarter of 2018 was primarily driven by lower depreciation and amortization coupled with a lower effective tax rate.
Adjusted EBITDA decreased slightly during the third quarter of 2018 mainly due to the negative impact of inflationary pressures combined with an increase in selling, general and administrative expense as results for the third quarter of 2017 included a benefit of
As of
Strategy Update and Recent Events
Quanex is committed to driving operational improvement and creating shareholder value. As part of a strategic review process, the Company’s Board of Directors (the “Board”) and management team, with Citi as financial advisor, recently completed a comprehensive review of Quanex’s overall strategy, capital structure and capital allocation priorities. As part of that review process, the Board evaluated a broad range of strategic alternatives, including a potential sale of the Company, and carefully considered feedback from shareholders.
The Board unanimously concluded that, at this time, Quanex is best positioned to drive value for shareholders through the continued successful execution of its strategy and continued focus on driving improved performance and returning capital to shareholders.
As such, the Board declared a quarterly cash dividend of
In addition, Quanex’s Board of Directors authorized a
The Board will continue to consider all opportunities to further enhance shareholder value now and in the future.
Conference Call and Webcast Information
The Company has scheduled a conference call for
About Quanex
For more information contact
Non-GAAP Terminology Definitions and Disclaimers
Adjusted Net Income (Loss) (defined as net income further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, gain/loss on the sale of fixed assets, restructuring charges, other net adjustments related to foreign currency transaction gain/loss and effective tax rates reflecting impacts of adjustments on a with and without basis) and Adjusted EPS are non-GAAP financial measures that Quanex believes provide a consistent basis for comparison between periods and more accurately reflects operational performance, as they are not influenced by certain income or expense items not affecting ongoing operations. EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) and Adjusted EBITDA (defined as EBITDA further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, gain/loss on the sale of fixed assets, and restructuring charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making. When Quanex provides expectations for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures is generally not available without unreasonable effort. Net Debt is calculated using the sum of current maturities of long-term debt and long-term debt, minus cash and cash equivalents. The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating Quanex’s leverage. In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company’s credit agreement. Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures. Quanex believes that the presented non-GAAP measures provide a consistent basis for comparison between periods, and will assist investors in understanding the Company’s financial performance when comparing results to other investment opportunities. The presented non-GAAP measures may not be the same as those used by other companies. Quanex does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP.
Forward Looking Statements
Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the Company’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex’s industry, and the Company’s future growth, including any guidance discussed in this press release. The statements and guidance set forth in this release are based on current expectations. Actual results or events may differ materially from this release. For a complete discussion of factors that may affect Quanex’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended
QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (In thousands, except per share data) (Unaudited) |
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Three Months Ended July 31, | Nine Months Ended July 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net sales | $ | 239,821 | $ | 229,367 | $ | 645,699 | $ | 634,406 | ||||||||
Cost of sales | 185,610 | 176,758 | 508,791 | 494,647 | ||||||||||||
Selling, general and administrative | 24,190 | 20,478 | 72,049 | 74,839 | ||||||||||||
Restructuring charges | 243 | 864 | 851 | 3,083 | ||||||||||||
Depreciation and amortization | 12,691 | 13,915 | 39,274 | 43,701 | ||||||||||||
Operating income | 17,087 | 17,352 | 24,734 | 18,136 | ||||||||||||
Interest expense | (2,641 | ) | (2,575 | ) | (7,584 | ) | (7,126 | ) | ||||||||
Other, net | (62 | ) | 46 | 150 | 572 | |||||||||||
Income before income taxes | 14,384 | 14,823 | 17,300 | 11,582 | ||||||||||||
Income tax (expense) benefit | (3,631 | ) | (4,608 | ) | 2,536 | (3,631 | ) | |||||||||
Net income | $ | 10,753 | $ | 10,215 | $ | 19,836 | $ | 7,951 | ||||||||
Income per common share, basic | $ | 0.31 | $ | 0.30 | $ | 0.57 | $ | 0.23 | ||||||||
Income per common share, diluted | $ | 0.31 | $ | 0.29 | $ | 0.56 | $ | 0.23 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 34,840 | 34,224 | 34,766 | 34,141 | ||||||||||||
Diluted | 35,120 | 34,924 | 35,124 | 34,771 | ||||||||||||
Cash dividends per share | $ | 0.04 | $ | 0.04 | $ | 0.12 | $ | 0.12 | ||||||||
QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
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July 31, 2018 | October 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 12,400 | $ | 17,455 | ||||
Accounts receivable, net | 80,236 | 79,411 | ||||||
Inventories, net | 87,105 | 87,529 | ||||||
Prepaid and other current assets | 8,636 | 7,406 | ||||||
Total current assets | 188,377 | 191,801 | ||||||
Property, plant and equipment, net | 205,304 | 211,131 | ||||||
Goodwill | 221,587 | 222,194 | ||||||
Intangible assets, net | 127,071 | 139,778 | ||||||
Other assets | 9,184 | 8,975 | ||||||
Total assets | $ | 751,523 | $ | 773,879 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 44,871 | $ | 44,150 | ||||
Accrued liabilities | 31,693 | 38,871 | ||||||
Income taxes payable | 2,405 | 2,192 | ||||||
Current maturities of long-term debt | 16,120 | 21,242 | ||||||
Total current liabilities | 95,089 | 106,455 | ||||||
Long-term debt | 193,654 | 218,184 | ||||||
Deferred pension and postretirement benefits | 6,612 | 4,433 | ||||||
Deferred income taxes | 16,765 | 21,960 | ||||||
Other liabilities | 15,640 | 16,000 | ||||||
Total liabilities | 327,760 | 367,032 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 374 | 375 | ||||||
Additional paid-in-capital | 253,806 | 255,719 | ||||||
Retained earnings | 240,025 | 225,704 | ||||||
Accumulated other comprehensive loss | (27,601 | ) | (25,076 | ) | ||||
Treasury stock at cost | (42,841 | ) | (49,875 | ) | ||||
Total stockholders’ equity | 423,763 | 406,847 | ||||||
Total liabilities and stockholders' equity | $ | 751,523 | $ | 773,879 | ||||
QUANEX BUILDING PRODUCTS CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended July 31, | ||||||||
2018 | 2017 (1) | |||||||
Operating activities: | ||||||||
Net income | $ | 19,836 | $ | 7,951 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 39,274 | 43,701 | ||||||
Stock-based compensation | 1,002 | 4,305 | ||||||
Deferred income tax | (5,788 | ) | (1,847 | ) | ||||
Other, net | 404 | 1,136 | ||||||
Changes in assets and liabilities: | ||||||||
(Increase) decrease in accounts receivable | (1,247 | ) | 6,923 | |||||
Decrease (increase) in inventory | 310 | (8,576 | ) | |||||
Increase in other current assets | (1,242 | ) | (379 | ) | ||||
Increase (decrease) in accounts payable | 1,161 | (3,145 | ) | |||||
Decrease in accrued liabilities | (7,565 | ) | (11,327 | ) | ||||
Increase in income taxes payable | 231 | 4,349 | ||||||
Increase in deferred pension and postretirement benefits | 2,179 | 2,537 | ||||||
Increase in other long-term liabilities | 210 | 1,226 | ||||||
Other, net | (312 | ) | (389 | ) | ||||
Cash provided by operating activities | 48,453 | 46,465 | ||||||
Investing activities: | ||||||||
Acquisitions, net of cash acquired | - | (8,497 | ) | |||||
Capital expenditures | (21,098 | ) | (27,098 | ) | ||||
Proceeds from disposition of capital assets | 260 | 1,232 | ||||||
Cash used for investing activities | (20,838 | ) | (34,363 | ) | ||||
Financing activities: | ||||||||
Borrowings under credit facilities | 33,500 | 53,500 | ||||||
Repayments of credit facility borrowings | (62,750 | ) | (74,125 | ) | ||||
Repayments of other long-term debt | (1,394 | ) | (2,240 | ) | ||||
Common stock dividends paid | (4,202 | ) | (4,127 | ) | ||||
Issuance of common stock | 3,767 | 6,379 | ||||||
Payroll tax paid to settle shares forfeited upon vesting of stock | (960 | ) | (976 | ) | ||||
Cash used for financing activities | (32,039 | ) | (21,589 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (631 | ) | (248 | ) | ||||
Decrease in cash and cash equivalents | (5,055 | ) | (9,735 | ) | ||||
Cash and cash equivalents at beginning of period | 17,455 | 25,526 | ||||||
Cash and cash equivalents at end of period | $ | 12,400 | $ | 15,791 | ||||
(1) Updated to reflect adoption of ASU 2016-09. | ||||||||
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 July 31, | Nine Months Ended July 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Cash provided by operating activities | $26,838 | $29,736 | $48,453 | $46,465 | ||||||||||||
Capital expenditures | (5,885) | (9,548) | (21,098) | (27,098) | ||||||||||||
Free Cash Flow | $20,953 | $20,188 | $27,355 | $19,367 | ||||||||||||
QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE (In thousands, except per share data) (Unaudited) |
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Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
Reconciliation of Adjusted Net Income and Adjusted EPS | July 31, 2018 | July 31, 2017 | July 31, 2018 | July 31, 2017 | ||||||||||||||||||||||||||||||||||||
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
Net Income |
Diluted EPS |
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Net income as reported | $ | 10,753 | $ | 0.31 | $ | 10,215 | $ | 0.29 | $ | 19,836 | $ | 0.56 | $ | 7,951 | $ | 0.23 | ||||||||||||||||||||||||
Reconciling items from below | 828 | 0.02 | 1,277 | 0.04 | (4,727 | ) | (0.13 | ) | 5,965 | 0.17 | ||||||||||||||||||||||||||||||
Adjusted net income and adjusted EPS | $ | 11,581 | $ | 0.33 | $ | 11,492 | $ | 0.33 | $ | 15,109 | $ | 0.43 | $ | 13,916 | $ | 0.40 | ||||||||||||||||||||||||
Reconciliation of Adjusted EBITDA | Three Months Ended July 31, 2018 |
Three Months Ended July 31, 2017 |
Nine Months Ended July 31, 2018 |
Nine Months Ended July 31, 2017 |
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Reconciliation | Reconciliation | Reconciliation | Reconciliation | |||||||||||||||||||||||||||||||||||||
Net income as reported | $ | 10,753 | $ | 10,215 | $ | 19,836 | $ | 7,951 | ||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 3,631 | 4,608 | (2,536 | ) | 3,631 | |||||||||||||||||||||||||||||||||||
Other, net | 62 | (46 | ) | (150 | ) | (572 | ) | |||||||||||||||||||||||||||||||||
Interest expense | 2,641 | 2,575 | 7,584 | 7,126 | ||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 12,691 | 13,915 | 39,274 | 43,701 | ||||||||||||||||||||||||||||||||||||
EBITDA | 29,778 | 31,267 | 64,008 | 61,837 | ||||||||||||||||||||||||||||||||||||
Reconciling items from below | 1,027 | 899 | 1,649 | 3,892 | ||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 30,805 | $ | 32,166 | $ | 65,657 | $ | 65,729 | ||||||||||||||||||||||||||||||||
Reconciling Items | Three Months Ended July 31, 2018 |
Three Months Ended July 31, 2017 |
Nine Months Ended July 31, 2018 |
Nine Months Ended July 31, 2017 |
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Income Statement |
Reconciling Items |
Income Statement |
Reconciling Items |
Income Statement |
Reconciling Items |
Income Statement |
Reconciling Items |
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Net sales | $ | 239,821 | $ | - | $ | 229,367 | $ | - | $ | 645,699 | $ | - | $ | 634,406 | $ | - | ||||||||||||||||||||||||
Cost of sales | 185,610 | - | 176,758 | - | 508,791 | - | 494,647 | (104 | ) | (1 | ) | |||||||||||||||||||||||||||||
Selling, general and administrative | 24,190 | (784 | ) | (2 | ) | 20,478 | (35 | ) | (2 | ) | 72,049 | (798 | ) | (2 | ) | 74,839 | (705 | ) | (2 | ) | ||||||||||||||||||||
Restructuring charges | 243 | (243 | ) | (3 | ) | 864 | (864 | ) | (3 | ) | 851 | (851 | ) | (3 | ) | 3,083 | (3,083 | ) | (3 | ) | ||||||||||||||||||||
EBITDA | 29,778 | 1,027 | 31,267 | 899 | 64,008 | 1,649 | 61,837 | 3,892 | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 12,691 | - | 13,915 | (1,277 | ) | (4 | ) | 39,274 | (852 | ) | (5 | ) | 43,701 | (5,502 | ) | (4 | ) | |||||||||||||||||||||||
Operating income | 17,087 | 1,027 | 17,352 | 2,176 | 24,734 | 2,501 | 18,136 | 9,394 | ||||||||||||||||||||||||||||||||
Interest expense | (2,641 | ) | - | (2,575 | ) | - | (7,584 | ) | - | (7,126 | ) | - | ||||||||||||||||||||||||||||
Other, net | (62 | ) | 79 | (6 | ) | 46 | (39 | ) | (6 | ) | 150 | (88 | ) | (6 | ) | 572 | (514 | ) | (6 | ) | ||||||||||||||||||||
Income before income taxes | 14,384 | 1,106 | 14,823 | 2,137 | 17,300 | 2,413 | 11,582 | 8,880 | ||||||||||||||||||||||||||||||||
Income tax (expense) benefit | (3,631 | ) | (278 | ) | (7 | ) | (4,608 | ) | (860 | ) | (7 | ) | 2,536 | (7,140 | ) | (7 | ) | (3,631 | ) | (2,915 | ) | (7 | ) | |||||||||||||||||
Net income (loss) | $ | 10,753 | $ | 828 | $ | 10,215 | $ | 1,277 | $ | 19,836 | $ | (4,727 | ) | $ | 7,951 | $ | 5,965 | |||||||||||||||||||||||
Diluted earnings per share | $ | 0.31 | $ | 0.29 | $ | 0.56 | $ | 0.23 | ||||||||||||||||||||||||||||||||
(1) Relates solely to purchase price accounting inventory step-up impact from HL Plastics acquisition. | ||||||||||||||||||||||||||||||||||||||||
(2) Transaction and advisory fees and in 2017, loss on sale of fixed assets related to the closure of a plant and a one-time employee benefit adjustment. | ||||||||||||||||||||||||||||||||||||||||
(3) Restructuring charges relate to the closure of several manufacturing plant facilities. | ||||||||||||||||||||||||||||||||||||||||
(4) Accelerated depreciation and amortization for restructured PP&E and intangible assets. | ||||||||||||||||||||||||||||||||||||||||
(5) Accelerated depreciation for a plant re-layout in the North American Cabinet Components segment. | ||||||||||||||||||||||||||||||||||||||||
(6) Foreign currency transaction losses (gains). | ||||||||||||||||||||||||||||||||||||||||
(7) Impact on a with and without basis. Nine months ended July 31, 2018 includes $6.5 million adjustment related to the Tax Cuts and Jobs Act. | ||||||||||||||||||||||||||||||||||||||||
QUANEX BUILDING PRODUCTS CORPORATION SELECTED SEGMENT DATA (In thousands) (Unaudited) |
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This table provides operating income (loss), EBITDA, and Adjusted EBITDA by reportable segment. Non-operating expense and income tax expense are not allocated to the reportable segments. | ||||||||||||||||||||
NA Engineered Components |
EU Engineered Components |
NA Cabinet Components |
Unallocated Corp & Other |
Total | ||||||||||||||||
Three months ended July 31, 2018 | ||||||||||||||||||||
Net sales | $ | 133,397 | $ | 42,661 | $ | 65,114 | $ | (1,351 | ) | $ | 239,821 | |||||||||
Cost of sales | 100,999 | 30,840 | 54,755 | (984 | ) | 185,610 | ||||||||||||||
Selling, general and administrative | 13,147 | 5,535 | 3,584 | 1,924 | 24,190 | |||||||||||||||
Restructuring charges | 240 | - | 3 | - | 243 | |||||||||||||||
Depreciation and amortization | 6,741 | 2,352 | 3,432 | 166 | 12,691 | |||||||||||||||
Operating income (loss) | 12,270 | 3,934 | 3,340 | (2,457 | ) | 17,087 | ||||||||||||||
Depreciation and amortization | 6,741 | 2,352 | 3,432 | 166 | 12,691 | |||||||||||||||
EBITDA | 19,011 | 6,286 | 6,772 | (2,291 | ) | 29,778 | ||||||||||||||
Transaction and advisory fees | - | - | - | 784 | 784 | |||||||||||||||
Restructuring charges | 240 | - | 3 | - | 243 | |||||||||||||||
Adjusted EBITDA | $ | 19,251 | $ | 6,286 | $ | 6,775 | $ | (1,507 | ) | $ | 30,805 | |||||||||
Adjusted EBITDA Margin % | 14.4% | 14.7% | 10.4% | 12.8% | ||||||||||||||||
Three months ended July 31, 2017 | ||||||||||||||||||||
Net sales | $ | 126,446 | $ | 40,359 | $ | 63,839 | $ | (1,277 | ) | $ | 229,367 | |||||||||
Cost of sales | 94,169 | 29,002 | 54,538 | (951 | ) | 176,758 | ||||||||||||||
Selling, general and administrative | 11,829 | 5,162 | 3,968 | (481 | ) | 20,478 | ||||||||||||||
Restructuring charges | 727 | - | 137 | - | 864 | |||||||||||||||
Depreciation and amortization | 7,899 | 2,391 | 3,491 | 134 | 13,915 | |||||||||||||||
Operating income | 11,822 | 3,804 | 1,705 | 21 | 17,352 | |||||||||||||||
Depreciation and amortization | 7,899 | 2,391 | 3,491 | 134 | 13,915 | |||||||||||||||
EBITDA | 19,721 | 6,195 | 5,196 | 155 | 31,267 | |||||||||||||||
Transaction and advisory fees | - | - | - | 35 | 35 | |||||||||||||||
Restructuring charges | 727 | - | 137 | - | 864 | |||||||||||||||
Adjusted EBITDA | $ | 20,448 | $ | 6,195 | $ | 5,333 | $ | 190 | $ | 32,166 | ||||||||||
Adjusted EBITDA Margin % | 16.2% | 15.3% | 8.4% | 14.0% | ||||||||||||||||
Nine months ended July 31, 2018 | ||||||||||||||||||||
Net sales | $ | 350,280 | $ | 115,481 | $ | 183,705 | $ | (3,767 | ) | $ | 645,699 | |||||||||
Cost of sales | 269,156 | 83,261 | 159,066 | (2,692 | ) | 508,791 | ||||||||||||||
Selling, general and administrative | 40,393 | 17,218 | 12,894 | 1,544 | 72,049 | |||||||||||||||
Restructuring charges | 728 | - | 123 | - | 851 | |||||||||||||||
Depreciation and amortization | 20,561 | 7,328 | 10,957 | 428 | 39,274 | |||||||||||||||
Operating income (loss) | 19,442 | 7,674 | 665 | (3,047 | ) | 24,734 | ||||||||||||||
Depreciation and amortization | 20,561 | 7,328 | 10,957 | 428 | 39,274 | |||||||||||||||
EBITDA | 40,003 | 15,002 | 11,622 | (2,619 | ) | 64,008 | ||||||||||||||
Transaction and advisory fees | - | - | - | 798 | 798 | |||||||||||||||
Restructuring charges | 728 | - | 123 | - | 851 | |||||||||||||||
Adjusted EBITDA | $ | 40,731 | $ | 15,002 | $ | 11,745 | $ | (1,821 | ) | $ | 65,657 | |||||||||
Adjusted EBITDA Margin % | 11.6% | 13.0% | 6.4% | 10.2% | ||||||||||||||||
Nine months ended July 31, 2017 | ||||||||||||||||||||
Net sales | $ | 343,694 | $ | 106,133 | $ | 188,359 | $ | (3,780 | ) | $ | 634,406 | |||||||||
Cost of sales | 260,479 | 75,304 | 161,704 | (2,840 | ) | 494,647 | ||||||||||||||
Selling, general and administrative | 38,770 | 15,132 | 12,739 | 8,198 | 74,839 | |||||||||||||||
Restructuring charges | 2,207 | - | 876 | - | 3,083 | |||||||||||||||
Depreciation and amortization | 26,377 | 6,753 | 10,160 | 411 | 43,701 | |||||||||||||||
Operating income (loss) | 15,861 | 8,944 | 2,880 | (9,549 | ) | 18,136 | ||||||||||||||
Depreciation and amortization | 26,377 | 6,753 | 10,160 | 411 | 43,701 | |||||||||||||||
EBITDA | 42,238 | 15,697 | 13,040 | (9,138 | ) | 61,837 | ||||||||||||||
Transaction and advisory fees | - | - | - | 327 | 327 | |||||||||||||||
Mexico restructuring, loss on sale of fixed assets | - | - | 190 | - | 190 | |||||||||||||||
One-time employee benefit adjustment | - | - | 188 | - | 188 | |||||||||||||||
PPA-Inventory Step-up | - | 104 | - | - | 104 | |||||||||||||||
Restructuring charges | 2,207 | - | 876 | - | 3,083 | |||||||||||||||
Adjusted EBITDA | $ | 44,445 | $ | 15,801 | $ | 14,294 | $ | (8,811 | ) | $ | 65,729 | |||||||||
Adjusted EBITDA Margin % | 12.9% | 14.9% | 7.6% | 10.4% | ||||||||||||||||
QUANEX BUILDING PRODUCTS CORPORATION SALES ANALYSIS (In thousands) (Unaudited) |
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Three Months Ended | Nine Months Ended | |||||||||||||||
July 31, 2018 | July 31, 2017 | July 31, 2018 | July 31, 2017 | |||||||||||||
NA Engineered Components: | ||||||||||||||||
United States - fenestration (1) | $ | 112,914 | $ | 107,193 | $ | 297,700 | $ | 289,231 | ||||||||
International - fenestration | 11,851 | 9,959 | 27,758 | 24,945 | ||||||||||||
United States - non-fenestration (2) | 4,675 | 7,060 | 13,518 | 19,590 | ||||||||||||
International - non-fenestration | 3,957 | 2,234 | 11,304 | 9,928 | ||||||||||||
$ | 133,397 | $ | 126,446 | $ | 350,280 | $ | 343,694 | |||||||||
EU Engineered Components (3): | ||||||||||||||||
United States - fenestration | $ | - | $ | 190 | $ | - | $ | 304 | ||||||||
International - fenestration (4) | 34,881 | 35,087 | 97,597 | 94,528 | ||||||||||||
International - non-fenestration | 7,780 | 5,082 | 17,884 | 11,301 | ||||||||||||
$ | 42,661 | $ | 40,359 | $ | 115,481 | $ | 106,133 | |||||||||
NA Cabinet Components: | ||||||||||||||||
United States - fenestration | $ | 3,650 | $ | 4,322 | $ | 10,500 | $ | 12,316 | ||||||||
United States - non-fenestration (5) | 60,843 | 59,237 | 171,547 | 174,404 | ||||||||||||
International - non-fenestration | 621 | 280 | 1,658 | 1,639 | ||||||||||||
$ | 65,114 | $ | 63,839 | $ | 183,705 | $ | 188,359 | |||||||||
Unallocated Corporate & Other: | ||||||||||||||||
Eliminations | $ | (1,351 | ) | $ | (1,277 | ) | $ | (3,767 | ) | $ | (3,780 | ) | ||||
$ | (1,351 | ) | $ | (1,277 | ) | $ | (3,767 | ) | $ | (3,780 | ) | |||||
Net Sales | $ | 239,821 | $ | 229,367 | $ | 645,699 | $ | 634,406 | ||||||||
(1) Reflects the loss of revenue associated with eliminated products of $2.6 million and $11.7 million for the three and nine months ended July 31, 2018. | ||||||||||||||||
(2) Reflects the loss of revenue associated with eliminated products of $2.1 million and $7.5 million for the three and nine months ended July 31, 2018. | ||||||||||||||||
(3) Reflects a gain of $1.1 million and $7.9 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2018. | ||||||||||||||||
(4) Reflects loss of revenue associated with eliminated products of $1.8 million and $6.5 million for the three and nine months ended July 31, 2018. | ||||||||||||||||
(5) Reflects the loss of revenue associated with eliminated products of $0.2 million and $3.9 million for the three and nine months ended July 31, 2018. |
Source: Quanex Building Products Corporation