Contribution from Tyman Acquisition Boosts Results
Margin Expansion Realized on Consolidated Basis for Full Year
$53.75 Million of Debt Repaid Since Closing Tyman Acquisition
Integration of Transformative Acquisition Progressing Ahead of Schedule
Realization of Synergies Ongoing
HOUSTON, Dec. 12, 2024 (GLOBE NEWSWIRE) — Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months and twelve months ended October 31, 2024.
The Company reported the following selected financial results:
| Three Months Ended October 31, | Twelve Months Ended October 31, | ||||||||
| ($ in millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||
| Net Sales | $492.2 | $295.5 | $1,277.9 | $1,130.6 | |||||
| Gross Margin | $117.1 | $80.0 | $305.6 | $277.5 | |||||
| Gross Margin % | 23.8% | 27.1% | 23.9% | 24.5% | |||||
| Net (Loss) Income | ($13.9) | $27.4 | $33.1 | $82.5 | |||||
| Diluted EPS | ($0.30) | $0.83 | $0.90 | $2.50 | |||||
| Adjusted Net Income | $28.6 | $31.2 | $80.4 | $90.9 | |||||
| Adjusted Diluted EPS | $0.61 | $0.95 | $2.19 | $2.75 | |||||
| Adjusted EBITDA | $81.1 | $50.8 | $182.4 | $159.6 | |||||
| Adjusted EBITDA Margin % | 16.5% | 17.2% | 14.3% | 14.1% | |||||
| Cash Provided by Operating Activities | $5.5 | $44.5 | $88.8 | $147.1 | |||||
| Free Cash Flow | ($8.2) | $29.6 | $51.7 | $109.7 | |||||
| (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, Chairman, President and Chief Executive Officer, commented, “On a consolidated basis, results for the fourth quarter and full year were boosted by the contribution from the Tyman acquisition. Results from the legacy Quanex business were in-line with our expectations for both the fourth quarter and full year. We are pleased with profitability despite the soft macro environment we experienced throughout 2024. Overall, we executed on our plan from an operational standpoint, and we executed on our long-term profitable growth strategy by closing on the transformative Tyman acquisition in August. In addition, our continued focus on cash flow and managing working capital enabled us to repay approximately $54 million in debt since closing the acquisition on August 1, 2024.
“As we transition into 2025, we expect the current demand softness to persist until the spring selling season, but our expectations are that results will improve in the second half of 2025 due to typical seasonality combined with the benefit from unwinding pent up demand as interest rates continue to trend lower and consumer confidence improves. We will continue to focus on integrating the legacy Tyman business and capturing the targeted synergies. We have also settled on a new operating structure that is designed around our core competencies, which should enable us to capitalize on existing commercial opportunities and tap into new innovative solutions. Furthermore, we continue to be excited about building a stronger, more profitable company over time and creating additional value for our shareholders. We have scheduled an Investor and Analyst Day on February 6, 2025, to unveil the ‘new’ Quanex, which will include providing detail on the revamped operating structure, guidance for 2025 and an update on our long-term profitable growth strategy.”
Fourth Quarter and Fiscal 2024 Results Summary
Quanex reported net sales of $492.2 million during the three months ended October 31, 2024, which represents an increase of 66.6% compared to $295.5 million for the same period of 2023. The Company reported net sales of $1.28 billion during the twelve months ended October 31, 2024, which represents an increase of 13.0% compared to $1.13 billion for the same period of 2023. The increases reflect the contribution from the Tyman acquisition that closed on August 1, 2024. Excluding the contribution from Tyman, net sales would have declined by 2.3% for the fourth quarter of 2024 and 5.0% for the full year, largely due to lower volume. Quanex reported a decline in net sales of 4.7% for the fourth quarter of 2024 and a decline of 2.6% in net sales for the full year in its North American Fenestration segment. In its North American Cabinet Components segment, Quanex reported an increase of 1.7% in net sales for the fourth quarter and a decline of 7.9% in net sales for the full year. Excluding foreign exchange impact, the Company realized a decrease in net sales of 1.2% for the fourth quarter and a decrease of 8.9% in net sales for the full year in its European Fenestration segment. In addition, Quanex reported net sales of $203.4 million related to the Tyman acquisition during the fourth quarter of 2024. (See Sales Analysis table for additional information)
The increase in adjusted earnings for the three months and twelve months ended October 31, 2024 was mostly attributable to the contribution from the Tyman acquisition; however, the increase in adjusted earnings was also due in part to the lower cost of sales, including labor, related to lower volumes and deflation in the price of raw materials. Quanex was able to realize margin expansion in the fourth quarter in its North American Fenestration segment mainly due to effective cost control. In addition, the Company was also able to realize margin expansion on a consolidated basis for the full year, primarily driven by the contribution from the Tyman acquisition.
Balance Sheet & Liquidity Update
The Company borrowed $770 million ($500 Term Loan A and $270 on Senior Secured Revolving Credit Facility) to acquire Tyman on August 1, 2024. Quanex repaid $53.75 million in debt during the fourth quarter of 2024. As of October 31, 2024, the Company had total debt of $776.9 million and Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA was 3.7x. As of October 31, 2024, the Company’s LTM Net Income was $33.1 million and LTM Adjusted EBITDA was $182.4 million (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)
The leverage ratio for Quanex’s quarterly debt covenant compliance (“Debt Covenant Leverage Ratio”) for its lenders was 2.3x as of October 31, 2024. The Debt Covenant Leverage Ratio calculation is defined in the Company’s Amendment No. 1 to its Second Amended and Restated Credit Agreement, which was filed with the SEC on June 12, 2024. In general, the main difference is that the Debt Covenant Leverage Ratio excludes real-estate leases that are considered “finance” leases under U.S. GAAP and is calculated on a proforma basis to include Adjusted EBITDA from the Tyman acquisition, $30 million of EBITDA for the synergy target related to the acquisition and only cash from domestic subsidiaries. The Debt Covenant Leverage Ratio would be 2.1x if calculated using the cash and cash equivalents amount on the balance sheet as of October 31, 2024.
Quanex’s liquidity was $343.3 million as of October 31, 2024, consisting of $97.7 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2029, less letters of credit outstanding.
Investor and Analyst Day
The Company announced it will host an Investor and Analyst Day at the New York Stock Exchange, 11 Wall St. New York, NY 1005, on February 6, 2025. The event will begin at 9:00 a.m. ET and conclude at approximately 11:00 a.m. ET. All investors and analysts that plan to attend should RSVP for the event by January 23, 2025, by contacting Quanex’s Senior Vice President, Chief Financial Officer & Treasurer, Scott Zuehlke, by email (scott.zuehlke@quanex.com).
Presentation content and a live audio webcast will be made available on Quanex’s website at http://www.quanex.com in the Investors section under Events & Presentations. A replay of the webcast will be posted following the live event.
Conference Call and Webcast Information
The Company has also scheduled a conference call for Friday, December 13, 2024 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/BIef39998f168c4cff8d9ed1561cb1cc48
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, solar, refrigeration, custom mixing, building access and cabinetry markets. Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.
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), Adjusted EBITDA and LTM 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) on the economy and the demand for Quanex’s products, timing estimates or any other expectations related to the Acquisition, 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, 2023, 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, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 492,161 | $ | 295,492 | $ | 1,277,862 | $ | 1,130,583 | ||||||||
| Cost of sales | 375,111 | 215,473 | 972,238 | 853,059 | ||||||||||||
| Selling, general and administrative | 86,891 | 29,326 | 190,470 | 123,957 | ||||||||||||
| Depreciation and amortization | 27,329 | 11,194 | 60,328 | 42,866 | ||||||||||||
| Operating income | 2,830 | 39,499 | 54,826 | 110,701 | ||||||||||||
| Interest expense | (17,697 | ) | (1,565 | ) | (20,593 | ) | (8,136 | ) | ||||||||
| Other, net | (2,671 | ) | (6,110 | ) | 7,849 | (5,519 | ) | |||||||||
| (Loss) income before income taxes | (17,538 | ) | 31,824 | 42,082 | 97,046 | |||||||||||
| Income tax benefit (expense) | 3,621 | (4,442 | ) | (9,023 | ) | (14,545 | ) | |||||||||
| Net (loss) income | $ | (13,917 | ) | $ | 27,382 | $ | 33,059 | $ | 82,501 | |||||||
| (Loss) earnings per common share, basic | $ | (0.30 | ) | $ | 0.84 | $ | 0.91 | $ | 2.51 | |||||||
| (Loss) earnings per common share, diluted | $ | (0.30 | ) | $ | 0.83 | $ | 0.90 | $ | 2.50 | |||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 47,015 | 32,753 | 36,416 | 32,819 | ||||||||||||
| Diluted | 47,015 | 32,991 | 36,648 | 33,026 | ||||||||||||
| Cash dividends per share | $ | 0.08 | $ | 0.08 | $ | 0.32 | $ | 0.32 | ||||||||
| QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
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| October 31, 2024 | October 31, 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 97,744 | $ | 58,474 | ||||
| Restricted Cash | 5,251 | – | ||||||
| Accounts receivable, net | 197,689 | 97,311 | ||||||
| Inventories | 275,550 | 97,959 | ||||||
| Income taxes receivable | 5,937 | 8,298 | ||||||
| Prepaid and other current assets | 29,097 | 11,558 | ||||||
| Total current assets | 611,268 | 273,600 | ||||||
| Property, plant and equipment, net | 402,466 | 250,664 | ||||||
| Operating lease right-of-use assets | 126,715 | 46,620 | ||||||
| Deferred tax assets | 3,845 | – | ||||||
| Goodwill | 574,711 | 182,956 | ||||||
| Intangible assets, net | 597,909 | 74,115 | ||||||
| Other assets | 2,874 | 3,188 | ||||||
| Total assets | $ | 2,319,788 | $ | 831,143 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 124,404 | $ | 74,371 | ||||
| Accrued liabilities | 103,623 | 50,319 | ||||||
| Income taxes payable | 6,620 | 384 | ||||||
| Current maturities of long-term debt | 25,745 | 2,365 | ||||||
| Current operating lease liabilities | 12,475 | 7,224 | ||||||
| Total current liabilities | 272,867 | 134,663 | ||||||
| Long-term debt | 737,198 | 66,435 | ||||||
| Noncurrent operating lease liabilities | 117,560 | 40,361 | ||||||
| Deferred income taxes | 162,304 | 29,133 | ||||||
| Liabilities for uncertain tax positions | – | 250 | ||||||
| Other liabilities | 19,113 | 14,747 | ||||||
| Total liabilities | 1,309,042 | 285,589 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 513 | 372 | ||||||
| Additional paid-in-capital | 701,008 | 251,576 | ||||||
| Retained earnings | 430,405 | 409,318 | ||||||
| Accumulated other comprehensive loss | (46,428 | ) | (38,141 | ) | ||||
| Treasury stock at cost | (74,752 | ) | (77,571 | ) | ||||
| Total stockholders’ equity | 1,010,746 | 545,554 | ||||||
| Total liabilities and stockholders’ equity | $ | 2,319,788 | $ | 831,143 | ||||
| QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands) (Unaudited) |
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| Twelve Months Ended October 31, | |||||||
| 2024 | 2023 | ||||||
| Operating activities: | |||||||
| Net income | $ | 33,059 | $ | 82,501 | |||
| Adjustments to reconcile net income to cash provided by operating activities: | |||||||
| Depreciation and amortization | 60,328 | 42,866 | |||||
| (Gain) loss on disposition of capital assets | (5,218 | ) | 278 | ||||
| Stock-based compensation | 2,952 | 2,521 | |||||
| Deferred income tax | (15,336 | ) | 5,147 | ||||
| Charge for deferred loan costs and debt discount | 3,469 | – | |||||
| Gain on deal contingent foreign exchange forward currency contract | (6,512 | ) | – | ||||
| Other, net | 4,495 | 1,529 | |||||
| Changes in assets and liabilities: | |||||||
| Decrease in accounts receivable | 973 | 6,969 | |||||
| Decrease in inventory | 33,484 | 30,024 | |||||
| Decrease (increase) in other current assets | 4,297 | (1,880 | ) | ||||
| Decrease in accounts payable | (35,824 | ) | (11,611 | ) | |||
| Increase (decrease) in accrued liabilities | 6,250 | (4,249 | ) | ||||
| Increase (decrease) in income taxes receivable | 9,139 | (9,009 | ) | ||||
| (Decrease) increase in other long-term liabilities | (7,155 | ) | 683 | ||||
| Other, net | 411 | 1,283 | |||||
| Cash provided by operating activities | 88,812 | 147,052 | |||||
| Investing activities: | |||||||
| Business acquisition | (848,614 | ) | (91,302 | ) | |||
| Capital expenditures | (37,086 | ) | (37,390 | ) | |||
| Proceeds from disposition of capital assets | 15,046 | 253 | |||||
| Cash used for investing activities | (870,654 | ) | (128,439 | ) | |||
| Financing activities: | |||||||
| Borrowings under credit facilities | 785,000 | 102,000 | |||||
| Repayments of credit facility borrowings | (83,750 | ) | (100,000 | ) | |||
| Debt issuance costs | (13,808 | ) | – | ||||
| Borrowings (repayments) of other long-term debt | (296,206 | ) | (2,567 | ) | |||
| Issuance of common stock | 450,633 | 1,215 | |||||
| Proceeds from deal contingent foreign exchange forward currency contract | 6,512 | – | |||||
| Common stock dividends paid | (11,972 | ) | (10,639 | ) | |||
| Payroll tax paid to settle shares forfeited upon vesting of stock | (1,193 | ) | (567 | ) | |||
| Purchase of treasury stock | – | (5,593 | ) | ||||
| Cash provided (used for) by financing activities | 835,216 | (16,151 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (8,853 | ) | 919 | ||||
| Increase in cash, cash equivalents and restricted cash | 44,521 | 3,381 | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 58,474 | 55,093 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 102,995 | $ | 58,474 | |||
| QUANEX BUILDING PRODUCTS CORPORATION FREE CASH FLOW AND NET DEBT RECONCILIATION (In thousands) (Unaudited) |
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| 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, | |||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||
| Cash provided by operating activities | $5,479 | $44,493 | $88,812 | $147,052 | ||||||
| Capital expenditures | (13,651) | (14,940) | (37,086) | (37,390) | ||||||
| Free Cash Flow | ($8,172) | $29,553 | $51,726 | $109,662 | ||||||
| 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, | ||||||||||
| 2024 | 2023 | |||||||||
| Term loan facility | $493,750 | $0 | ||||||||
| Revolving credit facility | 222,500 | 15,000 | ||||||||
| Finance lease obligations (1) | 60,676 | 55,000 | ||||||||
| Total debt (2) | 776,926 | 70,000 | ||||||||
| Less: Cash and cash equivalents | 97,744 | 58,474 | ||||||||
| Net Debt | $679,182 | $11,526 | ||||||||
| (1) Includes $50.3 million and $51.5 million in real estate lease liabilities considered finance leases under U.S. GAAP as of October 31, 2024 and October 31, 2023, 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) |
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| Reconciliation of Last Twelve Months Adjusted EBITDA | Three Months Ended October 31, 2024 | Three Months Ended July 31, 2024 | Three Months Ended April 30, 2024 | Three Months Ended January 31, 2024 | Total | |||||||||||||||
Reconciliation |
Reconciliation | Reconciliation | Reconciliation | Reconciliation | ||||||||||||||||
| Net (loss) income as reported | $ | (13,917 | ) | $ | 25,350 | $ | 15,377 | $ | 6,249 | $ | 33,059 | |||||||||
| Income tax (benefit) expense | (3,621 | ) | 6,688 | 4,314 | 1,642 | 9,023 | ||||||||||||||
| Other, net | 2,671 | (9,474 | ) | (4 | ) | (1,042 | ) | (7,849 | ) | |||||||||||
| Interest expense | 17,697 | 878 | 950 | 1,068 | 20,593 | |||||||||||||||
| Depreciation and amortization | 27,329 | 10,953 | 10,894 | 11,152 | 60,328 | |||||||||||||||
| EBITDA | 30,159 | 34,395 | 31,531 | 19,069 | 115,154 | |||||||||||||||
| Cost of sales (1),(2) | 887 | 1,507 | 631 | – | 3,025 | |||||||||||||||
| Selling, general and administrative (1),(2),(3),(4) | 50,004 | 6,133 | 7,862 | 205 | 64,204 | |||||||||||||||
| Adjusted EBITDA | $ | 81,050 | $ | 42,035 | $ | 40,024 | $ | 19,274 | $ | 182,383 | ||||||||||
| (1) Expense (gain) related to plant closure. | ||||||||||||||||||||
| (2) Loss on damage to manufacturing facilities caused by weather. | ||||||||||||||||||||
| (3) Transaction and advisory fees. | ||||||||||||||||||||
| (4) Amortization of step-up for purchase price adjustments on inventory and accounts receivable. | ||||||||||||||||||||
| QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE (In thousands, except per share data) (Unaudited) |
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| Reconciliation of Adjusted Net Income and Adjusted EPS | Three Months Ended October 31, 2024 |
Three Months Ended October 31, 2023 |
Twelve Months Ended October 31, 2024 |
Twelve Months Ended October 31, 2023 |
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| Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | Net Income | Diluted EPS | ||||||||||||||||||||||||||
| Net (loss) income as reported | $ | (13,917 | ) | $ | (0.30 | ) | $ | 27,382 | $ | 0.83 | $ | 33,059 | $ | 0.90 | $ | 82,501 | $ | 2.50 | |||||||||||||||
| Net (loss) income reconciling items from below | 42,528 | $ | 0.91 | 3,851 | $ | 0.12 | 47,303 | $ | 1.29 | 8,401 | $ | 0.25 | |||||||||||||||||||||
| Adjusted net income and adjusted EPS | $ | 28,611 | $ | 0.61 | $ | 31,233 | $ | 0.95 | $ | 80,362 | $ | 2.19 | $ | 90,902 | $ | 2.75 | |||||||||||||||||
| Reconciliation of Adjusted EBITDA | Three Months Ended October 31, 2024 |
Three Months Ended October 31, 2023 |
Twelve Months Ended October 31, 2024 |
Twelve Months Ended October 31, 2023 |
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| Reconciliation | Reconciliation | Reconciliation | Reconciliation | ||||||||||||||||||||||||||||||
| Net (loss) income as reported | $ | (13,917 | ) | $ | 27,382 | $ | 33,059 | $ | 82,501 | ||||||||||||||||||||||||
| Income tax (benefit) expense | (3,621 | ) | 4,442 | 9,023 | 14,545 | ||||||||||||||||||||||||||||
| Other, net | 2,671 | 6,110 | (7,849 | ) | 5,519 | ||||||||||||||||||||||||||||
| Interest expense | 17,697 | 1,565 | 20,593 | 8,136 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 27,329 | 11,194 | 60,328 | 42,866 | |||||||||||||||||||||||||||||
| EBITDA | 30,159 | 50,693 | 115,154 | 153,567 | |||||||||||||||||||||||||||||
| EBITDA reconciling items from below | 50,891 | 74 | 67,229 | 6,028 | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 81,050 | $ | 50,767 | $ | 182,383 | $ | 159,595 | |||||||||||||||||||||||||
| Reconciling Items | Three Months Ended October 31, 2024 |
Three Months Ended October 31, 2023 |
Twelve Months Ended October 31, 2024 |
Twelve Months Ended October 31, 2023 |
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| Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | Income Statement | Reconciling Items | ||||||||||||||||||||||||||
| Net sales | $ | 492,161 | $ | – | $ | 295,492 | $ | – | $ | 1,277,862 | $ | – | $ | 1,130,583 | $ | – | |||||||||||||||||
| Cost of sales | 375,111 | (887 | ) | (1) | 215,473 | 35 | (2) | 972,238 | (3,025 | ) | (1) | 853,059 | (13 | ) | (2) | ||||||||||||||||||
| Selling, general and administrative | 86,891 | (50,004 | ) | (1),(3),(4) | 29,326 | (109 | ) | (2),(3) | 190,470 | (64,204 | ) | (1),(3),(4) | 123,957 | (6,015 | ) | (2),(3) | |||||||||||||||||
| EBITDA | 30,159 | 50,891 | 50,693 | 74 | 115,154 | 67,229 | 153,567 | 6,028 | |||||||||||||||||||||||||
| Depreciation and amortization | 27,329 | – | 11,194 | – | 60,328 | – | 42,866 | – | |||||||||||||||||||||||||
| Operating income | 2,830 | 50,891 | 39,499 | 74 | 54,826 | 67,229 | 110,701 | 6,028 | |||||||||||||||||||||||||
| Interest expense | (17,697 | ) | – | (1,565 | ) | – | (20,593 | ) | – | (8,136 | ) | – | |||||||||||||||||||||
| Other, net | (2,671 | ) | 3,271 | (5) | (6,110 | ) | 5,232 | (5) | 7,849 | (6,738 | ) | (5) | (5,519 | ) | 5,196 | (5) | |||||||||||||||||
| (Loss) Income before income taxes | (17,538 | ) | 54,162 | 31,824 | 5,306 | 42,082 | 60,491 | 97,046 | 11,224 | ||||||||||||||||||||||||
| Income tax benefit (expense) | 3,621 | (11,634 | ) | (6) | (4,442 | ) | (1,455 | ) | (6) | (9,023 | ) | (13,188 | ) | (6) | (14,545 | ) | (2,823 | ) | (6) | ||||||||||||||
| Net (loss) income | $ | (13,917 | ) | $ | 42,528 | $ | 27,382 | $ | 3,851 | $ | 33,059 | $ | 47,303 | $ | 82,501 | $ | 8,401 | ||||||||||||||||
| Diluted (loss) earnings per share | $ | (0.30 | ) | $ | 0.83 | $ | 0.90 | $ | 2.50 | ||||||||||||||||||||||||
| (1) (Expense) gain related to plant closure. | |||||||||||||||||||||||||||||||||
| (2) Loss on damage to manufacturing facilities caused by weather. | |||||||||||||||||||||||||||||||||
| (3) Transaction and advisory fees. | |||||||||||||||||||||||||||||||||
| (4) Amortization of step-up for purchase price adjustments on inventory and accounts receivable. | |||||||||||||||||||||||||||||||||
| (5) Pension settlement (refund) expense, losses (gains) on foreign exchange forward currency contract and foreign currency transaction losses (gains). | |||||||||||||||||||||||||||||||||
| (6)Tax impact of net income reconciling items. | |||||||||||||||||||||||||||||||||
| QUANEX BUILDING PRODUCTS CORPORATION SELECTED SEGMENT DATA (In thousands) (Unaudited) |
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| This table provides gross margin, operating income (loss), 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 | Tyman | Unallocated Corp & Other | Total | |||||||||||||||||||
| Three months ended October 31, 2024 | ||||||||||||||||||||||||
| Net sales | $ | 172,031 | $ | 65,075 | $ | 52,761 | $ | 203,435 | $ | (1,141 | ) | $ | 492,161 | |||||||||||
| Cost of sales | 127,448 | 40,258 | 44,136 | 163,946 | (677 | ) | 375,111 | |||||||||||||||||
| Gross Margin | 44,583 | 24,817 | 8,625 | 39,489 | (464 | ) | 117,050 | |||||||||||||||||
| Gross Margin % | 25.9% | 38.1% | 16.3% | 19.4% | 23.8% | |||||||||||||||||||
| Selling, general and administrative (1) | 10,072 | 8,310 | 5,373 | 44,453 | 18,683 | 86,891 | ||||||||||||||||||
| Depreciation and amortization | 5,107 | 2,715 | 3,004 | 16,438 | 65 | 27,329 | ||||||||||||||||||
| Operating income (loss) | 29,404 | 13,792 | 248 | (21,402 | ) | (19,212 | ) | 2,830 | ||||||||||||||||
| Depreciation and amortization | 5,107 | 2,715 | 3,004 | 16,438 | 65 | 27,329 | ||||||||||||||||||
| EBITDA | 34,511 | 16,507 | 3,252 | (4,964 | ) | (19,147 | ) | 30,159 | ||||||||||||||||
| Expense related to plant closure (Cost of sales) | 887 | – | – | – | – | 887 | ||||||||||||||||||
| Net gain related to plant closure (SG&A) | (5,299 | ) | – | – | – | – | (5,299 | ) | ||||||||||||||||
| Amortization of step-up for purchase price adjustments on inventory and accounts receivable | – | – | – | 29,076 | – | 29,076 | ||||||||||||||||||
| Transaction and advisory fees | – | – | – | 10,359 | 15,868 | 26,227 | ||||||||||||||||||
| Adjusted EBITDA | $ | 30,099 | $ | 16,507 | $ | 3,252 | $ | 34,471 | $ | (3,279 | ) | $ | 81,050 | |||||||||||
| Adjusted EBITDA Margin % | 17.5% | 25.4% | 6.2% | 16.9% | 16.5% | |||||||||||||||||||
| 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 (1) | 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 | ||||||||||||||||||
| Loss on sale of plant | – | – | – | – | – | – | ||||||||||||||||||
| Adjusted EBITDA | $ | 29,649 | $ | 16,746 | $ | 5,114 | $ | – | $ | (742 | ) | $ | 50,767 | |||||||||||
| Adjusted EBITDA Margin % | 16.4% | 26.1% | 9.9% | 17.2% | ||||||||||||||||||||
| Twelve months ended October 31, 2024 | ||||||||||||||||||||||||
| Net sales | $ | 650,058 | $ | 230,712 | $ | 198,424 | $ | 203,435 | $ | (4,767 | ) | $ | 1,277,862 | |||||||||||
| Cost of sales | 498,378 | 144,585 | 168,414 | 163,946 | (3,085 | ) | 972,238 | |||||||||||||||||
| Gross Margin | 151,680 | 86,127 | 30,010 | 39,489 | (1,682 | ) | 305,624 | |||||||||||||||||
| Gross Margin % | 23.3% | 37.3% | 15.1% | 19.4% | 23.9% | |||||||||||||||||||
| Selling, general and administrative (1) | 56,630 | 31,318 | 20,727 | 44,453 | 37,342 | 190,470 | ||||||||||||||||||
| Depreciation and amortization | 20,994 | 10,420 | 12,244 | 16,438 | 232 | 60,328 | ||||||||||||||||||
| Operating income (loss) | 74,056 | 44,389 | (2,961 | ) | (21,402 | ) | (39,256 | ) | 54,826 | |||||||||||||||
| Depreciation and amortization | 20,994 | 10,420 | 12,244 | 16,438 | 232 | 60,328 | ||||||||||||||||||
| EBITDA | 95,050 | 54,809 | 9,283 | (4,964 | ) | (39,024 | ) | 115,154 | ||||||||||||||||
| Expense related to plant closure (Cost of sales) | 3,025 | – | – | – | – | 3,025 | ||||||||||||||||||
| Net gain related to plant closure (SG&A) | (4,196 | ) | – | – | – | – | (4,196 | ) | ||||||||||||||||
| Amortization of step-up for purchase price adjustments on inventory and accounts receivable | – | – | – | 29,076 | – | 29,076 | ||||||||||||||||||
| Transaction and advisory fees | – | – | – | 10,359 | 28,965 | 39,324 | ||||||||||||||||||
| Adjusted EBITDA | $ | 93,879 | $ | 54,809 | $ | 9,283 | $ | 34,471 | $ | (10,059 | ) | $ | 182,383 | |||||||||||
| Adjusted EBITDA Margin % | 14.4% | 23.8% | 4.7% | 16.9% | 14.3% | |||||||||||||||||||
| 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 (1) | 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% | ||||||||||||||||||||
| (1) Includes stock-based compensation expense for the three and twelve months ended October 31, 2024 of $2.0 million and $1.7 million, respectively, and $7.4 million and $9.3 million for the comparable prior year periods. | ||||||||||||||||||||||||
| QUANEX BUILDING PRODUCTS CORPORATION SALES ANALYSIS (In thousands) (Unaudited) |
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| Three Months Ended October 31, | Twelve Months Ended October 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| NA Fenestration: | ||||||||||||||||
| United States – fenestration | $ | 128,633 | $ | 138,783 | $ | 491,307 | $ | 518,396 | ||||||||
| International – fenestration | 9,323 | 8,081 | 29,882 | 30,100 | ||||||||||||
| United States – non-fenestration | 29,050 | 29,267 | 110,246 | 103,090 | ||||||||||||
| International – non-fenestration | 5,025 | 4,315 | 18,623 | 15,896 | ||||||||||||
| $ | 172,031 | $ | 180,446 | $ | 650,058 | $ | 667,482 | |||||||||
| EU Fenestration: (1) | ||||||||||||||||
| International – fenestration | $ | 54,665 | $ | 49,862 | $ | 193,935 | $ | 191,871 | ||||||||
| International – non-fenestration | 10,410 | 14,308 | 36,777 | 58,903 | ||||||||||||
| $ | 65,075 | $ | 64,170 | $ | 230,712 | $ | 250,774 | |||||||||
| NA Cabinet Components: | ||||||||||||||||
| United States – fenestration | $ | 3,710 | $ | 4,286 | $ | 14,913 | $ | 16,899 | ||||||||
| United States – non-fenestration | 49,038 | 47,092 | 182,494 | 195,866 | ||||||||||||
| International – non-fenestration | 13 | 490 | 1,017 | 2,680 | ||||||||||||
| $ | 52,761 | $ | 51,868 | $ | 198,424 | $ | 215,445 | |||||||||
| Tyman: | ||||||||||||||||
| United States – fenestration | $ | 127,749 | $ | – | $ | 127,749 | $ | – | ||||||||
| International – fenestration | 75,082 | – | 75,082 | – | ||||||||||||
| United States – non-fenestration | 604 | – | 604 | – | ||||||||||||
| $ | 203,435 | $ | – | $ | 203,435 | $ | – | |||||||||
| Unallocated Corporate & Other: | ||||||||||||||||
| Eliminations | $ | (1,141 | ) | $ | (992 | ) | $ | (4,767 | ) | $ | (3,118 | ) | ||||
| $ | (1,141 | ) | $ | (992 | ) | $ | (4,767 | ) | $ | (3,118 | ) | |||||
| Net Sales | $ | 492,161 | $ | 295,492 | $ | 1,277,862 | $ | 1,130,583 | ||||||||
| (1) Reflects an increase of $1.7 million and $2.5 million in revenue associated with foreign currency exchange rate impacts for the three and twelve months ended October 31, 2024, respectively. | ||||||||||||||||
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