Quanex Building Products Announces Second Quarter 2024 Results and Reaffirms Full Year 2024 Guidance
Margin Expansion in
Repaid
Tyman Acquisition Expected to Close in 2H24
The Company reported the following selected financial results:
Three Months Ended |
Six Months Ended |
||||||
($ in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||
Gross Margin | |||||||
Gross Margin % | 24.9% | 24.6% | 23.3% | 22.2% | |||
Net Income | |||||||
Diluted EPS | |||||||
Adjusted Net Income | |||||||
Adjusted Diluted EPS | |||||||
Adjusted EBITDA | |||||||
Adjusted EBITDA Margin % | 15.0% | 14.6% | 11.7% | 11.3% | |||
Cash Provided by Operating Activities | |||||||
Free Cash Flow |
(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and reconciliation tables for additional information)
Second Quarter 2024 Results Summary
Quanex reported net sales of
The increase in adjusted earnings for the three months ended
Balance Sheet Update
As of
Outlook
*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.
Recent Events
As previously disclosed on
Conference Call and Webcast Information
The Company has also scheduled a conference call for
Participants can pre-register for the conference call using the following link: https://register.vevent.com/register/BI8e90696b55d04353a1f5e63939f8a6f6
Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, it is recommended that participants dial into the conference call ten minutes ahead of the scheduled start time. A replay will be available for a limited time on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.
About Quanex
Quanex is a global manufacturer with core capabilities and broad applications across various end markets. The Company currently collaborates and partners with leading OEMs to provide innovative solutions in the window, door, vinyl fencing, solar, refrigeration, custom mixing and cabinetry markets. Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.
For more information contact
Non-GAAP Terminology Definitions and Disclaimers
Adjusted Net Income (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), Adjusted EBITDA and LTM 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. Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less 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 uses the Free Cash Flow metric to measure operational and cash management performance and assist with financial decision-making. Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of the Company’s residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company’s financial and cash management performance.
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
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, timing estimates or any other expectations related to the Acquisition, 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
Important Additional Information will be Filed with the
In connection with the Acquisition, Quanex filed with the
No Offer or Solicitation
The information contained in this press release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this press release is not an offer of securities for sale into
This press release does not constitute a prospectus or a prospectus exempted document.
Participants in the Solicitation
Quanex and certain of its directors and executive officers and employees may be considered participants in the solicitation of proxies from the stockholders of Quanex in respect of the Acquisition, including the share issuance proposal. Information regarding the persons who may, under the rules of the
The Acquisition referred to in the paragraph entitled “Recent Events” above is governed by the
Quanex Profit Forecast
The following statement in this press release (the “Quanex Profit Forecast”) constitutes an ordinary course profit forecast for the purposes of Rule 28.1(a) and Note 2(b) on Rule 28.1 of the
“As expected, we are starting to see a seasonal uptick in the demand for our products in
*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.”
References to “GAAP” in the Quanex Profit Forecast are to
Basis of preparation
The Quanex Profit Forecast has been prepared on a basis consistent with Quanex’s accounting policies, as set out in the paragraph entitled “Non-GAAP Terminology Definitions and Disclaimers”.
The Quanex Profit Forecast excludes any transaction costs applicable to the Acquisition or any other associated accounting impacts as a direct result of the Acquisition.
Assumptions
The Quanex Profit Forecast is based on the assumptions listed below, any of which could turn out to be incorrect and therefore affect the validity of the Quanex Profit Forecast.
- There are no material changes to the prevailing macroeconomic or political conditions in the markets and regions in which the Quanex group operates.
- There will be no material changes to the conditions of the markets and regions in which the Quanex group operates or in relation to customer sales volume or product mix or the behaviour of competitors in those markets and regions.
- There are no material changes to the Quanex group’s cost base throughout the fiscal year.
- There will be no material changes in foreign exchange rates that will have a significant impact on the Quanex group’s revenue or cost base.
- The interest, inflation and tax rates in the markets and regions in which the Quanex group operates will remain materially unchanged from the prevailing rates.
- There will be no business disruptions that materially affect the Quanex group or its key customers, including natural disasters, acts of terrorism, cyber-attack and/or technological issues or supply chain disruptions.
- There will be no material changes in legislation or regulatory requirements impacting on the Quanex group’s operations or on its accounting policies.
- There will be no material litigation in relation to any of the Quanex group’s operations.
- The Acquisition will not result in any material changes to the Quanex group’s obligations to customers.
- The Acquisition will not have any material impact on the Quanex group’s ability to negotiate new business.
- There will be no material change to the present executive management of the Quanex group.
- There will be no material change in the operational strategy of the Quanex group.
- There will be no material acquisitions or disposals in the relevant period.
- There will be no material strategic investments in the relevant period.
- There will be no material change in the dividend or capital policies of the Quanex group.
- The Quanex Profit Forecast does not include any impact on the Quanex group of the Acquisition.
Other important factors and information are contained in Quanex’s most recent Annual Report on Form 10-K, including the risks summarised in the section entitled “Risk Factors”, Quanex’s most recent Quarterly Report on Form 10-Q, and Quanex’s other periodic filings with the
Quanex Directors’ confirmation
With the consent of Tyman, the
The Quanex Directors have considered the Quanex Profit Forecast and confirm that it has been properly compiled on the basis of the assumptions set out in this release and that the basis of the accounting used is consistent with Quanex’s accounting policies.
No Profit Forecasts or Estimates
The Quanex Profit Forecast is a profit forecast for the purposes of Rule 28 of the
Other than in respect of the Quanex Profit Forecast, no statement in this release is intended as, or is to be construed as, a profit forecast or profit estimate for any period and no statement in this release should be interpreted to mean that earnings or earnings per unit of common stock for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per unit of common stock.
For the purposes of Rule 28 of the
Publication on Website
A copy of this release will be made available on Quanex’s website at https://www.roadto2b.com/ by no later than 12 noon (
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net sales | $ | 266,201 | $ | 273,535 | $ | 505,356 | $ | 535,451 | ||||||||
Cost of sales | 199,963 | 206,372 | 387,686 | 416,521 | ||||||||||||
Selling, general and administrative | 34,707 | 27,371 | 67,070 | 64,115 | ||||||||||||
Depreciation and amortization | 10,894 | 10,456 | 22,046 | 21,076 | ||||||||||||
Operating income | 20,637 | 29,336 | 28,554 | 33,739 | ||||||||||||
Interest expense | (950 | ) | (2,244 | ) | (2,018 | ) | (4,503 | ) | ||||||||
Other, net | 4 | (29 | ) | 1,046 | 189 | |||||||||||
Income before income taxes | 19,691 | 27,063 | 27,582 | 29,425 | ||||||||||||
Income tax expense | (4,314 | ) | (5,551 | ) | (5,956 | ) | (6,004 | ) | ||||||||
Net income | $ | 15,377 | $ | 21,512 | $ | 21,626 | $ | 23,421 | ||||||||
Earnings per common share, basic | $ | 0.47 | $ | 0.65 | $ | 0.66 | $ | 0.71 | ||||||||
Earnings per common share, diluted | $ | 0.46 | $ | 0.65 | $ | 0.65 | $ | 0.71 | ||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 32,870 | 32,858 | 32,847 | 32,905 | ||||||||||||
Diluted | 33,103 | 33,017 | 33,076 | 33,070 | ||||||||||||
Cash dividends per share | $ | 0.08 | $ | 0.08 | $ | 0.16 | $ | 0.16 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 56,149 | $ | 58,474 | ||||
Accounts receivable, net | 87,078 | 97,311 | ||||||
Inventories | 101,446 | 97,959 | ||||||
Income taxes receivable | 6,054 | 8,298 | ||||||
Prepaid and other current assets | 12,776 | 11,558 | ||||||
Total current assets | 263,503 | 273,600 | ||||||
Property, plant and equipment, net | 252,857 | 250,664 | ||||||
Operating lease right-of-use assets | 65,019 | 46,620 | ||||||
184,481 | 182,956 | |||||||
Intangible assets, net | 68,667 | 74,115 | ||||||
Other assets | 2,686 | 3,188 | ||||||
Total assets | $ | 837,213 | $ | 831,143 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 60,615 | $ | 74,371 | ||||
Accrued liabilities | 48,851 | 50,319 | ||||||
Income taxes payable | - | 384 | ||||||
Current maturities of long-term debt | 2,632 | 2,365 | ||||||
Current operating lease liabilities | 6,433 | 7,224 | ||||||
Total current liabilities | 118,531 | 134,663 | ||||||
Long-term debt | 51,549 | 66,435 | ||||||
Noncurrent operating lease liabilities | 59,965 | 40,361 | ||||||
Deferred income taxes | 29,280 | 29,133 | ||||||
Other liabilities | 11,766 | 14,997 | ||||||
Total liabilities | 271,091 | 285,589 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 371 | 372 | ||||||
Additional paid-in-capital | 249,502 | 251,576 | ||||||
Retained earnings | 425,650 | 409,318 | ||||||
Accumulated other comprehensive loss | (34,631 | ) | (38,141 | ) | ||||
(74,770 | ) | (77,571 | ) | |||||
Total stockholders’ equity | 566,122 | 545,554 | ||||||
Total liabilities and stockholders' equity | $ | 837,213 | $ | 831,143 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
Six Months Ended |
|||||||
2024 | 2023 | ||||||
Operating activities: | |||||||
Net income | $ | 21,626 | $ | 23,421 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and amortization | 22,046 | 21,076 | |||||
Stock-based compensation | 1,365 | 1,398 | |||||
Deferred income tax | (155 | ) | 97 | ||||
Other, net | 162 | 982 | |||||
Changes in assets and liabilities: | |||||||
Decrease in accounts receivable | 10,832 | 11,564 | |||||
(Increase) decrease in inventory | (3,008 | ) | 14,799 | ||||
Increase in other current assets | (1,124 | ) | (1,746 | ) | |||
Decrease in accounts payable | (12,619 | ) | (19,825 | ) | |||
Decrease in accrued liabilities | (4,602 | ) | (14,407 | ) | |||
Increase (decrease) in income taxes payable | 1,856 | (1,754 | ) | ||||
Increase in deferred pension benefits | - | 17 | |||||
Increase in other long-term liabilities | 9 | 1,808 | |||||
Other, net | 557 | 1,030 | |||||
Cash provided by operating activities | 36,945 | 38,460 | |||||
Investing activities: | |||||||
Business acquisition | - | (91,302 | ) | ||||
Capital expenditures | (17,183 | ) | (15,074 | ) | |||
Proceeds from disposition of capital assets | 93 | 101 | |||||
Cash used for investing activities | (17,090 | ) | (106,275 | ) | |||
Financing activities: | |||||||
Borrowings under credit facilities | - | 102,000 | |||||
Repayments of credit facility borrowings | (15,000 | ) | (35,000 | ) | |||
Repayments of other long-term debt | (954 | ) | (1,306 | ) | |||
Common stock dividends paid | (5,294 | ) | (5,320 | ) | |||
Issuance of common stock | 554 | 99 | |||||
Payroll tax paid to settle shares forfeited upon vesting of stock | (1,193 | ) | (567 | ) | |||
Purchase of treasury stock | - | (5,593 | ) | ||||
Cash (used for) provided by financing activities | (21,887 | ) | 54,313 | ||||
Effect of exchange rate changes on cash and cash equivalents | (293 | ) | 1,905 | ||||
Decrease in cash and cash equivalents | (2,325 | ) | (11,597 | ) | |||
Cash and cash equivalents at beginning of period | 58,474 | 55,093 | |||||
Cash and cash equivalents at end of period | $ | 56,149 | $ | 43,496 | |||
FREE CASH FLOW AND NET DEBT 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 |
Six Months Ended |
||||||
2024 | 2023 | 2024 | 2023 | ||||
Cash provided by operating activities | |||||||
Capital expenditures | (7,603) | (7,492) | (17,183) | (15,074) | |||
Free Cash Flow | |||||||
The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash. | |||||||
As of |
|||||||
2024 | 2023 | ||||||
Revolving credit facility | |||||||
Finance lease obligations(1) | 55,217 | 55,626 | |||||
Total debt(2) | 55,217 | 135,626 | |||||
Less: Cash and cash equivalents | 56,149 | 43,496 | |||||
Net Debt | ( |
||||||
(1) Includes |
|||||||
(2) Excludes outstanding letters of credit. | |||||||
NON-GAAP FINANCIAL MEASURE DISCLOSURE | ||||||||||||||||||||
LAST TWELVE MONTHS ADJUSTED EBITDA RECONCILIATION | ||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Reconciliation of Last Twelve Months Adjusted EBITDA | Three Months Ended |
Three Months Ended |
Three Months Ended |
Three Months Ended |
Total | |||||||||||||||
Reconciliation | Reconciliation | Reconciliation | Reconciliation | Reconciliation | ||||||||||||||||
Net income as reported | $ | 15,377 | $ | 6,249 | $ | 27,382 | $ | 31,698 | $ | 80,706 | ||||||||||
Income tax expense | 4,314 | 1,642 | 4,442 | 4,099 | 14,497 | |||||||||||||||
Other, net | (4 | ) | (1,042 | ) | 6,110 | (402 | ) | 4,662 | ||||||||||||
Interest expense | 950 | 1,068 | 1,565 | 2,068 | 5,651 | |||||||||||||||
Depreciation and amortization | 10,894 | 11,152 | 11,194 | 10,596 | 43,836 | |||||||||||||||
EBITDA | 31,531 | 19,069 | 50,693 | 48,059 | 149,352 | |||||||||||||||
Cost of sales(1),(2) | 631 | - | (35 | ) | - | 596 | ||||||||||||||
Selling, general and administrative(1),(2),(3) | 7,862 | 205 | 109 | 395 | 8,571 | |||||||||||||||
Adjusted EBITDA | $ | 40,024 | $ | 19,274 | $ | 50,767 | $ | 48,454 | $ | 158,519 | ||||||||||
(1) Expense related to plant closure. | ||||||||||||||||||||
(2) Loss on damage to manufacturing facilities caused by weather. | ||||||||||||||||||||
(3) Transaction and advisory fees. | ||||||||||||||||||||
NON-GAAP FINANCIAL MEASURE DISCLOSURE | |||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
Reconciliation of Adjusted Net Income and Adjusted EPS | Three Months Ended |
Three Months Ended |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||
Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | ||||||||||||||||||||||||||
Net income as reported | $ | 15,377 | $ | 0.46 | $ | 21,512 | $ | 0.65 | $ | 21,626 | $ | 0.65 | $ | 23,421 | $ | 0.71 | |||||||||||||||||
Net income reconciling items from below | 6,409 | $ | 0.20 | 195 | $ | 0.01 | 5,974 | $ | 0.18 | 4,349 | $ | 0.13 | |||||||||||||||||||||
Adjusted net income and adjusted EPS | $ | 21,786 | $ | 0.66 | $ | 21,707 | $ | 0.66 | $ | 27,600 | $ | 0.83 | $ | 27,770 | $ | 0.84 | |||||||||||||||||
Reconciliation of Adjusted EBITDA | Three Months Ended |
Three Months Ended |
Six Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||
Reconciliation | Reconciliation | Reconciliation | Reconciliation | ||||||||||||||||||||||||||||||
Net income as reported | $ | 15,377 | $ | 21,512 | $ | 21,626 | $ | 23,421 | |||||||||||||||||||||||||
Income tax expense | 4,314 | 5,551 | 5,956 | 6,004 | |||||||||||||||||||||||||||||
Other, net | (4 | ) | 29 | (1,046 | ) | (189 | ) | ||||||||||||||||||||||||||
Interest expense | 950 | 2,244 | 2,018 | 4,503 | |||||||||||||||||||||||||||||
Depreciation and amortization | 10,894 | 10,456 | 22,046 | 21,076 | |||||||||||||||||||||||||||||
EBITDA | 31,531 | 39,792 | 50,600 | 54,815 | |||||||||||||||||||||||||||||
EBITDA reconciling items from below | 8,493 | 111 | 8,698 | 5,559 | |||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 40,024 | $ | 39,903 | $ | 59,298 | $ | 60,374 | |||||||||||||||||||||||||
Reconciling Items | Three Months Ended |
Three Months Ended |
Six Months Ended |
Six Months Ended |
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Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | ||||||||||||||||||||||||||
Net sales | $ | 266,201 | $ | - | $ | 273,535 | $ | - | $ | 505,356 | $ | - | $ | 535,451 | $ | - | |||||||||||||||||
Cost of sales | 199,963 | (631 | ) | (1) | 206,372 | (48 | ) | (2) | 387,686 | (631 | ) | (1) | 416,521 | (48 | ) | (2) | |||||||||||||||||
Selling, general and administrative | 34,707 | (7,862 | ) | (1), (3) | 27,371 | (63 | ) | (2), (3) | 67,070 | (8,067 | ) | (1), (3) | 64,115 | (5,511 | ) | (2), (3) | |||||||||||||||||
EBITDA | 31,531 | 8,493 | 39,792 | 111 | 50,600 | 8,698 | 54,815 | 5,559 | |||||||||||||||||||||||||
Depreciation and amortization | 10,894 | - | 10,456 | - | 22,046 | - | 21,076 | - | |||||||||||||||||||||||||
Operating income | 20,637 | 8,493 | 29,336 | 111 | 28,554 | 8,698 | 33,739 | 5,559 | |||||||||||||||||||||||||
Interest expense | (950 | ) | - | (2,244 | ) | - | (2,018 | ) | - | (4,503 | ) | - | |||||||||||||||||||||
Other, net | 4 | (92 | ) | (4) | (29 | ) | 132 | (4) | 1,046 | (847 | ) | (4) | 189 | 90 | (4) | ||||||||||||||||||
Income before income taxes | 19,691 | 8,401 | 27,063 | 243 | 27,582 | 7,851 | 29,425 | 5,649 | |||||||||||||||||||||||||
Income tax expense | (4,314 | ) | (1,992 | ) | (5) | (5,551 | ) | (48 | ) | (5) | (5,956 | ) | (1,877 | ) | (5) | (6,004 | ) | (1,300 | ) | (4) | |||||||||||||
Net income | $ | 15,377 | $ | 6,409 | $ | 21,512 | $ | 195 | $ | 21,626 | $ | 5,974 | $ | 23,421 | $ | 4,349 | |||||||||||||||||
Diluted earnings per share | $ | 0.46 | $ | 0.65 | $ | 0.65 | $ | 0.71 | |||||||||||||||||||||||||
(1) Expense related to plant closure. | |||||||||||||||||||||||||||||||||
(2) Loss on damage to manufacturing facilities caused by weather. | |||||||||||||||||||||||||||||||||
(3) Transaction and advisory fees. | |||||||||||||||||||||||||||||||||
(4) Pension settlement (refund) expense and foreign currency transaction losses (gains). | |||||||||||||||||||||||||||||||||
(5)Tax impact of net income reconciling items. | |||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||||
Net sales | $ | 159,774 | $ | 56,583 | $ | 51,078 | $ | (1,234 | ) | $ | 266,201 | |||||||||
Cost of sales | 122,261 | 35,694 | 42,624 | (616 | ) | 199,963 | ||||||||||||||
Gross Margin | 37,513 | 20,889 | 8,454 | (618 | ) | 66,238 | ||||||||||||||
Gross Margin % | 23.5 | % | 36.9 | % | 16.6 | % | 24.9 | % | ||||||||||||
Selling, general and administrative(1) | 13,730 | 7,873 | 5,066 | 8,038 | 34,707 | |||||||||||||||
Depreciation and amortization | 5,218 | 2,538 | 3,082 | 56 | 10,894 | |||||||||||||||
Operating income (loss) | 18,565 | 10,478 | 306 | (8,712 | ) | 20,637 | ||||||||||||||
Depreciation and amortization | 5,218 | 2,538 | 3,082 | 56 | 10,894 | |||||||||||||||
EBITDA | 23,783 | 13,016 | 3,388 | (8,656 | ) | 31,531 | ||||||||||||||
Expense related to plant closure (Cost of sales) | - | 631 | - | 631 | ||||||||||||||||
Expense related to plant closure (SG&A) | - | - | 978 | - | 978 | |||||||||||||||
Transaction and advisory fees | - | - | - | 6,884 | 6,884 | |||||||||||||||
Adjusted EBITDA | $ | 23,783 | $ | 13,016 | $ | 4,997 | $ | (1,772 | ) | $ | 40,024 | |||||||||
Adjusted EBITDA Margin % | 14.9 | % | 23.0 | % | 9.8 | % | 15.0 | % | ||||||||||||
Three months ended |
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Net sales | $ | 156,975 | $ | 63,763 | $ | 53,518 | $ | (721 | ) | $ | 273,535 | |||||||||
Cost of sales | 122,472 | 40,452 | 43,731 | (283 | ) | 206,372 | ||||||||||||||
Gross Margin | 34,503 | 23,311 | 9,787 | (438 | ) | 67,163 | ||||||||||||||
Gross Margin % | 22.0 | % | 36.6 | % | 18.3 | % | 24.6 | % | ||||||||||||
Selling, general and administrative(1) | 14,158 | 8,452 | 5,971 | (1,210 | ) | 27,371 | ||||||||||||||
Depreciation and amortization | 5,050 | 2,353 | 2,970 | 83 | 10,456 | |||||||||||||||
Operating income | 15,295 | 12,506 | 846 | 689 | 29,336 | |||||||||||||||
Depreciation and amortization | 5,050 | 2,353 | 2,970 | 83 | 10,456 | |||||||||||||||
EBITDA | 20,345 | 14,859 | 3,816 | 772 | 39,792 | |||||||||||||||
Loss on damage to manufacturing facilities (Cost of sales) | 35 | - | 13 | - | 48 | |||||||||||||||
Loss on damage to manufacturing facilities (SG&A) | - | - | 200 | - | 200 | |||||||||||||||
Transaction and advisory fees | - | - | - | (137 | ) | (137 | ) | |||||||||||||
Adjusted EBITDA | $ | 20,380 | $ | 14,859 | $ | 4,029 | $ | 635 | $ | 39,903 | ||||||||||
Adjusted EBITDA Margin % | 13.0 | % | 23.3 | % | 7.5 | % | 14.6 | % | ||||||||||||
Six months ended |
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Net sales | $ | 307,769 | $ | 106,020 | $ | 94,215 | $ | (2,648 | ) | $ | 505,356 | |||||||||
Cost of sales | 240,629 | 67,397 | 81,367 | (1,707 | ) | 387,686 | ||||||||||||||
Gross Margin | 67,140 | 38,623 | 12,848 | (941 | ) | 117,670 | ||||||||||||||
Gross Margin % | 21.8 | % | 36.4 | % | 13.6 | % | 23.3 | % | ||||||||||||
Selling, general and administrative(1) | 29,640 | 15,618 | 10,192 | 11,620 | 67,070 | |||||||||||||||
Depreciation and amortization | 10,693 | 5,096 | 6,147 | 110 | 22,046 | |||||||||||||||
Operating income (loss) | 26,807 | 17,909 | (3,491 | ) | (12,671 | ) | 28,554 | |||||||||||||
Depreciation and amortization | 10,693 | 5,096 | 6,147 | 110 | 22,046 | |||||||||||||||
EBITDA | 37,500 | 23,005 | 2,656 | (12,561 | ) | 50,600 | ||||||||||||||
Expense related to plant closure (Cost of sales) | - | - | 631 | - | 631 | |||||||||||||||
Expense related to plant closure (SG&A) | - | - | 978 | - | 978 | |||||||||||||||
Transaction and advisory fees | - | - | - | 7,089 | 7,089 | |||||||||||||||
Adjusted EBITDA | $ | 37,500 | $ | 23,005 | $ | 4,265 | $ | (5,472 | ) | $ | 59,298 | |||||||||
Adjusted EBITDA Margin % | 12.2 | % | 21.7 | % | 4.5 | % | 11.7 | % | ||||||||||||
Six months ended |
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Net sales | $ | 309,955 | $ | 118,715 | $ | 108,192 | $ | (1,411 | ) | $ | 535,451 | |||||||||
Cost of sales | 247,189 | 78,155 | 91,787 | (610 | ) | 416,521 | ||||||||||||||
Gross Margin | 62,766 | 40,560 | 16,405 | (801 | ) | 118,930 | ||||||||||||||
Gross Margin % | 20.3 | % | 34.2 | % | 15.2 | % | 22.2 | % | ||||||||||||
Selling, general and administrative(1) | 27,453 | 15,957 | 10,844 | 9,861 | 64,115 | |||||||||||||||
Depreciation and amortization | 10,295 | 4,701 | 5,904 | 176 | 21,076 | |||||||||||||||
Operating income (loss) | 25,018 | 19,902 | (343 | ) | (10,838 | ) | 33,739 | |||||||||||||
Depreciation and amortization | 10,295 | 4,701 | 5,904 | 176 | 21,076 | |||||||||||||||
EBITDA | 35,313 | 24,603 | 5,561 | (10,662 | ) | 54,815 | ||||||||||||||
Loss on damage to manufacturing facilities (Cost of sales) | 35 | - | 13 | - | 48 | |||||||||||||||
Loss on damage to manufacturing facilities (SG&A) | - | - | 200 | - | 200 | |||||||||||||||
Transaction and advisory fees | - | - | - | 5,311 | 5,311 | |||||||||||||||
Adjusted EBITDA | $ | 35,348 | $ | 24,603 | $ | 5,774 | $ | (5,351 | ) | $ | 60,374 | |||||||||
Adjusted EBITDA Margin % | 11.4 | % | 20.7 | % | 5.3 | % | 11.3 | % | ||||||||||||
(1) Includes stock-based compensation expense for the three and six months ended |
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SALES ANALYSIS | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended |
Six Months Ended |
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2024 | 2023 | 2024 | 2023 | |||||||||||||
NA Fenestration: | ||||||||||||||||
$ | 119,646 | $ | 120,756 | $ | 231,280 | $ | 241,523 | |||||||||
International - fenestration | 7,465 | 8,350 | 13,609 | 13,477 | ||||||||||||
27,532 | 24,334 | 53,323 | 47,400 | |||||||||||||
International - non-fenestration | 5,131 | 3,535 | 9,557 | 7,555 | ||||||||||||
$ | 159,774 | $ | 156,975 | $ | 307,769 | $ | 309,955 | |||||||||
EU Fenestration:(1) | ||||||||||||||||
International - fenestration | $ | 46,968 | $ | 47,903 | $ | 88,719 | $ | 90,257 | ||||||||
International - non-fenestration | 9,615 | 15,860 | 17,301 | 28,458 | ||||||||||||
$ | 56,583 | $ | 63,763 | $ | 106,020 | $ | 118,715 | |||||||||
NA Cabinet Components: | ||||||||||||||||
$ | 3,737 | $ | 4,219 | $ | 7,412 | $ | 8,127 | |||||||||
46,990 | 48,526 | 86,169 | 98,575 | |||||||||||||
International - non-fenestration | 351 | 773 | 634 | 1,490 | ||||||||||||
$ | 51,078 | $ | 53,518 | $ | 94,215 | $ | 108,192 | |||||||||
Unallocated Corporate & Other: | ||||||||||||||||
Eliminations | $ | (1,234 | ) | $ | (721 | ) | $ | (2,648 | ) | $ | (1,411 | ) | ||||
$ | (1,234 | ) | $ | (721 | ) | $ | (2,648 | ) | $ | (1,411 | ) | |||||
$ | 266,201 | $ | 273,535 | $ | 505,356 | $ | 535,451 | |||||||||
(1) Reflects an increase of |
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Source: Quanex Building Products Corporation