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Quanex Building Products Corporation Fiscal Fourth Quarter and Fiscal 2008 Results

4th Quarter EPS From Continuing Operations of $0.32 Before a LIFO Gain
Company's Sales Outperformed the Market for the Quarter and Year
$65 Million Cash and Equivalents Less Debt

HOUSTON, Dec. 4, 2008 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) today reported fiscal fourth quarter and fiscal 2008 results for the period ending October 31, 2008. Income from continuing operations for the quarter and year were $11.9 million and $30.8 million, respectively, and diluted earnings per share from continuing operations for the quarter and year were $0.32 and $0.80, respectively, before spinoff related costs and LIFO impact.

Including spinoff related costs and LIFO impact, income from continuing operations for the quarter and year were $15.0 million and $15.9 million, respectively, and diluted earnings per share from continuing operations for the quarter and year were $0.40 and $0.41, respectively.

Fiscal Fourth Quarter and Fiscal 2008 Highlights

* David D. Petratis, the company's president and chief executive officer, assumed the additional role of chairman of the board upon the planned retirement of Raymond A. Jean, effective December 5.
* Jairaj T. Chetnani joined the company as vice president and treasurer effective December 1.
* Net sales in the quarter were $246.3 million versus $255.5 million in the year ago quarter. 2008 net sales were $868.9 million compared to $964 million in 2007.
* Cash provided by operating activities from continuing operations in 2008 was $53 million.
* Capital expenditures for the fiscal year were $15.8 million.
* Cash and equivalents less debt totaled $65 million at year end.
* LIFO transactions: recorded a fourth quarter LIFO gain of $5.1 million ($3.1 million after tax, $0.08 per diluted share). For 2008, recorded a LIFO charge of $0.4 million ($0.2 million after tax, $0.01 per diluted share). LIFO activity in 2008 was primarily associated with the aluminum sheet business.
* Spinoff related costs: recorded fiscal 2008 costs of $26.5 million ($14.7 million after tax, $0.38 per diluted share).

Fiscal Fourth Quarter and Fiscal 2008 Commentary



 ENGINEERED PRODUCTS ($ in millions)
                                  4th qtr  4th qtr    FY        FY
                                   2008     2007     2008      2007
                                  -------  -------  -------  -------
 Net Sales                        $ 112.9  $ 123.9  $ 407.9  $ 457.8
 Operating Inc.                   $  10.1  $  13.2  $  29.9  $  43.8

Engineered Products is focused on providing window and door customers with value-added fenestration products and components. Key market drivers are housing starts and remodeling activity.

"The U.S. housing market deteriorated 35% in our fiscal fourth quarter compared to the year ago quarter, and starts for fiscal 2008 were off 31% compared to a year ago. Residential remodeling activity was estimated to be down 10% in fiscal 2008 compared to last year. Net sales for the quarter and year at our Engineered Products segment were down 9% and 11%, respectively. Our ability to consistently outperform the market, even in this very tough economic environment, is testimony to the market-leading positions our customers hold in the window and door industry, and importantly, our collaboration with them on new product and program initiatives," said David D. Petratis, president and chief executive officer of Quanex Building Products. "We believe Engineered Products has one of the best combinations of engineering and design support, innovative products and components, and logistical support in the industry, all backed by the considerable financial strength of Quanex Building Products," continued Petratis.



 ALUMINUM SHEET PRODUCTS (in millions)
                                  4th qtr  4th qtr    FY        FY
                                   2008     2007     2008      2007
                                  -------  -------  -------  -------
 Net Sales                        $ 139.0  $ 136.1  $ 479.9  $ 524.2
 Operating Inc.                   $  12.6  $  18.3  $  40.3  $  65.7
 Shipped pounds                        81       84      285      311

Aluminum Sheet Products is a leading provider of common alloy aluminum sheet products for the building and construction, transportation and other consumer durable markets. Key market drivers are housing starts and remodeling activity, which together represent about 65% of the segment's sales.

"Shipments at Nichols Aluminum were approximately 81 million pounds in the quarter, down 4% from the year ago quarter. 2008 shipments of 285 million pounds were off 8% from last year. Spread per pound (selling price less material cost) was down 5% from both the fourth quarter 2007 and third quarter of 2008. We were pleased with the spread at Nichols, however, reduced shipments and a lower mix of painted sheet hurt their bottom line," Petratis said.

Cash Flow

"Our cash and equivalents less debt at year end were $65 million. We have one remaining favorable cash true-up item for taxes related to the merger of Quanex Corporation with Gerdau S.A. We currently estimate the true-up to be $15 million, down from the original estimate of $20 million as the various tax returns near completion. We expect to receive this cash in the first calendar quarter of 2009. Operating cash flow from continuing operations in 2008 came in at $53 million. We continue to closely monitor our working capital, and at quarter end, our conversion cycle, the time required to convert a customer order to cash, was approximately 31 days," continued Petratis.

Outlook

The company's fiscal first quarter segment operating income has historically been its lowest when compared to the other quarters of the year as there are fewer production days and a marked decline in residential building and remodeling activity during this time. This seasonality will be exacerbated given today's weak economic conditions. First quarter 2009 expectations indicate the company will report an operating loss of between $7 million to $11 million before taking into account approximately $5.5 million of corporate expenses (excluding any LIFO impact). The majority of the loss is expected to come from Aluminum Sheet Products due to significantly lower shipments and a deteriorating spread. As in most years, the company expects to report improved operating results each sequential quarter of fiscal 2009.

While the company expects to continue to outperform the market, the overall economic volatility and the ongoing uncertainty surrounding 2009 housing starts and residential remodeling activity does not allow it to reasonably predict fiscal 2009 operating income at this time. However, the company does expect to be profitable for the year. The company will continue to monitor and analyze ongoing economic changes and the impact those changes will have on its operating performance throughout the year. Estimates for fiscal 2009 depreciation / amortization, and capital expenditures are $35 million and $18 million, respectively.

Non-GAAP Financial Measures

Income from Continuing Operations Before Spinoff Related Costs and LIFO Impact

Income from continuing operations before spinoff related costs and LIFO impact is a non-GAAP financial measure. The company believes this non-GAAP financial measure provides a consistent basis for comparison between quarters and years, and enhances the understanding of the performance of its operations as they are not influenced by certain costs incurred during the periods that are believed to be special and related to specific, infrequent items.

Set forth below is a reconciliation of reported income from continuing operations and reported diluted earnings per share from continuing operations to income from continuing operations before spinoff related costs and LIFO impact and diluted earnings per share from continuing operations before spinoff related costs and LIFO impact. The company does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.



               Three months ended Oct. 31, Twelve months ended Oct. 31,
 ---------------------------------------------------------------------
 (in millions except
 diluted EPS)       2008          2007          2008          2007
                -------------------------------------------------------
                 Net   Diluted  Net  Diluted  Net  Diluted  Net  Diluted
                Income  EPS   Income  EPS   Income  EPS   Income  EPS
                ------------- ------------- ------------- -------------

 Income from
  continuing
  operations,
  as reported    $15.0  $0.40  $17.6  $0.44  $15.9  $0.41  $57.1  $1.45

 LIFO charge
  (income)        (3.1) (0.08)  (0.3)    --    0.2   0.01   (0.8) (0.03)

 After-tax
  reconciling
  items
  associated
  with the
  company's
  spinoff:

   Stock based
    compensation
    expense         --     --     --     --   13.7   0.36     --     --
   Transaction
    costs           --     --     --     --    2.9   0.08     --     --
   Executive
    incentives
    & other
    benefits        --     --     --     --    0.5     --     --     --
                ------------- ------------- ------------- -------------
   Selling,
    general &
    administrative
    expense         --     --     --     --   17.1   0.44     --     --
   Rabbi trust
    merger
    consideration   --     --     --     --   (2.4) (0.06)    --     --
                ------------- ------------- ------------- -------------
   Total
    after-tax
    spinoff
    related
    costs           --     --     --     --   14.7   0.38     --     --
                ------------- ------------- ------------- -------------

 Income from
  continuing
  operations,
  excluding
  LIFO &
  spinoff
  related
  costs          $11.9  $0.32  $17.3  $0.44  $30.8  $0.80  $56.3  $1.42

                 ============  ============  ============  ============

 Diluted
  weighted
  average
  common
  shares
  outstanding
  (in
  thousands)           37,466        39,703        38,528        39,509

Dividend Declared

The Board of Directors declared a quarterly cash dividend of $0.03 per share on the company's common stock, payable December 31, 2008, to shareholders of record on December 18, 2008.

Corporate Profile

Quanex Building Products Corporation is an industry-leading manufacturer of value-added, engineered materials and components serving the building products markets. It is an ROIC-driven company that grows shareholder returns through a combination of organic growth via new products and programs and strategic acquisitions.

The Quanex Building Products Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=1117

Financial Statistics as of 10/31/08

Book value per common share: $14.55; Total debt to capitalization: 0.5%; Actual number of common shares outstanding: 37,657,891

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;

Operating margin - combined operating income of aluminum sheet products and engineered products divided by combined net sales.

Statements that use the words "expect," "should," "believe," "will," "might," or similar words reflecting future expectations or beliefs are forward-looking statements. The statements found above are based on current expectations. Actual results or events may differ materially from this release. Factors that could impact future results may include, without limitation, the effect of both domestic and global economic conditions, the impact of competitive products and pricing, and the availability and cost of raw materials. For a more complete discussion of factors that may affect the company's future performance, please refer to the company's Registration Statement on Form 10, filed with the SEC on April 4, 2008 pursuant to the Securities Exchange Act of 1934, in particular the section titled, "Special Note About Forward-Looking Statements" contained therein.

For additional information, visit the company's website at www.quanex.com.



 QUANEX BUILDING PRODUCTS CORPORATION
 INDUSTRY SEGMENT INFORMATION
 (In thousands)
 (Unaudited)

 Three months ended                               Twelve months ended
    October 31,                                        October 31,
 ------------------                                ------------------
   2008      2007                                    2008      2007
 --------  --------                                --------  --------
                     Net sales:

 $112,866  $123,866  Engineered Products           $407,896  $457,764

  139,037   136,123  Aluminum Sheet Products        479,925   524,215
 --------  --------                                --------  --------
  251,903   259,989     Building Products           887,821   981,979

   (5,558)   (4,463)    Eliminations                (18,888)  (18,005)
 --------  --------                                --------  --------

 $246,345  $255,526         Net sales              $868,933  $963,974
 ========  ========                                ========  ========

                     Operating income:

 $ 10,101  $ 13,220  Engineered Products           $ 29,881  $ 43,815

   12,565    18,330  Aluminum Sheet Products         40,260    65,732
 --------  --------                                --------  --------
   22,666    31,550     Building Products            70,141   109,547

    1,332    (4,152)     *Corporate and Other       (49,160)  (21,378)
 --------  --------                                --------  --------

 $ 23,998  $ 27,398       *Operating Income (Loss) $ 20,981  $ 88,169
 ========  ========                                ========  ========

 ------------------

 * Corporate and Other and Operating Income for the three and twelve
 months ended October 31, 2008 include $5.1 million LIFO income and
 $0.4 million LIFO expense, respectively. In addition, Corporate and
 Other and Operating Income for the twelve months ended October 31,
 2008 include $26.5 million of special charges associated with the
 spin-off / merger transaction which predominantly occurred in the
 second quarter of 2008.


 QUANEX BUILDING PRODUCTS CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
 (In thousands, except per share data)
 (Unaudited)

 Three months ended                               Twelve months ended
    October 31,                                        October 31,
 ------------------                                ------------------
   2008      2007                                    2008      2007
 --------  --------                                --------  --------

 $246,345  $255,526  Net sales                     $868,933  $963,974
                     Cost of sales (exclusive of
                      items shown separately
  199,080   201,389   below)                        717,376   767,138
                     Selling, general and admini-
   14,822    16,325   strative expense               95,504    70,676
    8,445    10,414  Depreciation and amortization   35,072    37,991
 --------  --------                                --------  --------
   23,998    27,398  Operating income (loss)         20,981    88,169
     (124)     (139) Interest expense                  (480)     (591)
      312       124  Other, net                       5,188       383
 --------  --------                                --------  --------
                     Income (loss) from
                      continuing operations
   24,186    27,383   before income taxes            25,689    87,961

   (9,176)   (9,774) Income tax expense              (9,785)  (30,830)
 --------  --------                                --------  --------
                     Income (loss) from
   15,010    17,609   continuing operations         15,904    57,131
                     Income (loss) from
                      discontinued operations,
       --    24,470   net of taxes                    5,675    77,491
 --------  --------                                --------  --------
 $ 15,010  $ 42,079  Net income (loss)             $ 21,579  $134,622
 ========  ========                                ========  ========

                     Basic earnings per common
                      share:
                      Earnings (loss) from
 $   0.40  $   0.47    continuing operations       $   0.43  $   1.54

                      Income (loss) from
 $     --  $   0.66    discontinued operations     $   0.15  $   2.10
 --------  --------                                --------  --------
                     Basic earnings (loss) per
 $   0.40  $   1.13   common share                 $   0.58  $   3.64
 --------  --------                                --------  --------

                     Diluted earnings per common
                      share:
                     Earnings (loss) from
 $   0.40  $   0.44   continuing operations        $   0.41  $   1.45
                     Income (loss) from
 $     --  $   0.62   discontinued operations      $   0.15  $   1.96
 --------  --------                                --------  --------
                     Diluted earnings (loss) per
 $   0.40  $   1.06   share                        $   0.56  $   3.41
 --------  --------                                --------  --------

                     Weighted average common
                      shares outstanding:
   37,333    37,075    Basic                         37,274    36,982
   37,466    39,703    Diluted                       38,528    39,509


 QUANEX BUILDING PRODUCTS CORPORATION
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 (Unaudited)

 October 31,                                               October 31,
    2008                                                      2007
 ---------------------------------------------------------------------
             Assets

 $   67,413  Cash and equivalents                           $    1,778
    101,211  Accounts and notes receivable, net                 80,095
     63,848  Inventories, net                                   53,556
     10,932  Deferred income taxes                               5,370
      6,239  Other current assets                                4,372
         --  Current assets of discontinued operations         431,326
 ----------  ---------------------------------------------  ----------
    249,643     Total current assets                           576,497
    157,389  Property, plant and equipment, net                173,590
      3,875  Deferred income taxes                                  --
    196,338  Goodwill                                          196,385
     62,476  Intangible assets, net                             68,199
     11,126  Other assets                                        9,225
         --  Assets of discontinued operations                 310,926
 ----------  ---------------------------------------------  ----------
 $  680,847     Total assets                                $1,334,822
 ==========  =============================================  ==========
             Liabilities and stockholders' equity

 $   79,512  Accounts payable                               $   68,167
     38,316  Accrued liabilities                                37,102
         --  Income taxes payable                                   --
        363  Current maturities of long-term debt                1,464
         --  Current liabilities of discontinued operations    242,570
 ----------  ---------------------------------------------  ----------
    118,191     Total current liabilities                      349,303
      2,188  Long-term debt                                      2,551
         --  Deferred income taxes                              34,457
      2,485  Non-current environmental reserves                  4,239
     10,155  Other liabilities                                  13,889
         --  Liabilities of discontinued operations             47,234
 ----------  ---------------------------------------------  ----------
    133,019     Total liabilities                              451,673

    547,828     Total stockholders' equity                     883,149
 ----------  ---------------------------------------------  ----------
 $  680,847     Total liabilities and stockholders' equity  $1,334,822
 ==========  =============================================  ==========


 QUANEX BUILDING PRODUCTS CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOW
 (In thousands)
 (Unaudited)
                                                 Twelve months ended
                                                     October 31,
                                                  2008         2007
                                                --------     --------
 Operating activities:
  Net income                                    $ 21,579     $134,622
  Income from discontinued operations             (5,675)     (77,491)
                                                --------     --------
  Net income from continuing operations           15,904       57,131
  Adjustments to reconcile net income to
   cash provided by operating activities:
   Depreciation and amortization                  35,111       38,000
   Deferred income taxes                           2,984          796
   Stock-based compensation                       26,378        4,925
                                                --------     --------
                                                  80,377      100,852
  Changes in assets and liabilities, net
   of effects from acquisitions,
   dispositions and the Separation:
   Decrease (Increase) in accounts and notes
    receivable                                   (21,495)      (1,140)
   Decrease (Increase) in inventory              (10,398)       2,012
   Decrease (Increase) in other current assets      (390)         177
   Increase (Decrease) in accounts payable        11,406         (868)
   Increase (Decrease) in accrued liabilities     (3,285)      (2,356)
   Increase (Decrease) in income taxes payable     1,088         (736)
   Increase (Decrease) in deferred pension and
    postretirement benefits                       (2,515)       2,851
   Other, net                                     (1,824)       3,518
                                                --------     --------
  Cash provided by (used for) operating
   activities from continuing operations          52,964      104,310
  Cash provided by (used for) operating
   activities from discontinued operations        25,127      119,764
                                                --------     --------
 Cash provided by (used for) operating
  activities                                      78,091      224,074
                                                --------     --------
 Investing activities:
  Capital expenditures, net of retirements       (15,815)     (15,904)
  Other, net                                         (23)          --
                                                --------     --------
   Cash provided by (used for) investing
    activities from continuing operations        (15,838)     (15,904)
   Cash provided by (used for) investing
    activities from discontinued operations       34,113     (121,070)
                                                --------     --------
 Cash provided by (used for) investing
  activities                                      18,275     (136,974)
                                                --------     --------
 Financing activities:
  Repayments of long-term debt                    (1,464)      (2,721)
  Common dividends paid                           (2,258)          --
  Funding from Separation                         32,735           --
  Transfers to Quanex Corporation                     --      (86,312)
  Other, net                                        (302)          --
                                                --------     --------
   Cash provided by (used for) financing
    activities from continuing operations         28,711      (89,033)
   Cash provided by (used for) financing
    activities from discontinued operations      (46,183)      68,906
                                                --------     --------
 Cash provided by (used for) financing
  activities                                     (17,472)     (20,127)
                                                --------     --------
  Effect of exchange rate changes on cash
   and equivalents                                  (202)         158
 LESS: (Increase) Decrease in cash and
  equivalents from discontinued operations       (13,057)     (67,600)
                                                --------     --------
 Increase (Decrease) in cash and equivalents
  from continuing operations                      65,635         (469)
 Beginning of period cash and equivalents          1,778        2,247
                                                --------     --------
 End of period cash and equivalents             $ 67,413     $  1,778
                                                ========     ========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Quanex Building Products Corporation

Quanex Building Products Corporation
Financial Contact:
Jeff Galow
713-877-5327
Media Contact:
Valerie Calvert
713-877-5305

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