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Quanex Building Products Announces Third Quarter 2021 Results and Reaffirms Full Year 2021 Guidance

Solid Net Sales Growth Realized Across All Operating Segments 
Strong Balance Sheet 
Liquidity Continues to Increase 
Repaid $15 Million of Bank Debt

HOUSTON, Sept. 02, 2021 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2021.

The Company reported the following selected financial results:

QUANEX BUILDING PRODUCTS CORPORATION                
Q3 2021 Earnings Release                  
      Three Months Ended July 31,   Nine Months Ended July 31,
($ in millions, except per share data)     2021   2020   2021   2020
Net Sales     $279.9   $212.1   $780.4   $596.2
Gross Margin     $60.0   $49.7   $175.7   $126.6
Gross Margin %     21.4%   23.4%   22.5%   21.2%
Net Income     $13.6   $10.8   $36.0   $16.3
Diluted EPS     $0.41   $0.33   $1.08   $0.50
                   
Adjusted Net Income     $14.2   $11.1   $37.8   $18.7
Adjusted Diluted EPS     $0.42   $0.34   $1.13   $0.57
Adjusted EBITDA     $32.9   $27.7   $89.5   $65.2
Adjusted EBITDA Margin %     11.8%   13.1%   11.5%   10.9%
                   
Cash Provided by Operating Activities     $18.5   $45.1   $47.4   $47.6
Free Cash Flow     $12.3   $40.7   $31.4   $26.9

(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and Free Cash Flow Reconciliation table for additional information)

George Wilson, President and Chief Executive Officer, stated, “Demand for our products remained robust across all of our product lines throughout the third quarter of 2021.   On a consolidated basis, net sales increased by approximately 32% year-over-year as compared to the third quarter of 2020. General inflation, time lag for index pricing, supply chain challenges and labor constraints all continue to have a negative impact on margins.   In addition, our plant in Germany was down for approximately 14 days during the quarter due to flooding in Europe, but the plant was back up and running at full capacity by the end of July. Our balance sheet continues to strengthen, and we were able to repay $15.0 million in bank debt during the quarter while also repurchasing approximately $1.8 million of our common stock. We will remain focused on generating cash and paying down debt in the near-term.”   (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

Third Quarter 2021 Results Summary   

The Company reported net sales of $279.9 million during the three months ended July 31, 2021, which represents growth of 32.0% compared to $212.1 million for the same period of 2020. The increase was largely due to increased demand across all product lines and operating segments combined with increased pricing mostly related to the pass through of raw material cost inflation. In detail, Quanex posted net sales growth of 20.8% in its North American Fenestration segment, 19.3% in its North American Cabinet Components segment and 85.8% in its European Fenestration segment, excluding the foreign exchange impact and despite the challenges presented by flooding in Germany as previously noted. As a reminder, both of Quanex’s manufacturing facilities in the U.K. were shut down in late March of 2020 and did not resume operations until mid-to-late May 2020. (See Sales Analysis table for additional information)

The increase in earnings for the third quarter of 2021 was mainly due to higher volumes and improved operating leverage. This increase was somewhat offset by inflationary pressures and an increase in selling, general and administrative expenses, which was mostly attributable to more normalized medical costs combined with an increase in stock-based compensation expense.  

Balance Sheet & Liquidity Update

As of July 31, 2021, Quanex had total debt of $74.0 million and its leverage ratio of Net Debt to LTM Adjusted EBITDA improved to 0.2x.   (See Non-GAAP Terminology Definitions and Disclaimers section and Net Debt and LTM Adjusted EBITDA reconciliation tables for additional information)

The Company’s liquidity increased to $306.2 million as of July 31, 2021, consisting of $43.7 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2023, less letters of credit outstanding.

Share Repurchases

Quanex’s Board of Directors authorized a $60 million share repurchase program in September of 2018. Repurchases under this program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements, and other relevant factors. The program does not have an expiration date or a limit on the number of shares that may be repurchased.   The Company repurchased 74,257 shares of common stock for approximately $1.8 million at an average price of $23.88 per share during the three months ended July 31, 2021. As of July 31, 2021, approximately $5.4 million remained under the existing share repurchase authorization.   

Outlook        

George Wilson, President and Chief Executive Officer, commented, “While we remain optimistic on the demand outlook for our products, we do expect inflation, labor costs, and supply chain challenges to continue pressuring margins throughout the fourth quarter of this year. We continue to pass these incremental costs along to our customers through indexes, surcharges, and price increases; however, there are time lags in each case.   With this backdrop, on a consolidated basis, we are reaffirming net sales guidance of approximately $1.04 billion to $1.06 billion and Adjusted EBITDA* of $125 million to $130 million in fiscal 2021.”

*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.

Conference Call and Webcast Information

The Company has scheduled a conference call for Friday, September 3, 2021, at 11:00 a.m. ET (10:00 a.m. CT). To participate in the conference call dial (877) 388-2139 for domestic callers and (541) 797-2983 for international callers, in both cases using the conference passcode 6642169, and ask for the Quanex call a few minutes prior to the start time. A link to the live audio webcast will also be available on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events. A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through September 10, 2021. To access the replay dial (855) 859-2056 for domestic callers and (404) 537-3406 for international callers, in both cases referencing conference passcode 6642169.  

About Quanex

Quanex Building Products Corporation is an industry-leading manufacturer of components sold to Original Equipment Manufacturers (OEMs) in the building products industry.  Quanex designs and produces energy-efficient fenestration products in addition to kitchen and bath cabinet components.   For more information contact Scott Zuehlke, Senior Vice President, Chief Financial Officer & Treasurer, at 713-877-5327 or scott.zuehlke@quanex.com.

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) and 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.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of Quanex’s residual cash flow available for discretionary expenditures. The Company believes that the presented non-GAAP measures provide a consistent basis for comparison between periods and will assist investors in understanding Quanex’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. The Company does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP.  

Forward Looking Statements

Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the 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, 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 October 31, 2020, and the Company’s Quarterly Reports on Form 10-Q under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Any forward-looking statements in this press release are made as of the date hereof, and Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

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

    Three Months Ended July 31,   Nine Months Ended July 31,
      2021       2020       2021       2020  
                 
Net sales   $ 279,877     $ 212,096     $ 780,381     $ 596,168  
Cost of sales     219,866       162,427       604,723       469,586  
Selling, general and administrative     27,766       21,973       88,299       62,818  
Restructuring charges     -       73       39       477  
Depreciation and amortization     10,683       11,060       32,543       35,851  
Operating income     21,562       16,563       54,777       27,436  
Interest expense     (597 )     (1,165 )     (1,988 )     (4,310 )
Other, net     188       (220 )     645       116  
Income before income taxes     21,153       15,178       53,434       23,242  
Income tax expense     (7,474 )     (4,345 )     (17,352 )     (6,898 )
Net income   $ 13,679     $ 10,833     $ 36,082     $ 16,344  
                 
Earnings per common share, basic   $ 0.41     $ 0.33     $ 1.09     $ 0.50  
Earnings per common share, diluted   $ 0.41     $ 0.33     $ 1.08     $ 0.50  
                 
Weighted average common shares outstanding:                
Basic     33,359       32,610       33,194       32,716  
Diluted     33,650       32,739       33,518       32,845  
                 
Cash dividends per share   $ 0.08     $ 0.08     $ 0.24     $ 0.24  
                                 

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

    July 31, 2021   October 31, 2020
ASSETS        
Current assets:        
Cash and cash equivalents   $ 43,663     $ 51,621  
Accounts receivable, net     98,286       88,287  
Inventories, net     93,493       61,181  
Prepaid and other current assets     9,133       6,217  
Total current assets     244,575       207,306  
Property, plant and equipment, net     176,032       184,104  
Operating lease right-of-use assets     54,811       51,824  
Goodwill     150,487       146,154  
Intangible assets, net     86,026       93,068  
Other assets     7,261       9,129  
Total assets   $ 719,192     $ 691,585  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable   $ 79,167     $ 77,335  
Accrued liabilities     52,751       38,289  
Income taxes payable     1,327       6,465  
Current maturities of long-term debt     839       692  
Current operating lease liabilities     8,270       7,459  
Total current liabilities     142,354       130,240  
Long-term debt     72,439       116,728  
Noncurrent operating lease liabilities     47,371       44,873  
Deferred pension and postretirement benefits     10,765       10,923  
Deferred income taxes     25,252       19,116  
Other liabilities     15,622       13,946  
Total liabilities     313,803       335,826  
Stockholders’ equity:        
Common stock     373       373  
Additional paid-in-capital     253,662       253,458  
Retained earnings     241,582       213,517  
Accumulated other comprehensive loss     (22,968 )     (33,024 )
Treasury stock at cost     (67,260 )     (78,565 )
Total stockholders’ equity     405,389       355,759  
Total liabilities and stockholders' equity   $ 719,192     $ 691,585  
         

 

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

  Nine Months Ended July 31,
    2021       2020  
Operating activities:      
Net income $ 36,082     $ 16,344  
Adjustments to reconcile net income to cash provided by operating activities:      
Depreciation and amortization   32,543       35,851  
Stock-based compensation   1,470       513  
Deferred income tax   5,429       438  
Other, net   5,485       762  
Changes in assets and liabilities:      
Increase in accounts receivable   (8,277 )     (1,852 )
(Increase) decrease in inventory   (32,113 )     3,553  
(Increase) decrease in other current assets   (2,768 )     1,218  
Increase (decrease) in accounts payable   1,600       (1,878 )
Increase (decrease) in accrued liabilities   12,521       (7,611 )
(Decrease) increase in income taxes payable   (5,158 )     107  
(Decrease) increase in deferred pension and postretirement benefits   (158 )     573  
Increase (decrease) in other long-term liabilities   962       (181 )
Other, net   (183 )     (276 )
Cash provided by operating activities   47,435       47,561  
Investing activities:      
Capital expenditures   (16,006 )     (20,673 )
Proceeds from disposition of capital assets   3,138       131  
Cash used for investing activities   (12,868 )     (20,542 )
Financing activities:      
Borrowings under credit facilities   -       114,500  
Repayments of credit facility borrowings   (45,000 )     (119,000 )
Repayments of other long-term debt   (502 )     (791 )
Common stock dividends paid   (8,017 )     (7,910 )
Issuance of common stock   16,272       2,954  
Payroll tax paid to settle shares forfeited upon vesting of stock   (492 )     (454 )
Purchase of treasury stock   (5,741 )     (6,693 )
Cash used for financing activities   (43,480 )     (17,394 )
Effect of exchange rate changes on cash and cash equivalents   955       580  
(Decrease) increase in cash and cash equivalents   (7,958 )     10,205  
Cash and cash equivalents at beginning of period   51,621       30,868  
Cash and cash equivalents at end of period $ 43,663     $ 41,073  
       

 

QUANEX BUILDING PRODUCTS CORPORATION
FREE CASH FLOW AND NET DEBT RECONCILIATIONS
(In thousands)
(Unaudited)

The following table reconciles the Company's calculation of Free Cash Flow, a non-GAAP measure, to its most directly comparable GAAP measure. The Company defines Free Cash Flow as cash provided by operating activities less capital expenditures.
                   
      Three Months Ended July 31,   Nine Months Ended July 31,
        2021       2020       2021       2020  
Cash provided by operating activities       18,475     $45,089     $47,435     $47,561  
Capital expenditures       (6,207)       (4,360)       (16,006)       (20,673)  
Free Cash Flow     $12,268     $40,729     $31,429     $26,888  
                   
                   
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 July 31,    
        2021       2020          
Revolving Credit Facility     $58,000     $138,000          
Finance Lease Obligations       15,951       15,729          
Total Debt (1)       73,951       153,729          
Less: Cash and cash equivalents       43,663       41,073          
Net Debt     $30,288     $112,656          
                   
(1) Excludes outstanding letters of credit.                  

 

QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands, except per share data)
(Unaudited)

                                   
                                   
    Three Months Ended   Three Months Ended   Nine Months Ended   Nine Months Ended  
Reconciliation of Adjusted Net Income and Adjusted EPS   July 31, 2021   July 31, 2020   July 31, 2021   July 31, 2020  
    Net
Income
  Diluted
EPS
  Net
Income
  Diluted
EPS
  Net
Income
  Diluted
EPS
  Net
Loss
  Diluted
EPS
 
Net income as reported   $ 13,679     $ 0.41     $ 10,833     $ 0.33     $ 36,082     $ 1.08     $ 16,344     $ 0.50    
Net Income reconciling items from below     512       0.01       280       0.01       1,686       0.05       2,387       0.07    
Adjusted net income and adjusted EPS   $ 14,191     $ 0.42     $ 11,113     $ 0.34     $ 37,768     $ 1.13     $ 18,731     $ 0.57    
                                   
Reconciliation of Adjusted EBITDA   Three Months Ended
July 31, 2021
  Three Months Ended
July 31, 2020
  Nine Months Ended
July 31, 2021
  Nine Months Ended
July 31, 2020
 
    Reconciliation       Reconciliation       Reconciliation       Reconciliation      
Net income as reported   $ 13,679         $ 10,833         $ 36,082         $ 16,344        
Income tax expense     7,474           4,345           17,352           6,898        
Other, net     (188 )         220           (645 )         (116 )      
Interest expense     597           1,165           1,988           4,310        
Depreciation and amortization     10,683           11,060           32,543           35,851        
EBITDA     32,245           27,623           87,320           63,287        
EBITDA reconciling items from below     682           73           2,160           1,875        
Adjusted EBITDA   $ 32,927         $ 27,696         $ 89,480         $ 65,162        
                                   
Reconciling Items   Three Months Ended
July 31, 2021
  Three Months Ended
July 31, 2020
  Nine Months Ended
July 31, 2021
  Nine Months Ended
July 31, 2020
 
    Income
Statement
  Reconciling
Items
  Income
Statement
  Reconciling
Items
  Income
Statement
  Reconciling
Items
  Income
Statement
  Reconciling
Items
 
Net sales   $ 279,877     $ -     $ 212,096     $ -     $ 780,381     $ -     $ 596,168     $ -    
Cost of sales     219,866       (307 ) (1 )   162,427       -       604,723       (307 ) (1 )   469,586       -    
Selling, general and administrative     27,766       (375 ) (2 )   21,973       -       88,299       (1,814 ) (2 )   62,818       (1,398 ) (2 )
Restructuring charges     -       -       73       (73 ) (3 )   39       (39 ) (3 )   477       (477 ) (3 )
EBITDA     32,245       682       27,623       73       87,320       2,160       63,287       1,875    
Depreciation and amortization     10,683       -       11,060       -       32,543       -       35,851       (968 ) (4 )
Operating income     21,562       682       16,563       73       54,777       2,160       27,436       2,843    
Interest expense     (597 )     -       (1,165 )     -       (1,988 )     -       (4,310 )     -    
Other, net     188       79   (5 )   (220 )     458   (5 )   645       161   (5 )   116       390   (5 )
Income before income taxes     21,153       761       15,178       531       53,434       2,321       23,242       3,233    
Income tax expense     (7,474 )     (249 ) (6 )   (4,345 )     (251 ) (6 )   (17,352 )     (635 ) (6 )   (6,898 )     (846 ) (6 )
Net income   $ 13,679     $ 512     $ 10,833     $ 280     $ 36,082     $ 1,686     $ 16,344     $ 2,387    
                                   
Diluted earnings per share   $ 0.41         $ 0.33         $ 1.08         $ 0.50        
                                   
                                   
(1) Loss on damage to a plant caused by flooding of $0.3 million for the three and nine months ended July 31, 2021.
(2) Transaction and advisory fees, $0.4 million related to the loss on a sale of a plant in the three months ended July 31, 2021, $1.8 million related to the loss on a sale of a plant in the nine months ended July 31, 2021, $1.3 million related to executive severance charges in the nine months ended July 31, 2020, respectively.
(3) Restructuring charges related to the closure of manufacturing plant facilities.                
(4) Accelerated depreciation related to the closure of a North American Cabinet Components plant.         
(5) Foreign currency transaction losses.                 
(6) Impact on a with and without basis.         

 

QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands)
(Unaudited)

Reconciliation of Last Twelve Months Adjusted EBITDA   Three Months Ended
July 31, 2021
  Three Months Ended
April 30, 2021
  Three Months Ended
January 31, 2021
  Three Months Ended
October 31, 2020
  Total
    Reconciliation   Reconciliation   Reconciliation   Reconciliation   Reconciliation
Net income as reported   $ 13,679     $ 14,551     $ 7,852     $ 22,152     $ 58,234  
Income tax expense     7,474       6,454       3,424       4,906       22,258  
Other, net     (188 )     (265 )     (192 )     (164 )     (809 )
Interest expense     597       640       751       935       2,923  
Depreciation and amortization     10,683       10,845       11,015       11,378       43,921  
EBITDA     32,245       32,225       22,850       39,207       126,527  
Cost of sales (1)     307       -       -       -       307  
Selling, general and administrative (2)     375       -       1,439       -       1,814  
Restructuring charges (3)     -       -       39       145       184  
Adjusted EBITDA   $ 32,927     $ 32,225     $ 24,328     $ 39,352     $ 128,832  
                     
(1) Loss on the damage of a plant caused by flooding.          
(2) Transaction and advisory fees, loss on the sale of a plant, and executive severance charges.        
(3) Restructuring charges relate to the closure of manufacturing plant facilities.        

 

QUANEX BUILDING PRODUCTS CORPORATION
SELECTED SEGMENT DATA
(In thousands)
(Unaudited)

This table provides gross margin, operating (loss) income, 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 July 31, 2021                    
Net sales   $ 147,818     $ 71,114     $ 61,936     $ (991 )   $ 279,877  
Cost of sales     116,517       49,479       54,334       (464 )     219,866  
Gross Margin     31,301       21,635       7,602       (527 )     60,011  
Gross Margin %     21.2%       30.4%       12.3%           21.4%  
Selling, general and administrative     13,428       7,525       5,130       1,683       27,766  
Depreciation and amortization     4,571       2,646       3,390       76       10,683  
Operating income (loss)     13,302       11,464       (918 )     (2,286 )     21,562  
Depreciation and amortization     4,571       2,646       3,390       76       10,683  
EBITDA     17,873       14,110       2,472       (2,210 )     32,245  
Loss on the damage of a plant     -       307       -       -       307  
Loss on sale of plant     375       -       -       -       375  
Adjusted EBITDA   $ 18,248     $ 14,417     $ 2,472     $ (2,210 )   $ 32,927  
Adjusted EBITDA Margin %     12.3%       20.3%       4.0%           11.8%  
                     
Three months ended July 31, 2020                    
Net sales   $ 122,386     $ 38,265     $ 51,925     $ (480 )   $ 212,096  
Cost of sales     92,639       25,845       44,218       (275 )     162,427  
Gross Margin     29,747       12,420       7,707       (205 )     49,669  
Gross Margin %     24.3%       32.5%       14.8%           23.4%  
Selling, general and administrative     11,922       4,748       4,634       669       21,973  
Restructuring charges     71       -       2       -       73  
Depreciation and amortization     5,371       2,307       3,264       118       11,060  
Operating income (loss)     12,383       5,365       (193 )     (992 )     16,563  
Depreciation and amortization     5,371       2,307       3,264       118       11,060  
EBITDA     17,754       7,672       3,071       (874 )     27,623  
Restructuring charges     71       -       2       -       73  
Adjusted EBITDA   $ 17,825     $ 7,672     $ 3,073     $ (874 )   $ 27,696  
Adjusted EBITDA Margin %     14.6%       20.0%       5.9%           13.1%  
                     
Nine months ended July 31, 2021                    
Net sales   $ 422,077     $ 181,862     $ 179,492     $ (3,050 )   $ 780,381  
Cost of sales     328,278       122,631       155,370       (1,556 )     604,723  
Gross Margin     93,799       59,231       24,122       (1,494 )     175,658  
Gross Margin %     22.2%       32.6%       13.4%           22.5%  
Selling, general and administrative     38,944       21,559       15,372       12,424       88,299  
Restructuring charges     39       -       -       -       39  
Depreciation and amortization     14,528       7,771       9,965       279       32,543  
Operating income (loss)     40,288       29,901       (1,215 )     (14,197 )     54,777  
Depreciation and amortization     14,528       7,771       9,965       279       32,543  
EBITDA     54,816       37,672       8,750       (13,918 )     87,320  
Loss on the damage of a plant     -       307       -       -       307  
Loss on sale of plant     375       -       -       1,439       1,814  
Restructuring charges     39       -       -       -       39  
Adjusted EBITDA   $ 55,230     $ 37,979     $ 8,750     $ (12,479 )   $ 89,480  
Adjusted EBITDA Margin %     13.1%       20.9%       4.9%           11.5%  
                     
Nine months ended July 31, 2020                    
Net sales   $ 341,432     $ 104,230     $ 152,634     $ (2,128 )   $ 596,168  
Cost of sales     266,489       72,055       132,259       (1,217 )     469,586  
Gross Margin     74,943       32,175       20,375       (911 )     126,582  
Gross Margin %     21.9%       30.9%       13.3%           21.2%  
Selling, general and administrative     34,962       15,990       13,468       (1,602 )     62,818  
Restructuring charges     228       -       249       -       477  
Depreciation and amortization     18,311       7,045       10,139       356       35,851  
Operating income (loss)     21,442       9,140       (3,481 )     335       27,436  
Depreciation and amortization     18,311       7,045       10,139       356       35,851  
EBITDA     39,753       16,185       6,658       691       63,287  
Transaction and advisory fees     -       -       -       55       55  
Executive severance charges     -       -       -       1,343       1,343  
Restructuring charges     228       -       249       -       477  
Adjusted EBITDA   $ 39,981     $ 16,185     $ 6,907     $ 2,089     $ 65,162  
Adjusted EBITDA Margin %     11.7%       15.5%       4.5%           10.9%  

 

QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)

                 
     Three Months Ended    Nine Months Ended
    July 31, 2021   July 31, 2020   July 31, 2021   July 31, 2020
                 
NA Fenestration:              
  United States - fenestration $ 129,291     $ 109,455     $ 369,809     $ 302,094  
  International - fenestration   9,581       6,696       25,756       19,284  
  United States - non-fenestration   5,853       4,845       17,543       13,779  
  International - non-fenestration   3,093       1,390       8,969       6,275  
    $ 147,818     $ 122,386     $ 422,077     $ 341,432  
EU Fenestration (1):              
  International - fenestration $ 54,883     $ 31,904     $ 147,072     $ 87,732  
  International - non-fenestration   16,231       6,361       34,790       16,498  
    $ 71,114     $ 38,265     $ 181,862     $ 104,230  
NA Cabinet Components:              
  United States - fenestration $ 3,240     $ 2,666     $ 9,711     $ 8,461  
  United States - non-fenestration   57,418       48,849       168,308       142,838  
  International - non-fenestration   1,278       410       1,473       1,335  
    $ 61,936     $ 51,925     $ 179,492     $ 152,634  
Unallocated Corporate & Other:              
  Eliminations $ (991 )   $ (480 )   $ (3,050 )   $ (2,128 )
    $ (991 )   $ (480 )   $ (3,050 )   $ (2,128 )
                 
Net Sales $ 279,877     $ 212,096     $ 780,381     $ 596,168  
                 
(1) Reflects increase of $4.1 million and $8.6 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2021, respectively.

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Source: Quanex Building Products Corporation