UNITED STATES
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CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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On December 15, 2022, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| 99.1 | Press Release dated December 15, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Quanex Building Products Corporation | ||
| Date: December 15, 2022 | By: | /s/ SCOTT ZUEHLKE |
| Scott Zuehlke | ||
| SVP, CFO and Treasurer | ||
EXHIBIT 99.1
Quanex Building Products Announces Fourth Quarter and Fiscal Year 2022 Results
Another Year of Record Revenue and Earnings
Strong Free Cash Flow
Repaid $25 Million in Bank Debt in 4Q22
Balance Sheet and Liquidity Remain Strong
HOUSTON, Dec. 15, 2022 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months and twelve months ended October 31, 2022.
The Company reported the following selected financial results:
| Three Months Ended October 31, | Twelve Months Ended October 31, | |||||||
| ($ in millions, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||
| Net Sales | $307.5 | $291.8 | $1,221.5 | $1,072.1 | ||||
| Gross Margin | $67.5 | $65.0 | $268.5 | $240.6 | ||||
| Gross Margin % | 21.9% | 22.3% | 22.0% | 22.4% | ||||
| Net Income | $24.7 | $20.9 | $88.3 | $57.0 | ||||
| Diluted EPS | $0.75 | $0.62 | $2.66 | $1.70 | ||||
| Adjusted Net Income | $25.0 | $20.8 | $88.9 | $58.6 | ||||
| Adjusted Diluted EPS | $0.75 | $0.62 | $2.68 | $1.75 | ||||
| Adjusted EBITDA | $38.7 | $37.3 | $152.5 | $126.8 | ||||
| Adjusted EBITDA Margin % | 12.6% | 12.8% | 12.5% | 11.8% | ||||
| Cash Provided by Operating Activities | $48.1 | $31.2 | $98.0 | $78.6 | ||||
| Free Cash Flow | $34.5 | $23.2 | $64.8 | $54.6 | ||||
(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, commented, “We reported another year of record revenue and earnings. Our employees stepped up and performed extremely well throughout the year, despite having to navigate challenges related to the supply chain, inflation, and labor. Overall, our solid results for the fourth quarter and full year reflected the benefit from our pass-through pricing strategy. Volumes increased in our North American Fenestration segment during the fourth quarter, but volumes decreased in our other operating segments and foreign exchange had a negative impact.
“Free Cash Flow increased significantly during the fourth quarter of this year compared to the same period last year. We were able to repay $25 million of bank debt during the quarter and our balance sheet remains strong.” (See Non-GAAP Terminology Definitions and Disclaimers section and the reconciliation of Free Cash Flow to cash provided by operating activities for additional information)
Fourth Quarter and Fiscal 2022 Results Summary
Quanex reported net sales of $307.5 million during the three months ended October 31, 2022, which represents growth of 5.4% compared to $291.8 million for the same period of 2021. The Company reported net sales of $1.22 billion during the twelve months ended October 31, 2022, which represents growth of 13.9% compared to $1.07 billion for the same period of 2021. The increases were primarily attributable to higher prices related to the pass through of raw material cost inflation. The Company realized net sales growth of 14.0% for the fourth quarter of 2022 and 18.9% for the full year in its North American Fenestration segment. In its North American Cabinet Components segment, Quanex reported net sales growth of 2.1% for the fourth quarter and 12.0% for the full year. Excluding the foreign exchange impact, the Company realized 5.2% and 14.2% net sales growth for the fourth quarter and full year, respectively, in its European Fenestration segment. (See Sales Analysis table for additional information)
The increase in earnings for the three months and twelve months ended October 31, 2022 was mostly due to increased pricing and surcharges related to the pass through of raw material cost inflation and higher volumes in the North American Fenestration segment. In addition, because of updates to taxable differences for Global Intangible Low-Taxed Income (GILTI), non-cash compensation, and bonus depreciation, the Company had a return to provision tax benefit of approximately $6 million in fiscal 2022.
Balance Sheet & Liquidity Update
As of October 31, 2022, Quanex had total debt of $13.0 million and its leverage ratio of Net Debt to LTM Adjusted EBITDA improved to (0.2x), or net debt free. (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)
The Company’s liquidity increased to $362.0 million as of October 31, 2022, consisting of $55.1 million in cash on hand plus availability under its new Amended and Restated Senior Secured Revolving Credit Facility due 2027, less letters of credit outstanding.
Share Repurchases
Quanex’s Board authorized a $75 million share repurchase program in December of 2021. 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 Company was in possession of material non-public information related to the previously disclosed acquisition of LMI Custom Mixing, LLC assets and therefore was not able to repurchase any shares of common stock during the three months ended October 31, 2022. As of October 31, 2022, approximately $68.4 million remained under the existing share repurchase authorization.
Outlook
Mr. Wilson stated, “As previously disclosed, we acquired the assets of LMI Custom Mixing, LLC on November 1, 2022 for $92 million in cash. This acquisition fits the profitable growth strategy we unveiled when we reported earnings for the third quarter, and we look forward to realizing the related synergies. Our balance sheet remains strong even after accounting for the recent acquisition, and we are committed to executing on our plan and creating further value for shareholders.
Our long-term view continues to be optimistic as the underlying fundamentals for the residential housing market remain positive. However, like last year, based on current macro indicators and recent conversations with our customers, we are taking a measured approach to 2023 guidance. As such, we believe it would be premature to give guidance at this time. We intend to re-visit guidance when we report earnings for the first quarter.”
Conference Call and Webcast Information
The Company has also scheduled a conference call for Friday, December 16, 2022 at 11:00 a.m. ET (10:00 a.m. CT) to discuss the release. A link to the live audio webcast will be available on Quanex’s website at http://www.quanex.com in the Investors section under Presentations & Events.
Participants can pre-register for the conference call using the following link: https://register.vevent.com/register/BI3e2f1725ab404b78b247eb855d31576a
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 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 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. 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 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, 2021, 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.
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) | ||||||||||||||||
| Three Months Ended October 31, | Twelve Months Ended October, 31 | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net sales | $ | 307,532 | $ | 291,768 | $ | 1,221,502 | $ | 1,072,149 | ||||||||
| Cost of sales | 240,073 | 226,818 | 953,004 | 831,541 | ||||||||||||
| Selling, general and administrative | 29,334 | 27,668 | 117,108 | 115,967 | ||||||||||||
| Restructuring charges | - | - | - | 39 | ||||||||||||
| Depreciation and amortization | 9,555 | 10,189 | 40,109 | 42,732 | ||||||||||||
| Operating income | 28,570 | 27,093 | 111,281 | 81,870 | ||||||||||||
| Interest expense | (710 | ) | (542 | ) | (2,559 | ) | (2,530 | ) | ||||||||
| Other, net | 136 | 109 | 1,041 | 754 | ||||||||||||
| Income before income taxes | 27,996 | 26,660 | 109,763 | 80,094 | ||||||||||||
| Income tax expense | (3,329 | ) | (5,762 | ) | (21,427 | ) | (23,114 | ) | ||||||||
| Net income | $ | 24,667 | $ | 20,898 | $ | 88,336 | $ | 56,980 | ||||||||
| Earnings per common share, basic | $ | 0.75 | $ | 0.63 | $ | 2.67 | $ | 1.72 | ||||||||
| Earnings per common share, diluted | $ | 0.75 | $ | 0.62 | $ | 2.66 | $ | 1.70 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 32,916 | 33,191 | 33,048 | 33,193 | ||||||||||||
| Diluted | 33,082 | 33,454 | 33,205 | 33,495 | ||||||||||||
| Cash dividends per share | $ | 0.08 | $ | 0.08 | $ | 0.32 | $ | 0.32 | ||||||||
| QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | ||||||||
| October 31, 2022 | October 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 55,093 | $ | 40,061 | ||||
| Accounts receivable, net | 96,018 | 108,309 | ||||||
| Inventories, net | 120,890 | 92,529 | ||||||
| Prepaid and other current assets | 8,664 | 8,148 | ||||||
| Total current assets | 280,665 | 249,047 | ||||||
| Property, plant and equipment, net | 180,400 | 178,630 | ||||||
| Operating lease right-of-use assets | 56,000 | 52,708 | ||||||
| Goodwill | 137,855 | 149,205 | ||||||
| Intangible assets, net | 65,035 | 82,410 | ||||||
| Other assets | 4,662 | 5,323 | ||||||
| Total assets | $ | 724,617 | $ | 717,323 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 77,907 | $ | 86,765 | ||||
| Accrued liabilities | 52,114 | 56,156 | ||||||
| Income taxes payable | 1,049 | 6,038 | ||||||
| Current maturities of long-term debt | 1,046 | 846 | ||||||
| Current operating lease liabilities | 7,727 | 8,196 | ||||||
| Total current liabilities | 139,843 | 158,001 | ||||||
| Long-term debt | 29,628 | 52,094 | ||||||
| Noncurrent operating lease liabilities | 49,286 | 45,367 | ||||||
| Deferred pension and postretirement benefits | 3,917 | 4,737 | ||||||
| Deferred income taxes | 22,277 | 21,965 | ||||||
| Liabilities for uncertain tax positions | 1,361 | 1,388 | ||||||
| Other liabilities | 13,470 | 13,989 | ||||||
| Total liabilities | 259,782 | 297,541 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 372 | 373 | ||||||
| Additional paid-in-capital | 251,947 | 254,162 | ||||||
| Retained earnings | 337,456 | 259,718 | ||||||
| Accumulated other comprehensive loss | (49,422 | ) | (21,770 | ) | ||||
| Treasury stock at cost | (75,518 | ) | (72,701 | ) | ||||
| Total stockholders’ equity | 464,835 | 419,782 | ||||||
| Total liabilities and stockholders' equity | $ | 724,617 | $ | 717,323 | ||||
| QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands) (Unaudited) | ||||||||
| Twelve Months Ended October, 31 | ||||||||
| 2022 | 2021 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 88,336 | $ | 56,980 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
| Depreciation and amortization | 40,109 | 42,732 | ||||||
| Loss on the disposition of capital assets | 109 | 3,039 | ||||||
| Stock-based compensation | 2,291 | 1,970 | ||||||
| Deferred income tax | 2,097 | 1,785 | ||||||
| Other, net | 1,905 | 2,126 | ||||||
| Changes in assets and liabilities: | ||||||||
| Decrease (increase) in accounts receivable | 6,945 | (19,017 | ) | |||||
| Increase in inventory | (32,035 | ) | (31,382 | ) | ||||
| Increase in other current assets | (970 | ) | (1,817 | ) | ||||
| (Decrease) increase in accounts payable | (3,047 | ) | 7,097 | |||||
| (Decrease) increase in accrued liabilities | (3,159 | ) | 16,212 | |||||
| Decrease in income taxes payable | (5,192 | ) | (378 | ) | ||||
| Increase (decrease) in deferred pension and postretirement benefits | 77 | (708 | ) | |||||
| Increase in other long-term liabilities | 305 | 477 | ||||||
| Other, net | 194 | (528 | ) | |||||
| Cash provided by operating activities | 97,965 | 78,588 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (33,121 | ) | (24,008 | ) | ||||
| Proceeds from disposition of capital assets | 159 | 5,300 | ||||||
| Cash used for investing activities | (32,962 | ) | (18,708 | ) | ||||
| Financing activities: | ||||||||
| Borrowings under credit facilities | 70,500 | - | ||||||
| Repayments of credit facility borrowings | (95,500 | ) | (65,000 | ) | ||||
| Debt issuance costs | (1,210 | ) | - | |||||
| Repayments of other long-term debt | (1,747 | ) | (680 | ) | ||||
| Common stock dividends paid | (10,598 | ) | (10,779 | ) | ||||
| Issuance of common stock | 689 | 16,272 | ||||||
| Payroll tax paid to settle shares forfeited upon vesting of stock | (1,413 | ) | (492 | ) | ||||
| Purchase of treasury stock | (6,600 | ) | (11,182 | ) | ||||
| Cash used for financing activities | (45,879 | ) | (71,861 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (4,092 | ) | 421 | |||||
| Increase (decrease) in cash and cash equivalents | 15,032 | (11,560 | ) | |||||
| Cash and cash equivalents at beginning of period | 40,061 | 51,621 | ||||||
| Cash and cash equivalents at end of period | $ | 55,093 | $ | 40,061 | ||||
| QUANEX BUILDING PRODUCTS CORPORATION 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 October 31, | Twelve Months Ended October, 31 | |||||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Cash provided by operating activities | $48,111 | 31,153 | $97,965 | $78,588 | ||||
| Capital expenditures | (13,633) | (8,002) | (33,121) | (24,008) | ||||
| Free Cash Flow | $34,478 | $23,151 | $64,844 | $54,580 | ||||
| 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 October 31, | ||||||||
| 2022 | 2021 | |||||||
| Revolving credit facility | $13,000 | $38,000 | ||||||
| Finance lease obligations | 19,202 | 15,537 | ||||||
| Total debt (1) | 32,202 | 53,537 | ||||||
| Less: Cash and cash equivalents | 55,093 | 40,061 | ||||||
| Net Debt | ($22,891) | $13,476 | ||||||
| (1) Excludes outstanding letters of credit. | ||||||||
| QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE (In thousands, except per share data) (Unaudited) | |||||||||||||||||||||||||
| Reconciliation of Adjusted Net Income and Adjusted EPS | Three Months Ended October 31, 2022 | Three Months Ended October 31, 2021 | Twelve Months Ended October 31, 2022 | Twelve Months Ended October 31, 2021 | |||||||||||||||||||||
| Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | ||||||||||||||||||
| Net income as reported | $ | 24,667 | $ | 0.75 | $ | 20,898 | $ | 0.62 | $ | 88,336 | $ | 2.66 | $ | 56,980 | $ | 1.70 | |||||||||
| Net income reconciling items from below | 290 | $ - | (51) | $ - | 581 | $ | 0.02 | 1,609 | $ | 0.05 | |||||||||||||||
| Adjusted net income and adjusted EPS | $ | 24,957 | $ | 0.75 | $ | 20,847 | $ | 0.62 | $ | 88,917 | $ | 2.68 | $ | 58,589 | $ | 1.75 | |||||||||
| Reconciliation of Adjusted EBITDA | Three Months Ended October 31, 2022 | Three Months Ended October 31, 2021 | Twelve Months Ended October 31, 2022 | Twelve Months Ended October 31, 2021 | |||||||||||||||||||||
| Reconciliation | Reconciliation | Reconciliation | Reconciliation | ||||||||||||||||||||||
| Net income as reported | $ | 24,667 | $ | 20,898 | $ | 88,336 | $ | 56,980 | |||||||||||||||||
| Income tax expense | 3,329 | 5,762 | 21,427 | 23,114 | |||||||||||||||||||||
| Other, net | (136) | (109) | (1,041) | (754) | |||||||||||||||||||||
| Interest expense | 710 | 542 | 2,559 | 2,530 | |||||||||||||||||||||
| Depreciation and amortization | 9,555 | 10,189 | 40,109 | 42,732 | |||||||||||||||||||||
| EBITDA | 38,125 | 37,282 | 151,390 | 124,602 | |||||||||||||||||||||
| EBITDA reconciling items from below | 564 | - | 1,114 | 2,160 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 38,689 | $ | 37,282 | $ | 152,504 | $ | 126,762 | |||||||||||||||||
| Reconciling Items | Three Months Ended October 31, 2022 | Three Months Ended October 31, 2021 | Twelve Months Ended October 31, 2022 | Twelve Months Ended October 31, 2021 | |||||||||||||||||||||
| Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | ||||||||||||||||||
| Net sales | $ | 307,532 | $ | - | $ | 291,768 | $ | - | $ | 1,221,502 | $ - | $ | 1,072,149 | $ | - | ||||||||||
| Cost of sales | 240,073 | - | 226,818 | - | 953,004 | - | 831,541 | (307) | (1) | ||||||||||||||||
| Selling, general and administrative | 29,334 | (564) | (2) | 27,668 | - | 117,108 | (1,114) | (2) | 115,967 | (1,814) | (2) | ||||||||||||||
| Restructuring charges | - | - | - | - | - | - | 39 | (39) | (3) | ||||||||||||||||
| EBITDA | 38,125 | 564 | 37,282 | - | 151,390 | 1,114 | 124,602 | 2,160 | |||||||||||||||||
| Depreciation and amortization | 9,555 | - | 10,189 | - | 40,109 | - | 42,732 | - | |||||||||||||||||
| Operating income | 28,570 | 564 | 27,093 | - | 111,281 | 1,114 | 81,870 | 2,160 | |||||||||||||||||
| Interest expense | (710) | - | (542) | - | (2,559) | - | (2,530) | - | |||||||||||||||||
| Other, net | 136 | (222) | (4) | 109 | (63) | (4) | 1,041 | (386) | (4) | 754 | 98 | (4) | |||||||||||||
| Income before income taxes | 27,996 | 342 | 26,660 | (63) | 109,763 | 728 | 80,094 | 2,258 | |||||||||||||||||
| Income tax expense | (3,329) | (52) | (5) | (5,762) | 12 | (5) | (21,427) | (147) | (5) | (23,114) | (649) | (5) | |||||||||||||
| Net income | $ | 24,667 | $ | 290 | $ | 20,898 | $ | (51) | $ | 88,336 | $ | 581 | $ | 56,980 | $ | 1,609 | |||||||||
| Diluted earnings per share | $ | 0.75 | $ | 0.62 | $ | 2.66 | $ | 1.70 | |||||||||||||||||
| (1) Loss on damage to a plant caused by flooding. | |||||||||||||||||||||||||
| (2) Transaction and advisory fees, loss on sale of a plant of $1.8 million in the twelve months ended October 31, 2021. | |||||||||||||||||||||||||
| (3) Restructuring charges related to the closure of manufacturing plant facilities. | |||||||||||||||||||||||||
| (4) Foreign currency transaction (gains) losses. | |||||||||||||||||||||||||
| (5) Impact on a with and without basis. | |||||||||||||||||||||||||
| 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 October 31, 2022 | ||||||||||||||||||||
| Net sales | $ | 178,175 | $ | 62,104 | $ | 67,993 | $ | (740 | ) | $ | 307,532 | |||||||||
| Cost of sales | 141,395 | 42,121 | 56,904 | (347 | ) | 240,073 | ||||||||||||||
| Gross Margin | 36,780 | 19,983 | 11,089 | (393 | ) | 67,459 | ||||||||||||||
| Gross Margin % | 20.6 | % | 32.2 | % | 16.3 | % | 21.9 | % | ||||||||||||
| Selling, general and administrative | 15,636 | 7,686 | 6,111 | (99 | ) | 29,334 | ||||||||||||||
| Depreciation and amortization | 4,032 | 2,256 | 3,177 | 90 | 9,555 | |||||||||||||||
| Operating income (loss) | 17,112 | 10,041 | 1,801 | (384 | ) | 28,570 | ||||||||||||||
| Depreciation and amortization | 4,032 | 2,256 | 3,177 | 90 | 9,555 | |||||||||||||||
| EBITDA | 21,144 | 12,297 | 4,978 | (294 | ) | 38,125 | ||||||||||||||
| Transaction and advisory fees | - | - | - | 564 | 564 | |||||||||||||||
| Adjusted EBITDA | $ | 21,144 | $ | 12,297 | $ | 4,978 | $ | 270 | $ | 38,689 | ||||||||||
| Adjusted EBITDA Margin % | 11.9 | % | 19.8 | % | 7.3 | % | 12.6 | % | ||||||||||||
| Three months ended October 31, 2021 | ||||||||||||||||||||
| Net sales | $ | 156,255 | $ | 69,737 | $ | 66,583 | $ | (807 | ) | $ | 291,768 | |||||||||
| Cost of sales | 122,078 | 49,402 | 55,718 | (380 | ) | 226,818 | ||||||||||||||
| Gross Margin | 34,177 | 20,335 | 10,865 | (427 | ) | 64,950 | ||||||||||||||
| Gross Margin % | 21.9 | % | 29.2 | % | 16.3 | % | 22.3 | % | ||||||||||||
| Selling, general and administrative | 14,015 | 8,335 | 5,456 | (138 | ) | 27,668 | ||||||||||||||
| Depreciation and amortization | 4,202 | 2,602 | 3,298 | 87 | 10,189 | |||||||||||||||
| Operating income (loss) | 15,960 | 9,398 | 2,111 | (376 | ) | 27,093 | ||||||||||||||
| Depreciation and amortization | 4,202 | 2,602 | 3,298 | 87 | 10,189 | |||||||||||||||
| EBITDA | 20,162 | 12,000 | 5,409 | (289 | ) | 37,282 | ||||||||||||||
| Adjusted EBITDA | $ | 20,162 | $ | 12,000 | $ | 5,409 | $ | (289 | ) | $ | 37,282 | |||||||||
| Adjusted EBITDA Margin % | 12.9 | % | 17.2 | % | 8.1 | % | 12.8 | % | ||||||||||||
| Twelve months ended October 31, 2022 | ||||||||||||||||||||
| Net sales | $ | 687,458 | $ | 262,058 | $ | 275,704 | $ | (3,718 | ) | $ | 1,221,502 | |||||||||
| Cost of sales | 537,900 | 180,268 | 236,695 | (1,859 | ) | 953,004 | ||||||||||||||
| Gross Margin | 149,558 | 81,790 | 39,009 | (1,859 | ) | 268,498 | ||||||||||||||
| Gross Margin % | 21.8 | % | 31.2 | % | 14.1 | % | 22.0 | % | ||||||||||||
| Selling, general and administrative | 58,735 | 31,846 | 21,934 | 4,593 | 117,108 | |||||||||||||||
| Depreciation and amortization | 16,253 | 9,674 | 13,830 | 352 | 40,109 | |||||||||||||||
| Operating income (loss) | 74,570 | 40,270 | 3,245 | (6,804 | ) | 111,281 | ||||||||||||||
| Depreciation and amortization | 16,253 | 9,674 | 13,830 | 352 | 40,109 | |||||||||||||||
| EBITDA | 90,823 | 49,944 | 17,075 | (6,452 | ) | 151,390 | ||||||||||||||
| Transaction and advisory fees | - | - | - | 1,114 | 1,114 | |||||||||||||||
| Adjusted EBITDA | $ | 90,823 | $ | 49,944 | $ | 17,075 | $ | (5,338 | ) | $ | 152,504 | |||||||||
| Adjusted EBITDA Margin % | 13.2 | % | 19.1 | % | 6.2 | % | 12.5 | % | ||||||||||||
| Twelve months ended October 31, 2021 | ||||||||||||||||||||
| Net sales | $ | 578,332 | $ | 251,599 | $ | 246,075 | $ | (3,857 | ) | $ | 1,072,149 | |||||||||
| Cost of sales | 450,356 | 172,033 | 211,088 | (1,936 | ) | 831,541 | ||||||||||||||
| Gross Margin | 127,976 | 79,566 | 34,987 | (1,921 | ) | 240,608 | ||||||||||||||
| Gross Margin % | 22.1 | % | 31.6 | % | 14.2 | % | 22.4 | % | ||||||||||||
| Selling, general and administrative | 52,959 | 29,894 | 20,828 | 12,286 | 115,967 | |||||||||||||||
| Restructuring charges | 39 | - | - | - | 39 | |||||||||||||||
| Depreciation and amortization | 18,730 | 10,373 | 13,263 | 366 | 42,732 | |||||||||||||||
| Operating income (loss) | 56,248 | 39,299 | 896 | (14,573 | ) | 81,870 | ||||||||||||||
| Depreciation and amortization | 18,730 | 10,373 | 13,263 | 366 | 42,732 | |||||||||||||||
| EBITDA | 74,978 | 49,672 | 14,159 | (14,207 | ) | 124,602 | ||||||||||||||
| 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 | $ | 75,392 | $ | 49,979 | $ | 14,159 | $ | (12,768 | ) | $ | 126,762 | |||||||||
| Adjusted EBITDA Margin % | 13.0 | % | 19.9 | % | 5.8 | % | 11.8 | % | ||||||||||||
| QUANEX BUILDING PRODUCTS CORPORATION SALES ANALYSIS (In thousands) (Unaudited) | ||||||||||||||||
| Three Months Ended October 31, | Twelve Months Ended October, 31 | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| NA Fenestration: | ||||||||||||||||
| United States - fenestration | $ | 162,147 | $ | 137,825 | $ | 609,572 | $ | 507,634 | ||||||||
| International - fenestration | 4,954 | 8,854 | 35,906 | 34,610 | ||||||||||||
| United States - non-fenestration | 6,922 | 6,991 | 29,039 | 24,534 | ||||||||||||
| International - non-fenestration | 4,152 | 2,585 | 12,941 | 11,554 | ||||||||||||
| $ | 178,175 | $ | 156,255 | $ | 687,458 | $ | 578,332 | |||||||||
| EU Fenestration:(1) | ||||||||||||||||
| International - fenestration | $ | 46,329 | $ | 52,439 | $ | 194,854 | $ | 199,511 | ||||||||
| International - non-fenestration | 15,775 | 17,298 | 67,204 | 52,088 | ||||||||||||
| $ | 62,104 | $ | 69,737 | $ | 262,058 | $ | 251,599 | |||||||||
| NA Cabinet Components: | ||||||||||||||||
| United States - fenestration | $ | 4,408 | $ | 3,615 | $ | 17,696 | $ | 13,326 | ||||||||
| United States - non-fenestration | 62,818 | 62,251 | 254,726 | 230,559 | ||||||||||||
| International - non-fenestration | 767 | 717 | 3,282 | 2,190 | ||||||||||||
| $ | 67,993 | $ | 66,583 | $ | 275,704 | $ | 246,075 | |||||||||
| Unallocated Corporate & Other: | ||||||||||||||||
| Eliminations | $ | (740 | ) | $ | (807 | ) | $ | (3,718 | ) | $ | (3,857 | ) | ||||
| $ | (740 | ) | $ | (807 | ) | $ | (3,718 | ) | $ | (3,857 | ) | |||||
| Net Sales | $ | 307,532 | $ | 291,768 | $ | 1,221,502 | $ | 1,072,149 | ||||||||
| (1) Reflects reduction of $10.7 million and $22.1 million in revenue associated with foreign currency exchange rate impacts for the three and twelve months ended October 31, 2022, respectively. | ||||||||||||||||