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Quanex Building Products Corporation Fiscal Third Quarter 2010 Operating Results

     Earnings From Continuing Operations of $0.27 Per Diluted Share


              Company Outperformed Its Blended End Market


                    $169 Million Cash and Equivalents


                Repurchased $2.2 Million of Common Stock


HOUSTON, Aug. 26, 2010 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) today released fiscal third quarter 2010 results for the period ending July 31. The company reported that operating results at its two business segments -- Engineered Products and Aluminum Sheet Products -- were well ahead of a year ago and were also better than the company's sequential second quarter, despite the weak economy and slowdown in new home starts. Quanex reported that its two operating segments also outperformed their blended end market (residential remodeling and residential new construction) in the quarter.

Third quarter net sales were $225.2 million compared to $164.0 million a year ago. Income from continuing operations was $10.4 million (including an after-tax LIFO expense of $0.6 million) compared to $8.3 million a year ago (including an after-tax LIFO gain of $1.4 million). Diluted earnings per share from continuing operations were $0.27 (including a LIFO expense of $0.02 per diluted share) compared to $0.22 (including a LIFO gain of $0.04 per diluted) in the year ago quarter.

Quarterly Highlights

  --  August J. (Gus) Coppola was promoted to Senior Vice President and will
      lead the company's Project Nexus growth initiative.
  --  Repurchased 125,000 shares ($2.2 million) of common stock.
  --  Operating margins at Engineered Products and Aluminum Sheet Products
      were 13% and 7%, respectively.
  --  Net sales were $225.2 million, up 37% over the year ago quarter, based
      on higher aluminum shipments, market share gains, and an improvement in
      residential remodeling activity.
  --  Consolidated operating income of $16.2 million that included $1.0
      million LIFO expense compared to $12.7 million a year ago that included
      a $2.3 million LIFO gain.
  --  Cash provided by operating activities from continuing operations for the
      nine months ended was $64.2 million compared to $33.2 million in the
      year ago period.
  --  Capital expenditures for the nine months ended were $11.8 million.
  --  Cash and equivalents totaled $168.7 million.


Segment Commentary

Engineered Products is focused on providing OEM window and door customers with value-added fenestration components, products, and systems. Key markets are residential remodeling (approx. 60% of sales) and new residential construction (approx. 40% of sales).

  Engineered Products results (in millions)

                                                   3rd     3rd
                                                   qtr     qtr
                                                   2010    2009
                                                  ------  -----
  Net sales                                       $101.7  $93.4
  Operating income                                 $13.1  $11.5


"For the third quarter, our market drivers -- residential remodeling activity and housing starts -- were estimated to be down 9% on a blended basis compared to a year ago, but our Engineered Products business experienced healthy growth, especially from remodeling activity," said David D. Petratis, president and chief executive officer of Quanex Building Products. "Despite this 9% market decline, sales at Engineered Products grew by 9% from the year ago quarter. Our growth this quarter further illustrates the logic of the segment's continued emphasis to gain share in the more active residential remodeling market. Operating income was up 14% over the year ago quarter, which reflected higher sales and disciplined cost control. While we hired additional employees in the quarter to help us meet customer demand, we will continue to watch our labor situation closely given the slowdown we are beginning to see in the building and construction market," Petratis added.

"We continued to make good progress with our Project Nexus initiative and we now have the leadership team in place to drive the program forward. This quarter, we promoted Gus Coppola, formerly our president of Truseal, to champion the initiative. Gus is forming a strong leadership team and they are quickly getting the sales and marketing teams reorganized," said Petratis.

Aluminum Sheet Products is a leading provider of common alloy aluminum sheet through its Nichols Aluminum operation and primarily serves new residential construction and residential remodeling (approx. 70% of sales) and transportation (approx. 15% of sales) markets.

  Aluminum Sheet Products results (in
   millions)

                          3rd     3rd
                          qtr     qtr
                          2010    2009
                         ------  -----
  Net sales              $127.6  $74.3
  Operating income         $8.9   $3.5
  Shipped pounds             90     65


"Compared to the third quarter of 2009, our shipped pounds were up a very respectable 39% to 90 million pounds, while comparable industry shipments were up 26% over the same period. At these shipment levels, we were sold out in the third quarter, and we expect a repeat of that in the fourth quarter. Nichols Aluminum sales were $128 million, 72% higher than a year ago, due to better shipments and higher average aluminum prices. Our overall aluminum spread (sales less material costs) was up 3% from the year ago quarter but down 4% from the sequential second quarter as the aluminum scrap market remained tight due to the limited presence of industrial scrap, a result of the slowdown in U.S. manufacturing," Petratis said.

Cash Position

"We had a cash balance of $169 million and our total debt outstanding stood at $1.9 million," Petratis continued. "Cash provided by operating activities from continuing operations in the first nine months of 2010 was $64 million. Our $270 million revolving credit facility remains untapped. Possible uses of cash will be to fund our Project Nexus initiative and other organic growth opportunities, fund the common stock dividend, make acquisitions, and repurchase outstanding shares. During the quarter, we repurchased $2.2 million of common stock at an average price of $17.35 per share."

2010 Business Outlook

"Although the U.S. residential building and construction market has remained historically weak all year, our two operating groups have turned in solid performance over the same period. We know programs like the $8,000 first time homebuyers' tax credit, which has now expired, and to a lesser extent, the $1,500 tax credit for energy efficient replacement windows, which expires at year-end, were certainly positives for our industry, but they do create 'pull forward' demand. As a result, we believe second half 2010 residential building demand will be slower than normal and wind down earlier than usual," said Petratis.

"Throughout the year, we remained concerned about the ongoing weakness in the U.S. economy and we shared that concern with investors, employees and customers. Today, we see little reason for optimism in the coming months. Based on current macroeconomics, we believe the residential building and construction market will continue to slow between now and the end of the year. Expressing the slowdown in terms of sales, we are now estimating fourth quarter sales at Engineered Products to be flat compared to the sequential third quarter, and in turn, we tightened our guidance to a range of $32 million to $35 million (from $32 million to $37 million) for their 2010 operating income," continued Petratis.

"Because of ongoing capacity constraints in the aluminum sheet market, our guidance for Nichols Aluminum operating income remains unchanged at $27 million," Petratis said. "Our guidance for the two business segments excludes estimated corporate expenses of $23 million and any impact from LIFO. Estimates for capital expenditures, and depreciation and amortization, are $18 million and $30 million, respectively," concluded Petratis.

Project Nexus

Project Nexus is the company's long term organic growth program that is focused on connecting (Nexus) its Engineered Products Group (EPG) businesses: Mikron, Truseal and Homeshield. The sales and marketing teams of the three EPG businesses, each of which operated independently in the past, have been combined to utilize their capabilities to expand sales opportunities. Nexus activities are focused on the existing customer base that traditionally has been national window and door OEMs, and now includes more diverse regional OEM opportunities. The EPG engineering teams are also working together to develop products and systems that provide customers with the latest innovations in technology and energy efficiency.

Other

The company reported fiscal third quarter 2010 blended market demand (new home starts and remodeling expenditures) was down 9% from the third quarter of 2009. The company calculated the change using data from external sources: The National Association of Home Builders (NAHB) for new home starts and Harvard University's Joint Center for Housing Studies for remodeling expenditures.

Dividend Declared

The Board of Directors declared a quarterly cash dividend of $0.04 per share on the company's common stock, payable September 30, 2010, to shareholders of record on September 15, 2010.

Corporate Profile

Quanex Building Products Corporation is an industry-leading manufacturer of engineered materials, components and systems serving the U.S. residential window and door markets. It is a ROIC-driven company that grows shareholder returns through a combination of organic growth via new products and new programs like Project Nexus, and strategic acquisitions.

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

Financial Statistics as of 7/31/10

Book value per common share: $11.56; Total debt to capitalization: 0.4%; Return on invested capital: 7.1%; Actual number of common shares outstanding: 37,635,316.

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;

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 "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 10-K filing on December 18, 2009, under the Securities Exchange Act of 1934, in particular the section titled, "Private Securities Litigation Reform Act" 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                                   Nine months ended
         July 31,                                              July 31,
  -----------------------                             -------------------------

     2010         2009                                   2010          2009
  -----------  ----------                             -----------  ------------
                             Net Sales:
    $ 101,746    $ 93,352     Engineered Products       $ 259,272     $ 223,419

      127,600      74,254     Aluminum Sheet              326,252       175,419
  -----------  ----------      Products               -----------  ------------
      229,346     167,606      Building Products          585,524       398,838


      (4,143)     (3,629)                                 (9,513)       (8,767)
  -----------  ----------      Eliminations           -----------  ------------


    $ 225,203   $ 163,977                               $ 576,011     $ 390,071
  ===========  ==========       Net Sales             ===========  ============

                             Operating Income (1):
     $ 13,131    $ 11,512     Engineered Products        $ 22,969   $ (155,820)

        8,866       3,467     Aluminum Sheet               19,732      (36,295)
  -----------  ----------      Products               -----------  ------------
       21,997      14,979      Building Products           42,701     (192,115)


      (5,798)     (2,267)      Corporate and Other       (18,976)       (7,535)
  -----------  ----------       (2)                   -----------  ------------


     $ 16,199    $ 12,712       Operating Income         $ 23,725   $ (199,650)
  ===========  ==========        (Loss)               ===========  ============



  ------------------------------------------------------------------------------------------
  (1)  2009 Operating income (loss) reflects non-cash impairment charges
  of $0 and $182,562 (in thousands):


                                                                                  Period Ending July 31,
                                                                                           2009
                                                                                --------------------------

                                                                                Three Months   Nine Months
                                                                                ------------  ------------
                                                                                      (In Thousands)
  Engineered Products                                                             $       --   $ (162,173)

  Aluminum Sheet Products                                                                 --      (20,389)
                                                                                ------------  ------------

    Total impairment loss                                                         $       --   $ (182,562)
                                                                                ============  ============

  (2)  Corporate and Other for the three and nine months ended July 31, 2010
  includes $1.0 million and $2.3 million of LIFO expense while the three and nine months
  ended July 31, 2009 includes $2.3 million and $6.8 million, respectively of
  LIFO income.



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


     Three months ended                                                  Nine months ended
         July 31,                                                             July 31,
  -----------------------                                            -------------------------

     2010         2009                                                  2010          2009
  -----------  ----------                                            -----------  ------------

    $ 225,203   $ 163,977    Net sales                                 $ 576,011     $ 390,071
                             Cost of sales (exclusive of items
      184,799     128,996     shown separately below)                    478,559       340,043
       17,566      14,331    Selling, general and administrative          52,719        42,667
           --          --    Impairment of goodwill and intangibles           --       182,562

        6,639       7,938                                                 21,008        24,449
  -----------  ----------    Depreciation and amortization           -----------  ------------
       16,199      12,712    Operating income (loss)                      23,725     (199,650)
        (106)       (128)    Interest expense                              (333)         (360)

          997          27                                                  2,502           325
  -----------  ----------    Other, net                              -----------  ------------
                             Income (loss) from continuing
                              operations
       17,090      12,611    before income taxes                          25,894     (199,685)

      (6,661)     (4,262)                                                (9,998)        47,788
  -----------  ----------    Income tax benefit (expense)            -----------  ------------

                             Income (loss) from continuing
       10,429       8,349     operations                                  15,896     (151,897)

        (148)       (212)    Income (loss) from discontinued             (1,108)         (525)
  -----------  ----------     operations, net of taxes               -----------  ------------

     $ 10,281     $ 8,137                                               $ 14,788   $ (152,422)
  ===========  ==========    Net income (loss)                       ===========  ============

                             Basic earnings per common share:
                               Earnings (loss) from continuing
       $ 0.28      $ 0.22       operations                                $ 0.43      $ (4.07)

         $ --        $ --      Income (loss) from discontinued          $ (0.03)      $ (0.01)
  -----------  ----------       operations                           -----------  ------------

       $ 0.28      $ 0.22      Basic earnings (loss) per common
  -----------  ----------       share                                     $ 0.40      $ (4.08)

                             Diluted earnings per common share:
                               Earnings (loss) from continuing
       $ 0.27      $ 0.22       operations                                $ 0.42      $ (4.07)

         $ --        $ --      Income (loss) from discontinued          $ (0.03)      $ (0.01)
  -----------  ----------       operations                           -----------  ------------

       $ 0.27      $ 0.22                                                 $ 0.39      $ (4.08)
  -----------  ----------      Diluted earnings (loss) per share     -----------  ------------

                             Weighted average common shares
                              outstanding:
       37,350      37,335      Basic                                      37,349        37,334
       37,983      37,581      Diluted                                    37,882        37,334



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


   July 31,                                 October 31,
     2010                                      2009
  -----------  ---------------------------  -----------
                 Assets
    $ 168,738    Cash and equivalents         $ 123,499
       79,539    Accounts receivable, net        80,171
       54,127    Inventories                     46,515
       12,882    Deferred income taxes           20,611
                 Prepaid and other current
        6,311     assets                          5,177

                 Current assets of
           47     discontinued operations           232
  -----------  ---------------------------  -----------
      321,644       Total current assets        276,205
                 Property, plant and
      135,223     equipment, net                141,286
       34,321    Deferred income taxes           42,923
       25,189    Goodwill                        25,189
       45,444    Intangible assets, net          47,359
       17,007    Other assets                     9,114

                 Assets of discontinued
           --     operations                      1,524
  -----------  ---------------------------  -----------

    $ 578,828       Total assets              $ 543,600
  ===========  ===========================  ===========
                 Liabilities and
                  stockholders' equity
     $ 74,205    Accounts payable              $ 67,010
       35,485    Accrued liabilities             30,320
                 Current maturities of
          327     long-term debt                    323

                 Current liabilities of
           16     discontinued operations             9
  -----------  ---------------------------  -----------
                    Total current
      110,033        liabilities                 97,662
        1,620    Long-term debt                   1,943
                 Deferred pension and
        3,948     postretirement benefits         6,655
                 Non-current environmental
       12,027     reserves                        1,767

       16,208    Other liabilities               13,047
  -----------  ---------------------------  -----------
      143,836       Total liabilities           121,074

                    Total stockholders'
      434,992        equity                     422,526
  -----------  ---------------------------  -----------

                    Total liabilities and
    $ 578,828        stockholders' equity     $ 543,600
  ===========  ===========================  ===========



  QUANEX BUILDING PRODUCTS CORPORATION
  CONSOLIDATED STATEMENTS OF CASH FLOW
  (In thousands)
  (Unaudited)


                                               Nine months ended
                                                    July 31,
                                           -------------------------

                                              2010          2009
                                           -----------  ------------
  Operating activities:
    Net income (loss)                         $ 14,788   $ (152,422)
    (Income) loss from discontinued
     operations                                  1,108           525
                                           -----------  ------------
    Income (loss) from continuing
     operations                                 15,896     (151,897)
    Adjustments to reconcile net income
     (loss) to cash provided by
    operating activities:
      Depreciation and amortization             21,060        24,500
      Gain on bargain purchase                 (1,272)            --
      Impairment of goodwill and
       intangibles                                  --       182,562
      Deferred income taxes                      6,524      (30,497)

      Stock-based compensation                   3,218         2,328
                                           -----------  ------------
                                                45,426        26,996
    Changes in assets and liabilities,
     net of effects from
    acquisitions and dispositions:
      Decrease (Increase) in accounts
       receivable                                1,601        28,113
      Decrease (Increase) in inventory         (5,788)        23,762
      Decrease (Increase) in other
       current assets                            (889)         (105)
      Increase (Decrease) in accounts
       payable                                   7,961      (25,505)
      Increase (Decrease) in accrued
       liabilities                               5,084       (6,799)
      Increase (Decrease) in income taxes
       payable                                  11,934      (18,726)
      Increase (Decrease) in deferred
       pension and postretirement
       benefits                                (2,706)         2,201

       Other, net                                1,533         3,295
                                           -----------  ------------
    Cash provided by (used for) operating
     activities from
    continuing operations                       64,156        33,232
    Cash provided by (used for) operating
     activities from
    discontinued operations                      (415)         (609)
                                           -----------  ------------
  Cash provided by (used for) operating
   activities                                   63,741        32,623
                                           -----------  ------------
  Investing activities:
    Acquisitions, net of cash acquired         (1,590)            --
    Capital expenditures                      (11,779)      (12,357)
    Proceeds from property insurance
     claims                                        392         1,000

    Other, net                                      40            --
                                           -----------  ------------
    Cash provided by (used for) investing
     activities from
    continuing operations                     (12,937)      (11,357)
    Cash provided by (used for) investing
     activities from
    discontinued operations                         90         (456)
                                           -----------  ------------
  Cash provided by (used for) investing
   activities                                 (12,847)      (11,813)
                                           -----------  ------------
  Financing activities:
    Repayments of long-term debt                 (319)         (361)
    Common stock dividends paid                (3,775)       (3,390)
    Issuance of common stock from stock
     option exercises, including related
     tax benefits                                  495            --
    Funding from Separation                         --        15,401
    Purchase of treasury stock                 (2,169)            --

    Other, net                                   (235)         (675)
                                           -----------  ------------
    Cash provided by (used for) financing
     activities from
    continuing operations                      (6,003)        10,975
    Cash provided by (used for) financing
     activities from
    discontinued operations                        235           665
                                           -----------  ------------
  Cash provided by (used for) financing
   activities                                  (5,768)        11,640
                                           -----------  ------------
    Effect of exchange rate changes on
     cash and equivalents                           23            33
  LESS: (Increase) Decrease in cash and
   equivalents from
  discontinued operations                           90           400
                                           -----------  ------------
  Increase (Decrease) in cash and
   equivalents from continuing operations       45,239        32,883
  Beginning of period cash and
   equivalents                                 123,499        66,871
                                           -----------  ------------

  End of period cash and equivalents         $ 168,738      $ 99,754
                                           ===========  ============

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

SOURCE: Quanex Building Products Corporation

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