Quanex Building Products Announces Second Quarter 2024 Results and Reaffirms Full Year 2024 Guidance

Margin Expansion in North America and on a Consolidated Basis

Repaid $10 Million in Bank Debt – No Outstanding Draws on Revolver

Tyman Acquisition Expected to Close in 2H24

Quanex Building Products Corporation (“Quanex” or the “Company”) announced its results for the three months ended April 30, 2024.

George Wilson, Chairman, President and Chief Executive Officer, commented, “Our second quarter results came in as expected and we continue to execute. Volumes in North America increased in the second quarter compared to the first quarter of the year, which is encouraging and follows normal seasonality in our business. Volumes in Europe were challenged during the quarter as low consumer confidence continues to impact demand. However, we continue to operate efficiently and were able to realize margin expansion in both of our North American operating segments and on a consolidated basis for the second quarter of 2024. Our continued focus on generating cash and managing working capital enabled us to pay down the remaining $10 million balance on our revolver.”

Second Quarter 2024 Results Summary

Quanex reported net sales of $266.2 million during the three months ended April 30, 2024, which represents a decrease of 2.7% compared to $273.5 million for the same period of 2023. The decrease was largely attributable to softer market demand in the Company’s European Fenestration and North American Cabinet Components segments. Quanex reported a 1.8% increase in net sales for the second quarter in its North American Fenestration segment primarily due to improved volume. In its North American Cabinet Components segment, the Company reported a decline of 4.6% in net sales for the second quarter as a result of lower volume and decreased pricing related to raw material index pricing mechanisms. Excluding foreign exchange impact, Quanex realized a decrease in net sales of 10.4% for the second quarter in its European Fenestration segment mainly due to lower volume and pricing pressure. (See Sales Analysis table for additional information)

The increase in adjusted earnings for the three months ended April 30, 2024 was mostly attributable to a decline in raw material costs, lower income tax expense and lower interest expense.

Balance Sheet Update

As of April 30, 2024, Quanex had total debt of $55.2 million (primarily finance leases) and the Company’s leverage ratio of Net Debt to LTM Adjusted EBITDA continued to improve and Quanex is Net Debt free. As of April 30, 2024, the Company’s LTM Net Income was $80.7 million and LTM Adjusted EBITDA was $158.5 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, “As expected, we are starting to see a seasonal uptick in the demand for our products in North America. Market dynamics in Europe continue to be challenging and volumes are soft; however, we are performing well, and our business is resilient. Based on results to date, conversations with our customers, recent demand trends, and the latest macro data, we are reaffirming our prior guidance for fiscal 2024. On a consolidated basis, we continue to estimate net sales of approximately $1.1 billion, which should result in approximately $145 million to $150 million of Adjusted EBITDA* in fiscal 2024.”

*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.

For full results click here.

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.

Contact:

Scott Zuehlke – Senior Vice President, Chief Financial Officer & Treasurer – scott.zuehlke@quanex.com – (713) 877-5327

Source: Quanex Building Products Corporation