Bay Street News

Quanex Building Products Announces Fourth Quarter and Full Year 2023 Results

Another Record Quarter for Earnings
Margin Expansion Across All Operating Segments
Repaid $40 Million in Bank Debt in Quarter
Balance Sheet and Liquidity Remain Strong
Record Year for Cash Provided by Operating Activities

HOUSTON, Dec. 14, 2023 (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, 2023.

The Company reported the following selected financial results:

      Three Months Ended October 31,   Twelve Months Ended October 31,
($ in millions, except per share data)     2023     2022     2023     2022  
Net Sales     $295.5     $307.5     $1,130.6     $1,221.5  
Gross Margin     $80.0     $67.5     $277.5     $268.5  
Gross Margin %     27.1%     21.9%     24.5%     22.0%  
Net Income     $27.4     $24.7     $82.5     $88.3  
Diluted EPS     $0.83     $0.75     $2.50     $2.66  
                   
Adjusted Net Income     $31.2     $25.0     $90.9     $88.9  
Adjusted Diluted EPS     $0.95     $0.75     $2.75     $2.68  
Adjusted EBITDA     $50.8     $38.7     $159.6     $152.5  
Adjusted EBITDA Margin %     17.2%     12.6%     14.1%     12.5%  
                   
Cash Provided by Operating Activities     $44.5     $48.1     $147.1     $98.0  
Free Cash Flow     $29.6     $34.5     $109.7     $64.8  

(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, commented, “We reported another record quarter for earnings and our balance sheet and liquidity remain strong. Despite pressure on revenue due to market volume softness related to ongoing macroeconomic challenges, and some pricing pressure as raw material costs declined, we converted very well and realized margin expansion across all operating segments in both the fourth quarter and the full year. Our continued focus on controlling what we can control helped drive our improved results and we believe we are hitting our stride from an operational standpoint. Overall, we are proud of what we were able to accomplish in 2023.

“Managing working capital and generating cash is a core focus of ours, which enabled us to pay down our bank debt by $40 million during the fourth quarter alone. In fact, we generated record free cash flow in 2023.” (See Non-GAAP Terminology Definitions and Disclaimers section and Free Cash Flow reconciliation table for additional information)

Fourth Quarter and Fiscal 2023 Results Summary

Quanex reported net sales of $295.5 million during the three months ended October 31, 2023, which represents a decrease of 3.9% compared to $307.5 million for the same period of 2022. The Company reported net sales of $1.13 billion during the twelve months ended October 31, 2023, which represents a decrease of 7.4% compared to $1.22 billion for the same period of 2022. The decreases were primarily attributable to softer market demand and lower pricing in North America. Quanex reported net sales growth of 1.3% for the fourth quarter of 2023 and a decline of 2.9% in net sales for the full year in its North American Fenestration segment. Excluding the contribution from the LMI Custom Mixing assets the Company acquired on November 1, 2022, net sales in the North American Fenestration segment would have declined by 10.7% for the fourth quarter and 13.9% for the full year. In its North American Cabinet Components segment, Quanex reported a decline of 23.7% in net sales for the fourth quarter and a decline of 21.9% in net sales for the full year. Excluding foreign exchange impact, the Company realized a decrease in net sales of 3.7% for the fourth quarter and a decrease of 2.8% in net sales for the full year in its European Fenestration segment. (See Sales Analysis table for additional information)

The increase in adjusted earnings for the three months and twelve months ended October 31, 2023 was largely attributable to effective cost control, real price increases, a decline in raw material costs and a decrease in income tax expense. As such, Quanex was able to realize margin expansion in the fourth quarter and full year in each of its operating segments and on a consolidated basis.

Balance Sheet Update

As of October 31, 2023, Quanex had total debt of $70.0 million ($18.5 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 0.1x (Net Debt free excluding these real-estate leases). As of October 31, 2023, Quanex’s LTM Adjusted EBITDA was $159.6 million and LTM Net Income, the most directly comparable GAAP measure, was $82.5 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 stated, “We enter fiscal 2024 with a somewhat cautious outlook for the first half due to the ongoing macroeconomic challenges combined with typical seasonality in our business, but we are optimistic that demand for our products will improve in the second half as consumer confidence is restored over time. However, consistent with the last two years, based on current macro indicators, recent conversations with our customers, limited transparency, and varying opinions on the outlook for 2024, we are taking a thoughtful approach to guidance for 2024. As such, we believe it would be premature to give guidance at this time and intend to re-visit guidance for 2024 when we report earnings for the first quarter. Our long-term view continues to be optimistic as the underlying fundamentals for the residential housing market remain positive.”

Conference Call and Webcast Information

The Company has also scheduled a conference call for Friday, December 15, 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/BI8c21998a92f24071bb721ad032dd7661

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, custom mixing 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.

QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(In thousands, except per share data)
(Unaudited)
                   
                   
    Three Months Ended October 31,   Twelve Months Ended October, 31  
      2023       2022       2023       2022    
                   
Net sales   $ 295,492     $ 307,532     $ 1,130,583     $ 1,221,502    
Cost of sales     215,473       240,073       853,059       953,004    
Selling, general and administrative     29,326       29,334       123,957       117,108    
Depreciation and amortization     11,194       9,555       42,866       40,109    
Operating income     39,499       28,570       110,701       111,281    
Interest expense     (1,565 )     (710 )     (8,136 )     (2,559 )  
Other, net     (6,110 )     136       (5,519 )     1,041    
Income before income taxes     31,824       27,996       97,046       109,763    
Income tax expense     (4,442 )     (3,329 )     (14,545 )     (21,427 )  
Net income   $ 27,382     $ 24,667     $ 82,501     $ 88,336    
                   
Earnings per common share, basic   $ 0.84     $ 0.75     $ 2.51     $ 2.67    
Earnings per common share, diluted   $ 0.83     $ 0.75     $ 2.50     $ 2.66    
                   
Weighted average common shares outstanding:                  
Basic     32,753       32,916       32,819       33,048    
Diluted     32,991       33,082       33,026       33,205    
                   
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, 2023   October 31, 2022  
ASSETS          
Current assets:          
Cash and cash equivalents   $ 58,474     $ 55,093    
Accounts receivable, net     97,311       96,018    
Inventories, net     97,959       120,890    
Income taxes receivable     8,298          
Prepaid and other current assets     11,558       8,664    
Total current assets     273,600       280,665    
Property, plant and equipment, net     250,664       180,400    
Operating lease right-of-use assets     46,620       56,000    
Goodwill     182,956       137,855    
Intangible assets, net     74,115       65,035    
Other assets     3,188       4,662    
Total assets   $ 831,143     $ 724,617    
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable   $ 74,371     $ 77,907    
Accrued liabilities     50,319       52,114    
Income taxes payable     384       1,049    
Current maturities of long-term debt     2,365       1,046    
Current operating lease liabilities     7,224       7,727    
Total current liabilities     134,663       139,843    
Long-term debt     66,435       29,628    
Noncurrent operating lease liabilities     40,361       49,286    
Deferred pension benefits           3,917    
Deferred income taxes     29,133       22,277    
Liabilities for uncertain tax positions     250       1,361    
Other liabilities     14,747       13,470    
Total liabilities     285,589       259,782    
Stockholders’ equity:          
Common stock     372       372    
Additional paid-in-capital     251,576       251,947    
Retained earnings     409,318       337,456    
Accumulated other comprehensive loss     (38,141 )     (49,422 )  
Treasury stock at cost     (77,571 )     (75,518 )  
Total stockholders’ equity     545,554       464,835    
Total liabilities and stockholders’ equity   $ 831,143     $ 724,617    
           
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
         
  Twelve Months Ended October, 31  
    2023       2022    
Operating activities:        
Net income $ 82,501     $ 88,336    
Adjustments to reconcile net income to cash provided by operating activities:        
Depreciation and amortization   42,866       40,109    
Loss on the disposition of capital assets   278       109    
Stock-based compensation   2,521       2,291    
Deferred income tax   5,147       2,097    
Other, net   1,529       1,905    
Changes in assets and liabilities:        
Decrease in accounts receivable   6,969       6,945    
Decrease (increase) in inventory   30,024       (32,035 )  
Increase in other current assets   (1,880 )     (970 )  
Decrease in accounts payable   (11,611 )     (3,047 )  
Decrease in accrued liabilities   (4,249 )     (3,159 )  
Decrease in income taxes payable   (9,009 )     (5,192 )  
(Decrease) increase in deferred pension benefits   (359 )     77    
Increase in other long-term liabilities   683       305    
Other, net   1,642       194    
Cash provided by operating activities   147,052       97,965    
Investing activities:        
Business acquisition   (91,302 )        
Capital expenditures   (37,390 )     (33,121 )  
Proceeds from disposition of capital assets   253       159    
Cash used for investing activities   (128,439 )     (32,962 )  
Financing activities:        
Borrowings under credit facilities   102,000       70,500    
Repayments of credit facility borrowings   (100,000 )     (95,500 )  
Debt issuance costs         (1,210 )  
Repayments of other long-term debt   (2,567 )     (1,747 )  
Common stock dividends paid   (10,639 )     (10,598 )  
Issuance of common stock   1,215       689    
Payroll tax paid to settle shares forfeited upon vesting of stock   (567 )     (1,413 )  
Purchase of treasury stock   (5,593 )     (6,600 )  
Cash used for financing activities   (16,151 )     (45,879 )  
Effect of exchange rate changes on cash and cash equivalents   919       (4,092 )  
Increase in cash and cash equivalents   3,381       15,032    
Cash and cash equivalents at beginning of period   55,093       40,061    
Cash and cash equivalents at end of period $ 58,474     $ 55,093    
         
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  
      2023   2022   2023   2022  
Cash provided by operating activities     $44,493   $48,111   $147,052   $97,965  
Capital expenditures     (14,940)   (13,633)   (37,390)   (33,121)  
Free Cash Flow     $29,553   $34,478   $109,662   $64,844  
                     
                     
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,      
      2023   2022          
Revolving credit facility     $15,000   $13,000          
Finance lease obligations (1)     55,000   19,202          
Total debt (2)     70,000   32,202          
Less: Cash and cash equivalents     58,474   55,093          
Net Debt     $11,526   ($22,891)          
                     
(1) Includes $51.5 million and $17.7 million in real estate lease liabilities considered finance leases under U.S. GAAP as of October 31, 2023 and October 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
October 31, 2023
  Three Months Ended
July 31, 2023
  Three Months Ended
April 30, 2023
  Three Months Ended
January 31, 2023
  Total  
    Reconciliation   Reconciliation   Reconciliation   Reconciliation   Reconciliation  
Net income as reported   $ 27,382     $ 31,698     $ 21,512   $ 1,909     $ 82,501  
Income tax expense     4,442       4,099       5,551     453       14,545  
Other, net     6,110       (402 )     29     (218 )     5,519  
Interest expense     1,565       2,068       2,244     2,259       8,136  
Depreciation and amortization     11,194       10,596       10,456     10,620       42,866  
EBITDA     50,693       48,059       39,792     15,023       153,567  
Cost of sales (1)     (35 )           48           13  
Selling, general and administrative (1),(2)     109       395       63     5,448       6,015  
Adjusted EBITDA   $ 50,767     $ 48,454     $ 39,903   $ 20,471     $ 159,595  
                       
(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
October 31, 2023
  Three Months Ended
October 31, 2022
  Twelve Months Ended
October 31, 2023
  Twelve Months Ended
October 31, 2022
   
    Net Income   Diluted EPS   Net Income   Diluted EPS   Net Income   Diluted EPS   Net Income   Diluted EPS    
Net income as reported   $ 27,382     $ 0.83     $ 24,667     $ 0.75     $ 82,501     $ 2.50     $ 88,336     $ 2.66      
Net income reconciling items from below     3,851     $ 0.12       290     $       8,401     $ 0.25       581     $ 0.02      
Adjusted net income and adjusted EPS   $ 31,233     $ 0.95     $ 24,957     $ 0.75     $ 90,902     $ 2.75     $ 88,917     $ 2.68      
                                     
Reconciliation of Adjusted EBITDA   Three Month Ended
October 31, 2023
  Three Months Ended
October 31, 2022
  Twelve Months Ended
October 31, 2023
  Twelve Months Ended
October 31, 2022
   
    Reconciliation       Reconciliation       Reconciliation       Reconciliation        
Net income as reported   $ 27,382         $ 24,667         $ 82,501         $ 88,336          
Income tax expense     4,442           3,329           14,545           21,427          
Other, net     6,110           (136 )         5,519           (1,041 )        
Interest expense     1,565           710           8,136           2,559          
Depreciation and amortization     11,194           9,555           42,866           40,109          
EBITDA     50,693           38,125           153,567           151,390          
EBITDA reconciling items from below     74           564           6,028           1,114          
Adjusted EBITDA   $ 50,767         $ 38,689         $ 159,595         $ 152,504          
                                     
Reconciling Items   Three Months Ended
October 31, 2023
  Three Months Ended
October 31, 2022
  Twelve Months Ended
October 31, 2023
  Twelve Months Ended
October 31, 2022
   
    Income Statement   Reconciling Items   Income Statement   Reconciling Items   Income Statement   Reconciling Items   Income Statement   Reconciling Items    
Net sales   $ 295,492     $     $ 307,532     $     $ 1,130,583     $     $ 1,221,502     $      
Cost of sales     215,473       35   (1 )   240,073             853,059       (13 ) (1 )   953,004            
Selling, general and administrative     29,326       (109 ) (1),(2)   29,334       (564 ) (2 )   123,957       (6,015 ) (1),(2)   117,108       (1,114 ) (2 )  
EBITDA     50,693       74       38,125       564       153,567       6,028       151,390       1,114      
Depreciation and amortization     11,194             9,555             42,866             40,109            
Operating income     39,499       74       28,570       564       110,701       6,028       111,281       1,114      
Interest expense     (1,565 )           (710 )           (8,136 )           (2,559 )          
Other, net     (6,110 )     5,232   (3 )   136       (222 ) (3 )   (5,519 )     5,196   (3 )   1,041       (386 ) (3 )  
Income before income taxes     31,824       5,306       27,996       342       97,046       11,224       109,763       728      
Income tax expense     (4,442 )     (1,455 ) (4 )   (3,329 )     (52 ) (4 )   (14,545 )     (2,823 ) (4 )   (21,427 )     (147 ) (4 )  
Net income   $ 27,382     $ 3,851     $ 24,667     $ 290     $ 82,501     $ 8,401     $ 88,336     $ 581      
                                     
Diluted earnings per share   $ 0.83         $ 0.75         $ 2.50         $ 2.66          
                                     
                                     
(1) Loss on damage to manufacturing facilities caused by weather.                    
(2) Transaction and advisory fees.                    
(3) Foreign currency translation losses (gains) and pension settlement expense.                    
(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 October 31, 2023                    
Net sales   $ 180,446     $ 64,170     $ 51,868     $ (992 )   $ 295,492    
Cost of sales     135,490       39,070       41,488       (575 )     215,473    
Gross Margin     44,956       25,100       10,380       (417 )     80,019    
Gross Margin %     24.9 %     39.1 %     20.0 %         27.1 %  
Selling, general and administrative     15,272       8,354       5,135       565       29,326    
Depreciation and amortization     5,211       2,714       3,220       49       11,194    
Operating income (loss)     24,473       14,032       2,025       (1,031 )     39,499    
Depreciation and amortization     5,211       2,714       3,220       49       11,194    
EBITDA     29,684       16,746       5,245       (982 )     50,693    
Loss on damage to manufacturing facilities (Cost of sales)     (35 )                       (35 )  
Loss on damage to manufacturing facilities (SG&A)                 (131 )           (131 )  
Transaction and advisory fees                       240       240    
Adjusted EBITDA   $ 29,649     $ 16,746     $ 5,114     $ (742 )   $ 50,767    
Adjusted EBITDA Margin %     16.4 %     26.1 %     9.9 %         17.2 %  
                     
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 %  
                     
Twelve months ended October 31, 2023                    
Net sales   $ 667,482     $ 250,774     $ 215,445     $ (3,118 )   $ 1,130,583    
Cost of sales     517,805       158,491       178,210       (1,447 )     853,059    
Gross Margin     149,677       92,283       37,235       (1,671 )     277,524    
Gross Margin %     22.4 %     36.8 %     17.3 %         24.5 %  
Selling, general and administrative     56,979       32,350       21,074       13,554       123,957    
Depreciation and amortization     20,539       9,849       12,208       270       42,866    
Operating income (loss)     72,159       50,084       3,953       (15,495 )     110,701    
Depreciation and amortization     20,539       9,849       12,208       270       42,866    
EBITDA     92,698       59,933       16,161       (15,225 )     153,567    
Loss on damage to manufacturing facilities (Cost of sales)                 13             13    
Loss on damage to manufacturing facilities (SG&A)                 69             69    
Transaction and advisory fees                       5,946       5,946    
Adjusted EBITDA   $ 92,698     $ 59,933     $ 16,243     $ (9,279 )   $ 159,595    
Adjusted EBITDA Margin %     13.9 %     23.9 %     7.5 %         14.1 %  
                     
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 %  
                     
QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)
                   
    Three Months Ended October 31,   Twelve Months Ended October, 31  
      2023       2022       2023       2022    
                   
NA Fenestration: (1)                
  United States – fenestration $ 138,783     $ 162,147     $ 518,396     $ 609,572    
  International – fenestration   8,081       4,954       30,100       35,906    
  United States – non-fenestration   29,267       6,922       103,090       29,039    
  International – non-fenestration   4,315       4,152       15,896       12,941    
    $ 180,446     $ 178,175     $ 667,482     $ 687,458    
EU Fenestration: (2)                
  International – fenestration $ 49,862     $ 46,329     $ 191,871     $ 194,854    
  International – non-fenestration   14,308       15,775       58,903       67,204    
    $ 64,170     $ 62,104     $ 250,774     $ 262,058    
NA Cabinet Components:                
  United States – fenestration $ 4,286     $ 4,408     $ 16,899     $ 17,696    
  United States – non-fenestration   47,092       62,818       195,866       254,726    
  International – non-fenestration   490       767       2,680       3,282    
    $ 51,868     $ 67,993     $ 215,445     $ 275,704    
Unallocated Corporate & Other:                
  Eliminations $ (992 )   $ (740 )   $ (3,118 )   $ (3,718 )  
    $ (992 )   $ (740 )   $ (3,118 )   $ (3,718 )  
                   
Net Sales $ 295,492     $ 307,532     $ 1,130,583     $ 1,221,502    
                   
(1) Includes the net sales from the acquisition of LMI of $21.4 million and $75.6 million for the three and twelve months ended October 31, 2023, respectively.  
(2) Reflects an increase of $4.5 million and a reduction of $4.1 million in revenue associated with foreign currency exchange rate impacts for the three and twelve months ended October 31, 2023, respectively.  
                   


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