UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 28, 2004
QUANEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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1-5725 |
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38-1872178 |
(State or other jurisdiction of |
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(Commission |
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(I.R.S. Employer Identification |
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1900 West Loop South, Suite 1500, Houston, Texas 77027 |
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(Address of principal executive offices) |
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Registrants telephone number, including area code: 713-961-4600 |
Not applicable.
Item 2. Acquisition or Disposition of Assets
Not applicable
Item 3. Bankruptcy or Receivership
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Not applicable.
99.1 Press Release dated January 28, 2004, providing earnings guidance for the 1st quarter of fiscal year 2004.
Not applicable.
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.
On January 28, 2004, Quanex Corporation issued a press release (the Press Release) providing earnings guidance for the 1st quarter of fiscal year 2004. The foregoing is qualified by reference to the Press Release which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Not applicable.
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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 Corporation |
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Date: |
January 29, 2004 |
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By: |
/s/ Terry M. Murphy |
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Terry M. Murphy |
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Vice President Finance and Chief Financial Officer |
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(Principal Financial Officer) |
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INDEX TO EXHIBITS
Exhibit |
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Description of Exhibits |
99.1* |
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Press Release dated January 28, 2004, providing earnings guidance for the 1st quarter of fiscal year 2004. |
* Filed herewith
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NEWS RELEASE |
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Contacts: |
Jeff Galow, 713/877-5327 |
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Valerie Calvert, 713/877-5305 |
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Houston, Texas, January 28, 2004 - Quanex Corporation (NYSE:NX), an industry-leading manufacturer of engineered materials and components for the Vehicular Products and Building Products markets, announced today that it expects to report first quarter diluted earnings per share in a range of $0.35 to $0.40 when it announces results on February 26, 2004. The range includes an estimate of one months operating results from its acquisitions of North Star Steel Monroe and TruSeal Technologies. Quanex is experiencing strong demand and expects significantly higher volumes for the quarter compared to the year ago period at both Nichols Aluminum and MACSTEEL, excluding Monroes results. However, because of the ongoing escalation of scrap prices, particularly steel scrap prices at MACSTEEL, margin compression will negatively impact earnings. MACSTEEL has scrap surcharges in place with customers, but recovery from the surcharge lags actual scrap costs by one quarter.
The Vehicular Products segment, which includes MACSTEEL, Piper Impact and Temroc Metals, expects higher shipments and lower operating income, excluding Monroes results, when compared to last years first quarter. MACSTEEL, the largest division within the segment, expects to report higher sales and volumes, excluding Monroes results, even though North American light vehicle builds for the quarter versus a year ago are expected to be down slightly. Offsetting the lower light vehicle builds is improved business in MACSTEELs secondary markets, including the heavy duty truck market, which continues to show improvement over last year. Operating income for MACSTEEL, excluding Monroes results, will be down from a year ago, due to sharply higher scrap costs.
The Building Products segment, which includes Engineered Products and Nichols Aluminum, is expected to report higher sales and flat operating income, excluding TruSeals results, versus last years first quarter. Engineered Products, excluding TruSeals results, expects to report similar sales and operating income compared to last years excellent results. However, customer demand continues to be weather sensitive. Nichols Aluminum looks to report higher shipments for the quarter, while operating income is expected to be about equal to this period last year. Nichols continues to experience spread compression due to higher scrap costs, but encouragingly, pricing in the industry is now firming.
The primary drivers for the Companys products are North American light vehicle builds, heavy duty truck builds, housing starts and remodeling expenditures. Quanex expects the light vehicle build rate for fiscal 2004 to be some 16.2 million units, essentially the same compared to 2003. Both housing starts and remodeling expenditures are expected to be flat to down slightly from last years robust levels and the Company believes that the underlying fundamentals remain excellent.
The integration of the Companys two recent acquisitions is proceeding well. Quanex remains confident in the earnings accretion that will result from its purchases. For the ten months it will
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have owned the acquisitions in fiscal 2004, Quanex expects to generate $0.40 - $0.50 of earnings on a diluted per share basis.
There is ongoing uncertainty surrounding the price escalation of both steel and aluminum scrap and the timing of the Companys eventual recovery of these costs. Therefore, while the Company is optimistic that it will report higher annual earnings in 2004 versus 2003, providing specific guidance this early in the year is problematic given the continued spiking in the cost of scrap.
Statements that use the words expect, should, will, might, or similar words reflecting future expectations or beliefs are forward-looking statements. The statements 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 Companys future performance, please refer to the Companys most recent 10-K filing of December 29, 2003 under the Securities Exchange Act of 1934, in particular the sections titled, Private Securities Litigation Reform Act contained therein. It is the Companys intention to make this release a routine event, once per quarter, approximately one month before it releases its quarterly earnings report.
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