Quanex Building Products Corporation Fiscal 2012 Third Quarter Results
Reported Operating Income of
Insulating Glass Spacer Facility Consolidation Completed in August
Engineered Products Group Outperformed Its End Market
Cash & Equivalents of
Third quarter 2012 consolidated net sales were
Per Diluted Share | Segment | 3rd qtr 2012 | 3rd qtr 2011 |
Income As Reported | $0.04 | $0.24 | |
Impact on EPS: | |||
Strike Related | Nichols | ($0.03) | --- |
IG Facility Consolidation | EPG | ($0.04) | --- |
IG Warranty | EPG | $0.02 | --- |
Transaction Related | Corp | --- | ($0.02) |
ERP Implementation | Corp | ($0.03) | ($0.01) |
LIFO | Corp | --- | ($0.03) |
EPG's third quarter 2012 net sales were
EPG's third quarter 2012 operating income was
Engineered Products Group (in millions) | ||
3rd qtr 2012 | 3rd qtr 2011 | |
Net sales | $134.1 | $124.1 |
Operating income | $13.1* | $14.1 |
* Includes $2.5 million of IG facility consolidation expense and $0.8 million of IG Warranty benefit. |
EPG "same store" sales for the 12 months ended July, 2012 were up 6% from the previous 12 months, compared to total U.S. window shipments as reported by Ducker Worldwide down 2% over the same period. EPG is expected to report operating income of about
IG Spacer Consolidation Program
On
Nichols Aluminum's third quarter 2012 shipments, net sales, operating loss, and spread (sales less material costs) were 75 million pounds,
Compared to the year ago quarter, the operating loss reflected: reduced shipped pounds;
Aluminum Sheet Products (in millions except for spread) | ||
3rd qtr 2012 | 3rd qtr 2011 | |
Net sales | $107.0 | $132.1 |
Operating inc/(loss) | ($3.2)* | $7.4 |
Shipped pounds | 75 | 80 |
Spread per pound | $0.38 | $0.49 |
* Includes $2.1 million of strike-related coil purchase expenses. |
Nichols Aluminum's shipments for the 12 months ended
For the second half of 2012, Nichols is expected to ship roughly 150 million pounds (up modestly from the second half of 2011) at an estimated spread of
As previously reported, the Nichols Aluminum Decatur facility has experienced recurring quality issues with its painted aluminum sheet. In an effort to significantly improve the quality and efficiency of the facility, the company anticipates replacing the paint line's drying oven. The project is estimated to cost
Corporate and Other Items
Corporate expenses in the quarter were
Third Quarter 2012 Balances
At quarter end, Quanex had a cash balance of
Business Outlook
Difficult macro-economic factors will continue to create tough market conditions for Quanex. The company currently expects calendar year 2012 U.S. window shipments to be about 39 million units, essentially in-line with Ducker's 2012 forecasted shipments of 39.6 million. Quanex noted that while industry shipments of finished windows for the residential new home construction market continued to show meaningful improvement over 2011, residential R&R window shipments, a key end market for its
Dividend Declared
As previously announced on
Financial Statistics as of
Book value per common share:
Definitions
Book value per common share – calculated as total stockholders' equity as of balance sheet date divided by actual number of common shares outstanding;
Total debt to capitalization – calculated as the sum of both the current and long-term portion of debt, as of balance sheet date, divided by the sum of both the current and long-term portion of debt plus total stockholders' equity as of balance sheet date;
EBITDA – calculated as earnings before interest, taxes, depreciation and amortization;
Return on invested capital – calculated as the total of the prior 12 months net income plus prior 12 months after-tax interest expense and capitalized interest, the sum of which is divided by the trailing five quarters average total debt (current and long term) and total stockholders' equity.
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, references to synergies derived from the acquisition of
For additional information, please visit www.quanex.com
The
QUANEX BUILDING PRODUCTS CORPORATION | ||||
CONSOLIDATED STATEMENTS OF INCOME | ||||
(In thousands, except per share data) | ||||
(Unaudited) | ||||
Three Months Ended July 31, | Nine Months Ended July 31, | |||
2012 | 2011 | 2012 | 2011 | |
$237,905 | $252,413 | Net sales | $ 593,928 | $ 615,333 |
200,663 | 209,667 | Cost of sales (exclusive of items shown separately below) | 510,542 | 524,834 |
26,659 | 18,912 | Selling, general and administrative | 80,936 | 61,230 |
9,131 | 9,197 | Depreciation and amortization | 28,381 | 24,583 |
1,452 | 14,637 | Operating income (loss) | (25,931) | 4,686 |
(108) | (110) | Interest expense | (348) | (341) |
21 | (311) | Other, net | 199 | 127 |
Income (loss) from continuing operations | ||||
1,365 | 14,216 | before income taxes | (26,080) | 4,472 |
166 | (5,200) | Income tax benefit (expense) | 8,578 | (1,573) |
1,531 | 9,016 | Income (loss) from continuing operations | (17,502) | 2,899 |
— | — | Income (loss) from discontinued operations, net of taxes | — | (12) |
$ 1,531 | $ 9,016 | Net income (loss) | $ (17,502) | $ 2,887 |
Basic earnings per common share: | ||||
$ 0.04 | $ 0.24 | Earnings (loss) from continuing operations | $ (0.48) | $ 0.08 |
— | — | Income (loss) from discontinued operations | — | — |
$ 0.04 | $ 0.24 | Basic earnings (loss) per share | $ (0.48) | $ 0.08 |
Diluted earnings per common share: | ||||
$ 0.04 | $ 0.24 | Earnings (loss) from continuing operations | $ (0.48) | $ 0.08 |
— | — | Income (loss) from discontinued operations | — | — |
$ 0.04 | $ 0.24 | Diluted earnings (loss) per share | $ (0.48) | $ 0.08 |
Weighted average common shares outstanding: | ||||
36,637 | 37,125 | Basic | 36,584 | 37,103 |
37,163 | 37,684 | Diluted | 36,584 | 37,710 |
QUANEX BUILDING PRODUCTS CORPORATION | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(In thousands) | ||
(Unaudited) | ||
July 31, 2012 | October 31, 2011 | |
Assets | ||
$ 62,292 | Cash and equivalents | $ 89,619 |
88,348 | Accounts receivable, net | 81,969 |
62,944 | Inventories | 55,842 |
19,909 | Deferred income taxes | 11,220 |
8,443 | Prepaid and other current assets | 6,423 |
241,936 | Total current assets | 245,073 |
165,533 | Property, plant and equipment, net | 158,209 |
9,605 | Deferred income taxes | 7,669 |
67,415 | Goodwill | 69,432 |
79,792 | Intangible assets, net | 87,943 |
14,892 | Other assets | 16,603 |
$ 579,173 | Total assets | $ 584,929 |
Liabilities and stockholders' equity | ||
$ 75,889 | Accounts payable | $ 66,339 |
46,126 | Accrued liabilities | 38,058 |
353 | Current maturities of long-term debt | 352 |
122,368 | Total current liabilities | 104,749 |
974 | Long-term debt | 1,314 |
6,213 | Deferred pension and postretirement benefits | 7,784 |
6,695 | Liability for uncertain tax positions | 8,412 |
10,297 | Non-current environmental reserves | 11,221 |
13,888 | Other liabilities | 14,223 |
160,435 | Total liabilities | 147,703 |
418,738 | Total stockholders' equity | 437,226 |
$ 579,173 | Total liabilities and stockholders' equity | $ 584,929 |
QUANEX BUILDING PRODUCTS CORPORATION | ||
CONSOLIDATED STATEMENTS OF CASH FLOW | ||
(In thousands) | ||
(Unaudited) | ||
Nine Months Ended July 31, | ||
2012 | 2011 | |
Operating activities: | ||
Net income (loss) | $ (17,502) | $ 2,887 |
Loss (income) from discontinued operations | — | 12 |
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities from continuing operations: | ||
Depreciation and amortization | 28,434 | 24,635 |
Restructuring charges | 1,206 | 1,118 |
Deferred income taxes | (9,437) | (295) |
Stock-based compensation | 3,782 | 3,599 |
Changes in assets and liabilities, net of effects from acquisitions and dispositions: | ||
Decrease (increase) in accounts and notes receivable | (7,114) | (4,991) |
Decrease (increase) in inventory | (7,515) | (9,778) |
Decrease (increase) in other current assets | (757) | 244 |
Increase (decrease) in accounts payable | 10,242 | (2,801) |
Increase (decrease) in accrued liabilities | 6,566 | (6,879) |
Increase (decrease) in income taxes | (771) | (1,392) |
Increase (decrease) in deferred pension and postretirement benefits | (1,572) | 965 |
Other, net | 425 | 2,568 |
Cash provided by (used for) operating activities from continuing operations | 5,987 | 9,892 |
Cash provided by (used for) operating activities from discontinued operations | — | (68) |
Cash provided by (used for) operating activities | 5,987 | 9,824 |
Investing activities: | ||
Acquisitions, net of cash acquired | — | (110,845) |
Capital expenditures | (31,710) | (16,969) |
Proceeds from property insurance claim | 479 | — |
Proceeds from executive life insurance | — | 683 |
Other, net | 36 | 75 |
Cash provided by (used for) investing activities from continuing operations | (31,195) | (127,056) |
Cash provided by (used for) investing activities from discontinued operations | — | — |
Cash provided by (used for) investing activities from continuing operations | (31,195) | (127,056) |
Financing activities: | ||
Repayments of long-term debt | (339) | (333) |
Common stock dividends paid | (4,413) | (4,500) |
Purchase of treasury stock | (1,284) | (4,289) |
Issuance of common stock from stock option exercises, including related tax benefits | 2,914 | 1,089 |
Other, net | — | 392 |
Cash provided by (used for) financing activities from continuing operations | (3,122) | (7,641) |
Cash provided by (used for) financing activities from discontinued operations | — | (392) |
Cash provided by (used for) financing activities | (3,122) | (8,033) |
Effect of exchange rate changes on cash and equivalents | 1,003 | 47 |
LESS: (Increase) decrease in cash and equivalents from discontinued operations | — | 460 |
Increase (decrease) in cash and equivalents from continuing operations | (27,327) | (124,758) |
Cash and equivalents at beginning of period | 89,619 | 187,178 |
Cash and equivalents at end of period | $ 62,292 | $ 62,420 |
QUANEX BUILDING PRODUCTS CORPORATION | ||||
INDUSTRY SEGMENT INFORMATION | ||||
(In thousands) | ||||
(Unaudited) | ||||
Three Months Ended July 31, | Nine Months Ended July 31, | |||
2012 | 2011 | 2012 | 2011 | |
Net Sales: | ||||
$134,060 | $124,119 | Engineered Products | $ 342,223 | $ 290,623 |
107,024 | 132,130 | Aluminum Sheet Products | 261,017 | 334,328 |
241,084 | 256,249 | Building Products | 603,240 | 624,951 |
(3,179) | (3,836) | Eliminations | (9,312) | (9,618) |
$237,905 | $252,413 | Net Sales | $ 593,928 | $ 615,333 |
Operating Income (Loss): | ||||
$13,063 | $14,146 | Engineered Products | $ 14,949 | $ 15,411 |
(3,162) | 7,417 | Aluminum Sheet Products | (16,213) | 14,027 |
9,901 | 21,563 | Building Products | (1,264) | 29,438 |
(8,449) | (6,926) | Corporate and Other | (24,667) | (24,752) |
$1,452 | $14,637 | Operating Income (Loss) | $ (25,931) | $ 4,686 |
CONTACT: Financial Contact:Jeff Galow , 713-877-5327 Media Contact:Valerie Calvert , 713-877-5305