View:
Download DOC
Download PDF
Download XLS
Download XBRL
Form 8-K
0001423221 False 0001423221 2023-08-31 2023-08-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

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):  August 31, 2023

_______________________________

Quanex Building Products Corporation

(Exact name of registrant as specified in its charter)

_______________________________

Delaware001-3391326-1561397
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

1800 West Loop South, Suite 1500

Houston, Texas 77027

(Address of Principal Executive Offices) (Zip Code)

(713) 961-4600

(Registrant's telephone number, including area code)

 

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareNXNew York Stock Exchange

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).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

On August 31, 2023, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.
      
99.1 Press Release dated August 31, 2023
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: August 31, 2023By: /s/ SCOTT ZUEHLKE        
  Scott Zuehlke
  SVP, CFO and Treasurer
  

 
EdgarFiling

EXHIBIT 99.1

Quanex Building Products Announces Third Quarter 2023 Results and Updates Full Year 2023 Guidance

Record Quarter for Earnings
Margin Expansion Across All Operating Segments
Repaid $25 Million in Bank Debt
Balance Sheet and Liquidity Remain Strong
Solid Improvement in Cash Provided by Operating Activities

HOUSTON, Aug. 31, 2023 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2023.  

The Company reported the following selected financial results:

 Three Months Ended July 31, Nine Months Ended July 31,
($ in millions, except per share data)2023 2022 2023 2022
Net Sales$299.6 $324.0 $835.1 $914.0
Gross Margin$78.6 $72.6 $197.5 $201.0
Gross Margin %26.2% 22.4% 23.7% 22.0%
Net Income$31.7 $25.9 $55.1 $63.7
Diluted EPS$0.96 $0.78 $1.67 $1.91
        
Adjusted Net Income$31.9 $26.2 $59.7 $64.0
Adjusted Diluted EPS$0.97 $0.79 $1.81 $1.92
Adjusted EBITDA$48.5 $44.2 $108.8 $113.8
Adjusted EBITDA Margin %16.2% 13.6% 13.0% 12.5%
        
Cash Provided by Operating Activities$64.1 $51.7 $102.6 $49.9
Free Cash Flow$56.7 $46.0 $80.1 $30.4

(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and reconciliation tables for additional information)

George Wilson, President and Chief Executive Officer, stated, “The results we reported for the three months ended July 31, 2023 were a record for Quanex from both an earnings and margin perspective. Demand continued to improve across all product lines during the third quarter of this year compared to the first half of the year. In addition, we believe the customer inventory rebalancing that impacted results in our fenestration segments in the first half have subsided and did not affect third quarter results.

“When compared to the third quarter of 2022, revenue declined in the third quarter of 2023 across all operating segments as ongoing macroeconomic challenges led to market volume declines and some pricing pressure, mostly due to surcharge rollbacks and index pricing decreases in North America as raw material costs declined. Despite this pressure on the topline, we converted well and realized margin expansion across all operating segments. Our continued focus on operational efficiency proved beneficial and our ability to flex our cost structure to meet demand trends across product lines also helped improve our profitability during the quarter.

“We continue to do a good job of managing working capital and generating cash, which enabled us to pay down our bank debt by $25 million during the third quarter. In fact, we are currently on track to generate record free cash flow this year. In addition, our balance sheet remains strong, and our leverage ratio improved compared to the second quarter of this year.” (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

Third Quarter 2023 Results Summary   

The Company reported net sales of $299.6 million during the three months ended July 31, 2023, which represents a decrease of 7.5% compared to $324.0 million for the same period of 2022. The decrease was mostly attributable to softer market demand and lower pricing in North America.   Quanex realized a decline in net sales of 4.1% for the third quarter of 2023 in its North American Fenestration segment. Excluding the contribution from the LMI Custom Mixing assets we acquired on November 1, 2022, net sales in the North American Fenestration segment would have declined by 14.9% year-over-year. The Company reported a decline in net sales of 23.6% in its North American Cabinet Components segment and a decrease of 2.8% in net sales in its European Fenestration segment, excluding foreign exchange impact. (See Sales Analysis table for additional information)

The increase in earnings for the three months ended July 31, 2023 was largely attributable to operational efficiency gains, cost control and a decrease in income tax expense. As such, Quanex was able to realize margin expansion in each of its operating segments and on a consolidated basis.

Balance Sheet Update

As of July 31, 2023, Quanex had total debt of $110.8 million ($57.9 million excluding real-estate leases that are considered “finance” leases under U.S. GAAP) and the Company’s leverage ratio of Net Debt to LTM Adjusted EBITDA decreased to 0.3x (Net Debt free excluding these real-estate leases). As of July 31, 2023, Quanex’s LTM Adjusted EBITDA was $147.5 million and LTM Net Income, the most directly comparable GAAP measure, was $79.8 million.   (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)

Outlook        

Mr. Wilson commented, “We were cautiously optimistic heading into the second half of our fiscal year based on our belief that we were seeing a return to normal seasonality. Our third quarter results reinforced that belief. Based on our results year-to-date, combined with our operational execution, recent demand trends and conversations with our customers, we are updating our guidance for fiscal 2023. On a consolidated basis for fiscal 2023, we currently estimate that we will generate net sales of approximately $1.125 billion, which is towards the lower end of prior guidance as indicated on our last earnings call; however, we are increasing our Adjusted EBITDA* guidance to $150 million to $155 million.

Our capital allocation priorities continue to be generating cash, paying down debt, evaluating growth opportunities and opportunistically buying back our stock.”

*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 also scheduled a conference call for Friday, September 1, 2023 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/BI9e428e0cc86a46139a82d87ee6276d56

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, 2022, 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 July 31, Nine Months Ended July 31,
  2023 2022 2023 2022
         
Net sales $299,640  $324,037  $835,091  $913,970 
Cost of sales  221,065   251,446   637,586   712,931 
Selling, general and administrative  30,516   28,822   94,631   87,774 
Depreciation and amortization  10,596   9,734   31,672   30,554 
Operating income  37,463   34,035   71,202   82,711 
Interest expense  (2,068)  (724)  (6,571)  (1,849)
Other, net  402   398   591   905 
Income before income taxes  35,797   33,709   65,222   81,767 
Income tax expense  (4,099)  (7,801)  (10,103)  (18,098)
Net income $31,698  $25,908  $55,119  $63,669 
         
Earnings per common share, basic $0.97  $0.79  $1.68  $1.92 
Earnings per common share, diluted $0.96  $0.78  $1.67  $1.91 
         
Weighted average common shares outstanding:        
Basic  32,716   32,999   32,841   33,093 
Diluted  32,919   33,173   33,031   33,256 
         
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, 2023 October 31, 2022
ASSETS    
Current assets:    
Cash and cash equivalents $73,252  $55,093 
Accounts receivable, net  96,204   96,018 
Inventories, net  105,368   120,890 
Prepaid and other current assets  12,764   8,664 
Total current assets  287,588   280,665 
Property, plant and equipment, net  245,912   180,400 
Operating lease right-of-use assets  45,804   56,000 
Goodwill  186,409   137,855 
Intangible assets, net  78,617   65,035 
Other assets  3,479   4,662 
Total assets $847,809  $724,617 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $71,464  $77,907 
Accrued liabilities  54,237   52,114 
Income taxes payable  -   1,049 
Current maturities of long-term debt  2,278   1,046 
Current operating lease liabilities  7,388   7,727 
Total current liabilities  135,367   139,843 
Long-term debt  107,234   29,628 
Noncurrent operating lease liabilities  39,291   49,286 
Deferred pension benefits  -   3,917 
Deferred income taxes  23,741   22,277 
Other liabilities  16,221   14,831 
Total liabilities  321,854   259,782 
Stockholders’ equity:    
Common stock  372   372 
Additional paid-in-capital  250,882   251,947 
Retained earnings  384,623   337,456 
Accumulated other comprehensive loss  (31,890)  (49,422)
Treasury stock at cost  (78,032)  (75,518)
Total stockholders’ equity  525,955   464,835 
Total liabilities and stockholders' equity $847,809  $724,617 
     


 
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
    
 Nine Months Ended July 31,
 2023 2022
Operating activities:   
Net income$55,119  $63,669 
Adjustments to reconcile net income to cash provided by operating activities:   
Depreciation and amortization 31,672   30,554 
Loss on the disposition of capital assets   
Stock-based compensation 1,828   1,707 
Deferred income tax 177   505 
Other, net 2,423   2,647 
Changes in assets and liabilities:   
Decrease (increase) in accounts receivable 9,918   (5,306)
Decrease (increase) in inventory 23,864   (48,280)
Increase in other current assets (439)  (824)
(Decrease) increase in accounts payable (15,471)  2,765 
Decrease in accrued liabilities (5,152)  (4,721)
(Decrease) increase in income taxes payable (3,534)  7,522 
Increase (decrease) in deferred pension benefits 22   (239)
Increase in other long-term liabilities 609   32 
Other, net 1,523   (177)
Cash provided by operating activities 102,559   49,854 
Investing activities:   
Business acquisition (91,302)  - 
Capital expenditures (22,450)  (19,488)
Proceeds from disposition of capital assets 183   134 
Cash used for investing activities (113,569)  (19,354)
Financing activities:   
Borrowings under credit facilities 102,000   70,500 
Repayments of credit facility borrowings (60,000)  (70,500)
Debt issuance costs -   (1,210)
Repayments of other long-term debt (1,954)  (1,301)
Common stock dividends paid (7,952)  (7,916)
Issuance of common stock 753   502 
Payroll tax paid to settle shares forfeited upon vesting of stock (567)  (1,412)
Purchase of treasury stock (5,593)  (6,600)
Cash provided by (used for) financing activities 26,687   (17,937)
Effect of exchange rate changes on cash and cash equivalents 2,482   (2,594)
Decrease in cash and cash equivalents 18,159   9,969 
Cash and cash equivalents at beginning of period 55,093   40,061 
Cash and cash equivalents at end of period$73,252  $50,030 
    


 
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 July 31, Nine Months Ended July 31,
 2023 2022 2023 2022
Cash provided by operating activities$64,099 $51,735 $102,559 $49,854
Capital expenditures(7,376) (5,703) (22,450) (19,488)
Free Cash Flow$56,723 $46,032 $80,109 $30,366
        
        
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,  
 2023 2022    
Revolving credit facility$55,000 $38,000    
Finance lease obligations(1)55,792 20,105    
Total debt(2)110,792 58,105    
Less: Cash and cash equivalents73,252 50,030    
Net Debt$37,540 $8,075    
        
(1) Includes $52.9 million and $18.8 million in real estate lease liabilities considered finance leases under U.S. GAAP as of July 31, 2023 and July 31, 2022, respectively.
(2) Excludes outstanding letters of credit.
        


 
QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
LAST TWELVE MONTHS ADJUSTED EBITDA RECONCILIATION
(In thousands, except per share data)
(Unaudited)
           
Reconciliation of Last Twelve Months Adjusted EBITDA Three Months Ended July 31, 2023 Three Months Ended April 30, 2023 Three Months Ended January 31, 2023 Three Months Ended October 31, 2022 Total
  Reconciliation Reconciliation Reconciliation Reconciliation Reconciliation
Net income as reported $31,698  $21,512 $1,909  $24,667  $79,786 
Income tax expense  4,099   5,551  453   3,329   13,432 
Other, net  (402)  29  (218)  (136)  (727)
Interest expense  2,068   2,244  2,259   710   7,281 
Depreciation and amortization  10,596   10,456  10,620   9,555   41,227 
EBITDA  48,059   39,792  15,023   38,125   140,999 
Cost of sales(1)  -   48  -   -   48 
Selling, general and administrative(1),(2)  395   63  5,448   564   6,470 
Adjusted EBITDA $48,454  $39,903 $20,471  $38,689  $147,517 
           
(1) Loss on damage to manufacturing facilities caused by weather.
(2) Transaction and advisory fees.
           


                          
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
July 31, 2023
 Three Months Ended
July 31, 2022
 Nine Months Ended
July 31, 2023
 Nine Months Ended
July 31, 2022
 
  Net Income
 Diluted EPS
 Net Income
 Diluted EPS
 Net Income
 Diluted EPS
 Net Income
 Diluted EPS
 
Net income as reported $ 31,698  $ 0.96  $ 25,908  $ 0.78  $ 55,119  $ 1.67  $ 63,669  $ 1.91  
Net income reconciling items from below 201  $ 0.01  257  $ 0.01  4,550  $ 0.14  291  $ 0.01  
Adjusted net income and adjusted EPS $ 31,899  $ 0.97  $ 26,165  $ 0.79  $ 59,669  $ 1.81  $ 63,960  $ 1.92  
                          
Reconciliation of Adjusted EBITDA Three Months Ended
July 31, 2023
 Three Months Ended
July 31, 2022
 Nine Months Ended
July 31, 2023
 Nine Months Ended
July 31, 2022
 
  Reconciliation
    Reconciliation
    Reconciliation
    Reconciliation
    
Net income as reported $ 31,698     $ 25,908     $ 55,119     $ 63,669     
Income tax expense 4,099     7,801     10,103     18,098     
Other, net (402)    (398)    (591)    (905)    
Interest expense 2,068     724     6,571     1,849     
Depreciation and amortization 10,596     9,734     31,672     30,554     
EBITDA 48,059     43,769     102,874     113,265     
EBITDA reconciling items from below 395     419     5,954     550     
Adjusted EBITDA $ 48,454     $ 44,188     $ 108,828     $ 113,815     
                          
Reconciling Items Three Months Ended
July 31, 2023
 Three Months Ended
July 31, 2022
 Nine Months Ended
July 31, 2023
 Nine Months Ended
July 31, 2022
 
  Income Statement
 Reconciling Items
 Income Statement
 Reconciling Items
 Income Statement
 Reconciling Items
 Income Statement
 Reconciling Items
 
Net sales $ 299,640  $-  $ 324,037  $-  $ 835,091  $-  $ 913,970  $-  
Cost of sales 221,065  -  251,446  -  637,586  (48)(1)712,931  -  
Selling, general and administrative 30,516  (395)(2)28,822  (419)(2)94,631  (5,906) (1),(2)87,774  (550)(2)
EBITDA 48,059  395  43,769  419  102,874  5,954  113,265  550  
Depreciation and amortization 10,596  -  9,734  -  31,672  -  30,554  -  
Operating income 37,463  395  34,035  419  71,202  5,954  82,711  550  
Interest expense (2,068)  -  (724)  -  (6,571)  -  (1,849)  -  
Other, net 402  (126) (3)398  (82) (3)591  (36) (3)905  (164) (3)
Income before income taxes 35,797  269  33,709  337  65,222  5,918  81,767  386  
Income tax expense (4,099)  (68) (4)(7,801)  (80) (4)(10,103)  (1,368) (4)(18,098)  (95) (4)
Net income $ 31,698  $ 201  $ 25,908  $ 257  $ 55,119  $ 4,550  $ 63,669  $ 291  
                          
Diluted earnings per share $ 0.96     $ 0.78     $ 1.67     $ 1.91     
                          
(1) Loss on damage to manufacturing facilities caused by weather.
(2) Transaction and advisory fees.
(3) Foreign currency transaction gains.
(4)Tax impact of net income reconciling items.
 


 
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, 2023          
Net sales $177,081  $67,889  $55,385  $(715) $299,640 
Cost of sales  135,126   41,266   44,935   (262)  221,065 
Gross Margin  41,955   26,623   10,450   (453)  78,575 
Gross Margin %  23.7%  39.2%  18.9%    26.2%
Selling, general and administrative  14,254   8,039   5,095   3,128   30,516 
Depreciation and amortization  5,033   2,434   3,084   45   10,596 
Operating income (loss)  22,668   16,150   2,271   (3,626)  37,463 
Depreciation and amortization  5,033   2,434   3,084   45   10,596 
EBITDA  27,701   18,584   5,355   (3,581)  48,059 
Transaction and advisory fees  -   -   -   395   395 
Adjusted EBITDA $27,701  $18,584  $5,355  $(3,186) $48,454 
Adjusted EBITDA Margin %  15.6%  27.4%  9.7%    16.2%
           
Three months ended July 31, 2022          
Net sales $184,744  $67,613  $72,480  $(800) $324,037 
Cost of sales  142,970   47,212   61,543   (279)  251,446 
Gross Margin  41,774   20,401   10,937   (521)  72,591 
Gross Margin %  22.6%  30.2%  15.1%    22.4%
Selling, general and administrative  14,644   8,256   5,335   587   28,822 
Depreciation and amortization  4,044   2,327   3,273   90   9,734 
Operating income (loss)  23,086   9,818   2,329   (1,198)  34,035 
Depreciation and amortization  4,044   2,327   3,273   90   9,734 
EBITDA  27,130   12,145   5,602   (1,108)  43,769 
Transaction and advisory fees  -   -   -   419   419 
Adjusted EBITDA $27,130  $12,145  $5,602  $(689) $44,188 
Adjusted EBITDA Margin %  14.7%  18.0%  7.7%    13.6%
           
Nine months ended July 31, 2023          
Net sales $487,036  $186,604  $163,577  $(2,126) $835,091 
Cost of sales  382,315   119,421   136,722   (872)  637,586 
Gross Margin  104,721   67,183   26,855   (1,254)  197,505 
Gross Margin %  21.5%  36.0%  16.4%    23.7%
Selling, general and administrative  41,707   23,996   15,939   12,989   94,631 
Depreciation and amortization  15,328   7,135   8,988   221   31,672 
Operating income (loss)  47,686   36,052   1,928   (14,464)  71,202 
Depreciation and amortization  15,328   7,135   8,988   221   31,672 
EBITDA  63,014   43,187   10,916   (14,243)  102,874 
Loss on damage to manufacturing facilities (Cost of sales)  35   -   13   -   48 
Loss on damage to manufacturing facilities (SG&A)  -   -   200   -   200 
Transaction and advisory fees  -   -   -   5,706   5,706 
Adjusted EBITDA $63,049  $43,187  $11,129  $(8,537) $108,828 
Adjusted EBITDA Margin %  12.9%  23.1%  6.8%    13.0%
           
Nine months ended July 31, 2022          
Net sales $509,283  $199,954  $207,711  $(2,978) $913,970 
Cost of sales  396,505   138,147   179,791   (1,512)  712,931 
Gross Margin  112,778   61,807   27,920   (1,466)  201,039 
Gross Margin %  22.1%  30.9%  13.4%    22.0%
Selling, general and administrative  43,099   24,160   15,823   4,692   87,774 
Depreciation and amortization  12,221   7,418   10,653   262   30,554 
Operating income (loss)  57,458   30,229   1,444   (6,420)  82,711 
Depreciation and amortization  12,221   7,418   10,653   262   30,554 
EBITDA  69,679   37,647   12,097   (6,158)  113,265 
Transaction and advisory fees  -   -   -   550   550 
Adjusted EBITDA $69,679  $37,647  $12,097  $(5,608) $113,815 
Adjusted EBITDA Margin %  13.7%  18.8%  5.8%    12.5%
           


 
QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)
         
  Three Months Ended July 31, Nine Months Ended July 31,
  2023 2022 2023 2022
         
NA Fenestration:(1)       
 United States - fenestration$138,090  $162,215  $379,613  $447,425 
 International - fenestration 8,542   10,722   22,019   30,952 
 United States - non-fenestration 26,423   8,324   73,823   22,117 
 International - non-fenestration 4,026   3,483   11,581   8,789 
  $177,081  $184,744  $487,036  $509,283 
EU Fenestration:(2)       
 International - fenestration$51,752  $49,041  $142,009  $148,525 
 International - non-fenestration 16,137   18,572   44,595   51,429 
  $67,889  $67,613  $186,604  $199,954 
NA Cabinet Components:       
 United States - fenestration$4,486  $4,857  $12,613  $13,288 
 United States - non-fenestration 50,199   66,758   148,774   191,908 
 International - non-fenestration 700   865   2,190   2,515 
  $55,385  $72,480  $163,577  $207,711 
Unallocated Corporate & Other:       
 Eliminations$(715) $(800) $(2,126) $(2,978)
  $(715) $(800) $(2,126) $(2,978)
         
Net Sales$299,640  $324,037  $835,091  $913,970 
         
(1) Includes the net sales from the acquisition of LMI of $19.8 million and $54.0 million for the three and nine months ended July 31, 2023, respectively.
(2) Reflects an increase of $2.2 million and a reduction of $8.6 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2023, respectively.