UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 3, 2009
Quanex Building Products Corporation
(Exact name of registrant as specified in its charter)
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Delaware |
001-33913 |
26-1561397 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
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1900 West Loop South, Suite 1500, Houston, Texas |
77027 |
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| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: 713-961-4600
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated December 3, 2009
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Quanex Building Products Corporation
(Registrant) |
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December 3, 2009
(Date) |
/s/ BRENT L. KORB
Brent L. Korb Senior Vice President - Finance and Chief Financial Officer (Principal Financial Officer) |
EXHIBIT 99.1
Quanex Building Products Corporation Fiscal 2009 Fourth Quarter and Annual Results
Better Than Expected Seasonal Demand in the Quarter
Fourth Quarter $0.41 Diluted EPS from Continuing Operations
$124 Million Cash and Equivalents
Company Outperformed its Market for the Quarter and Year
HOUSTON, Dec. 3, 2009 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) today reported fiscal fourth quarter 2009 and full-year fiscal 2009 results for the period ending October 31. With fourth quarter net sales of $194.9 million, Quanex reported income from continuing operations of $15.3 million, which included $0.7 million of after-tax LIFO income primarily associated with its Aluminum Sheet Products segment. Earnings from continuing operations were $0.41 per diluted share in the quarter, which included $0.02 per diluted share of LIFO income. The company reported seasonal demand was better than expected at its two operating segments -- Engineered Products and Aluminum Sheet Products. Also, fourth quarter results benefitted from a better than anticipated aluminum spread (sales less material costs).
For the fiscal year, the company's net sales were $585.0 million. The loss from continuing operations was $137.1 million, which included an after-tax impairment charge of $141.4 million and after-tax LIFO income of $4.8 million. Loss from continuing operations was $3.67 per diluted share, which included $3.79 per diluted share of impairment charges and $0.13 per diluted share of LIFO income. Excluding impairment charges and LIFO income, the company had a fiscal 2009 loss of $0.01 per diluted share from continuing operations.
Quarterly and Annual Highlights
* Net sales for the quarter and the year were $194.9 million and $585.0 million, respectively. * Consolidated operating income for the quarter and the year were $20.3 million and a loss of $180.1 million, respectively. * Company booked $182.6 million of pre-tax impairment charges in the first half. * Capital expenditures were $3.3 million and $16.2 million for the quarter and year, respectively. * Cash provided by operating activities was $60.5 million for the year. * Cash and equivalents totaled $123.6 million
Commentary
ENGINEERED PRODUCTS (in millions)
4th qtr 4th qtr FY FY
2009 2008 2009(1) 2008
------- ------- ------- -------
Net sales $ 99.9 $ 112.9 $ 323.3 $ 407.9
Operating income $ 15.2 $ 10.1 $(141.4) $ 29.9
(1) Fiscal 2009 operating income includes non-cash impairment charges
of $162.2 million.
Engineered Products is focused on providing leading OEM window and door customers with value-added fenestration components, products, and systems. Key market drivers are U.S. residential housing starts and remodeling activity.
"The U.S. residential new housing market dropped 30% in our fourth quarter compared to a year ago, while residential remodeling activity was estimated to be off about 10%," said David D. Petratis, president and chief executive officer of Quanex Building Products. "The Engineered Products segment outperformed the overall market with fourth quarter sales down 12% from the year ago period. Our sales performance was better than expected as the seasonal pick-up we experienced in residential building and remodeling activity in the third quarter carried through our fourth quarter, with October sales particularly noteworthy. We also saw our OEM customers capture additional residential remodeling and repair business. The segment's operating income was a healthy $15.2 million, 50% higher than the year ago quarter, the result of stronger shipments, better mix and higher average selling prices."
"We are pleased with the relatively strong performance of Engineered Products, particularly in the second half of the year, and although difficult to quantify, we do believe the segment benefited from the $1,500 energy tax credit window program and the $8,000 first time homebuyer's tax credit that was recently extended through June 2010. However, our view of the overall housing market remains guarded, and we expect the first half of fiscal 2010 to be challenging. We will continue to conservatively size our business and inventories, consistent with how we operated in 2009."
ALUMINUM SHEET PRODUCTS (in millions)
4th qtr 4th qtr FY FY
2009 2008 2009(1) 2008
------- ------- ------- -------
Net sales $ 98.3 $ 139.0 $ 273.7 $ 479.9
Operating income $ 9.9 $ 12.6 $ (26.4) $ 40.3
Shipped pounds 78 81 223 285
(1) Fiscal 2009 operating income includes a non-cash impairment
charge of $20.4 million.
Aluminum Sheet Products is a leading provider of common alloy aluminum sheet products for the building & construction, transportation and other consumer durable markets. Key market drivers are U.S. residential housing starts and remodeling activity.
"Average aluminum prices were up in the fourth quarter compared to our sequential third quarter, which generally benefits our aluminum spread (sales less material costs). Spread was up 10% over the third quarter, better than we anticipated, but down 16% from the fourth quarter last year," Petratis said. "Shipments in the quarter were very healthy at 78 million pounds, off just 3% from the year ago quarter, while shipments in the aluminum market where we compete were down 23% over the same period. Compared to the sequential third quarter, our fourth quarter shipped pounds were up an impressive 21%. Our strong shipments were attributable to a further uptick in seasonal demand, and ongoing short lead-time sales opportunities."
Cash Position
"At fiscal year end, we had a cash balance of $124 million and the company remained essentially debt-free," Petratis said. "Generating healthy cash flows was a top priority for us throughout 2009, and will remain so for 2010. Cash from operations for the year was a very respectable $60.5 million given the historically depressed year. Our uses for cash will be to continue to fund organic growth opportunities, make strategic acquisitions, and when appropriate, raise our common stock dividend and repurchase outstanding shares."
Fiscal 2010 Business Outlook
"High unemployment, relatively high inventories of new and existing homes for sale, and high rates of foreclosures will continue to be a drag on our business for the next twelve months. However, we do believe both new home construction and remodeling activity bottomed during fiscal 2009, and we expect slightly better sales and improved earnings in 2010 compared to 2009. We expect the first half of 2010 to be challenging and it is uncertain as to how long our end markets will remain at depressed levels, so we must continue to operate our businesses with reduced staffs and minimal levels of materials," said Petratis. "This uncertainty carries through to our ability to precisely estimate segment operating income for fiscal 2010."
"At this time, we expect Engineered Products to earn $25 million to $30 million in operating income in 2010, predominantly in the second half. Improved earnings in 2010 compared to 2009 will come from a combination of new product opportunities, new customers, and modest improvements in our two end markets."
"We expect Aluminum Sheet Products to earn about $10 million in operating income in 2010, predominantly in the second half. Our 2010 guidance assumes an aluminum spread generally in-line with 2009, and slightly higher shipments. This guidance represents an improvement over 2009 results that were negatively impacted by about $13 million in the first half due to high scrap inventories combined with a dramatic fall in aluminum prices. While it is problematic to predict aluminum prices, we do not expect aluminum prices to fall 60% again in 2010, nor do we expect to be impacted by high scrap inventories to the extent we were in 2009.
"Financial guidance for Engineered Products and Aluminum Sheet Products exclude estimated corporate expenses of $23 million and any impact from LIFO. Additionally, fiscal 2010 estimates for capital expenditures, and depreciation & amortization are $22 million and $30 million, respectively," concluded Petratis.
Non-GAAP Financial Measures
Income from Continuing Operations Excluding LIFO
Income from continuing operations excluding LIFO, impairments and separation related costs are non-GAAP financial measures. The Company believes these non-GAAP financial measures provide a consistent basis for comparison between quarters and enhances the understanding of the performance of its operations.
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 excluding LIFO, impairments and separation related costs and diluted earnings per share from continuing operations excluding LIFO, impairments and separation related costs. 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 October 31,
--------------------------------
(in millions except diluted EPS) 2009 2008
---------------- ---------------
Diluted Diluted
Income EPS Income EPS
------- ------- ------- -------
Income (loss) from continuing
operations, as reported $ 15.3 $ 0.41 $ 15.0 $ 0.40
LIFO charge (income) (0.7) (0.02) (3.1) (0.08)
Impairment of goodwill
and intangibles -- -- -- --
Charges associated with the
Company's Separation
(stock-based
compensation,
transaction
costs and other) -- -- -- --
------- ------- ------- -------
Income (loss) from
continuing operations,
excluding special items $ 14.6 $ 0.39 $ 11.9 $ 0.32
======= ======= ======= =======
Diluted weighted average
common shares outstanding
(in thousands) 37,698 37,466
Twelve months ended October 31,
--------------------------------
(in millions except diluted EPS) 2009 2008
---------------- ---------------
Net Diluted Net Diluted
Income EPS Income EPS
------- ------- ------- -------
Income (loss) from continuing
operations, as reported $(137.1) $ (3.67) $ 15.9 $ 0.41
LIFO charge (income) (4.8) (0.13) 0.2 0.01
Impairment of goodwill
and intangibles 141.4 3.79 -- --
Charges associated with
the Company's Separation
(stock-based compensation,
transaction costs and other) -- -- 14.7 0.38
------- ------- ------- -------
Income (loss) from continuing
operations, excluding
special items $ (0.5) $ (0.01) $ 30.8 $ 0.80
======= ======= ======= =======
Diluted weighted average
common shares outstanding
(in thousands) 37,335 38,528
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, 2009, to shareholders of record on December 18, 2009.
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 an ROIC-driven company that grows shareholder returns through a combination of organic growth via new products and programs, and strategic acquisitions.
Financial Statistics as of 10/31/09
Book value per common share: $11.22; Total debt to capitalization: 0.5%; Actual number of common shares outstanding: 37,650,312.
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.
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, 2008, 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 Twelve months ended
October 31, October 31,
-------------------- --------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Net Sales:
$ 99,900 $ 112,866 Engineered Products $ 323,319 $ 407,896
98,309 139,037 Aluminum Sheet Products 273,728 479,925
--------- --------- --------- ---------
198,209 251,903 Building Products 597,047 887,821
(3,270) (5,558) Eliminations (12,037) (18,888)
--------- --------- --------- ---------
$ 194,939 $ 246,345 Net Sales $ 585,010 $ 868,933
========= ========= ========= =========
Operating Income*:
$ 15,160 $ 10,101 Engineered Products $(141,361) $ 29,882
9,879 12,565 Aluminum Sheet Products (26,416) 40,260
--------- --------- --------- ---------
25,039 22,666 Building Products (167,777) 70,141
(4,769) 1,332 Corporate and Other (12,304) (49,161)
--------- --------- --------- ---------
$ 20,270 $ 23,998 Operating Income(Loss) $(180,081) $ 20,981
========= ========= ========= =========
--------------------
* Operating income reflects non-cash impairment charge of $182,562:
Twelve Months
Ended
October 31,
2009
-------------
(In thousands)
Engineered Products $ (162,173)
Aluminum Sheet Products $ (20,389)
-------------
Total impairment loss (182,562)
=============
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,
------------------ -------------------
2009 2008 2009 2008
-------- -------- --------- --------
$194,939 $246,345 Net sales $ 585,010 $868,933
Cost of sales
(exclusive of items
149,288 199,080 shown separately below) 489,348 717,376
Selling, general and
17,307 14,822 administrative expense 60,466 95,504
Impairment of
-- -- goodwill and intangibles 182,562 --
Depreciation
8,074 8,445 and amortization 32,715 35,072
-------- -------- --------- --------
20,270 23,998 Operating income (loss) (180,081) 20,981
(93) (124) Interest expense (453) (480)
80 312 Other, net 407 5,188
-------- -------- --------- --------
Income (loss) from
continuing operations
20,257 24,186 before income taxes (180,127) 25,689
Income tax
(4,926) (9,176) benefit (expense) 43,036 (9,785)
-------- -------- --------- --------
Income (loss) from
15,331 15,010 continuing operations (137,091) 15,904
Income (loss) from
discontinued operations,
-- -- net of taxes -- 5,675
-------- -------- --------- --------
$ 15,331 $ 15,010 Net income (loss) $(137,091) $ 21,579
======== ======== ========= ========
Basic earnings
per common share:
Earnings (loss)
from continuing
$ 0.41 $ 0.40 operations $ (3.67) $ 0.43
Income (loss)
from discontinued
$ -- $ -- operations $ -- $ 0.15
-------- -------- --------- --------
Basic earnings
(loss) per
$ 0.41 $ 0.40 common share $ (3.67) $ 0.58
-------- -------- --------- --------
Diluted earnings
per common share:
Earnings (loss)
from continuing
$ 0.41 $ 0.40 operations $ (3.67) $ 0.41
Income (loss) from
$ -- $ -- discontinued operations $ -- $ 0.15
-------- -------- --------- --------
Diluted earnings
$ 0.41 $ 0.40 (loss) per share $ (3.67) $ 0.56
-------- -------- --------- --------
Weighted average
common shares outstanding:
37,338 37,333 Basic 37,335 37,274
37,698 37,466 Diluted 37,335 38,528
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Oct. 31, Oct. 31,
2009 2008
---------------------------------------------------------------------
Assets
$123,634 Cash and equivalents $ 67,413
80,171 Accounts receivable, net 101,211
46,525 Inventories, net 63,848
20,611 Deferred income taxes 10,932
5,264 Other current assets 6,239
-------- ----------------------------------------------- --------
276,205 Total current assets 249,643
142,810 Property, plant and equipment, net 157,389
42,923 Deferred income taxes 3,875
25,189 Goodwill 196,338
47,359 Intangible assets, net 62,476
9,114 Other assets 11,126
-------- ----------------------------------------------- --------
$543,600 Total assets $680,847
======== =============================================== ========
Liabilities and stockholders' equity
$ 67,010 Accounts payable $ 79,512
30,329 Accrued liabilities 38,316
323 Current maturities of long-term debt 363
-------- ----------------------------------------------- --------
97,662 Total current liabilities 118,191
1,943 Long-term debt 2,188
6,655 Deferred pension and postretirement benefits 3,092
1,767 Non-current environmental reserves 2,485
13,047 Other liabilities 7,063
-------- ----------------------------------------------- --------
121,074 Total liabilities 133,019
422,526 Total stockholders' equity 547,828
-------- ----------------------------------------------- --------
$543,600 Total liabilities and stockholders' equity $680,847
======== =============================================== ========
QUANEX BUILDING PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
Twelve months ended
October 31,
--------------------
2009 2008
--------- ---------
Operating activities:
Net income (loss) $(137,091) $ 21,579
Income from discontinued operations -- (5,675)
--------- ---------
Net income from continuing operations (137,091) 15,904
Adjustments to reconcile net income
(loss) to cash provided by
operating activities:
Depreciation and amortization 32,784 35,111
Impairment of goodwill and intangibles 182,562 --
Deferred income taxes (43,608) 2,984
Stock-based compensation 3,429 26,378
--------- ---------
38,076 80,377
Changes in assets and liabilities,
net of effects from acquisitions,
dispositions and the Separation:
Decrease (Increase) in accounts receivable 18,636 (21,495)
Decrease (Increase) in inventory 16,494 (10,398)
Decrease (Increase) in other current assets (168) (390)
Increase (Decrease) in accounts payable (12,306) 11,406
Increase (Decrease) in accrued liabilities (3,154) (3,285)
Increase (Decrease) in income taxes (892) 1,088
Increase (Decrease) in deferred pension
and postretirement benefits (407) (2,515)
Other, net 4,212 (1,824)
--------- ---------
Cash provided by (used for)
operating activities from
continuing operations 60,491 52,964
Cash provided by (used for)
operating activities from
discontinued operations -- 25,127
--------- ---------
Cash provided by (used for)
operating activities 60,491 78,091
--------- ---------
Investing activities:
Capital expenditures, net of retirements (16,153) (15,815)
Proceeds from property insurance claims 1,400 --
Other, net (57) (23)
--------- ---------
Cash provided by (used for)
investing activities from
continuing operations (14,810) (15,838)
Cash provided by (used for)
investing activities from
discontinued operations -- 34,113
--------- ---------
Cash provided by (used for)
investing activities (14,810) 18,275
--------- ---------
Financing activities:
Repayments of long-term debt (363) (1,464)
Common dividends paid (4,519) (2,258)
Funding from Separation 15,401 32,735
Other, net (11) (302)
--------- ---------
Cash provided by (used for)
financing activities from
continuing operations 10,508 28,711
Cash provided by (used for)
financing activities from
discontinued operations -- (46,183)
--------- ---------
Cash provided by (used for)
financing activities 10,508 (17,472)
--------- ---------
Effect of exchange rate changes
on cash and equivalents 32 (202)
LESS: (Increase) Decrease
in cash and equivalents
from discontinued operations -- (13,057)
--------- ---------
Increase (Decrease) in cash and
equivalents from continuing operations 56,221 65,635
Beginning of period cash and equivalents 67,413 1,778
--------- ---------
End of period cash and equivalents $ 123,634 $ 67,413
========= =========
CONTACT: Quanex Building Products Corporation
Financial Contact:
Jeff Galow
713-877-5327
Media Contact:
Valerie Calvert
713-877-5305