Significant Margin Expansion
Above Market Growth in NA & EU Fenestration Segments
Repaid $35 Million of Bank Debt in 4Q19 & $52.5 Million in FY19

HOUSTON, Dec. 11, 2019 (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, 2019.

The Company reported the following selected financial results:

  Three Months Ended October 31, Twelve Months Ended October 31,
  2019 2018 2019 2018
Net Sales $240.4 $244.1 $893.8 $889.8
Gross Margin $57.2 $56.4 $199.4 $192.8
Gross Margin % 23.8% 23.1% 22.3% 21.7%
Net (Loss) Income ($30.9) $6.7 ($46.7) $26.6
Diluted EPS ($0.94) $0.19 ($1.42) $0.76
         
Adjusted Net Income $14.0 $7.6 $31.4 $22.7
Adjusted Diluted EPS $0.42 $0.22 $0.95 $0.65
Adjusted EBITDA $34.4 $25.0 $102.7 $89.9
Adjusted EBITDA Margin % 14.3% 10.2% 11.5% 10.1%
         
Cash provided by operating activities $66.3 $56.2 $96.4 $104.6
Free Cash Flow $58.4 $50.8 $71.5 $78.1
(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table Selected Segment Data table and Free Cash Flow Reconciliation table for additional information)

Bill Griffiths, Chairman, President and Chief Executive Officer, commented, “Overall we are pleased with our fourth quarter and full year 2019 results.  Despite what has been a softer demand environment compared to our original forecast for 2019, we converted well operationally and benefitted from improved pricing.  On a consolidated basis, we were able to realize Adjusted EBITDA margin expansion of approximately 410 basis points in the fourth quarter and approximately 140 basis points for the full year.  Furthermore, in our North American Fenestration segment, those margins expanded by approximately 250 basis points in the fourth quarter and approximately 110 basis points for the full year.  In Europe, the margins improved by approximately 340 basis points in the fourth quarter and approximately 300 basis points for the full year.  It is important to note that even with softer-than-expected volumes, sales in our North American Fenestration segment grew at 6.0% during the fourth quarter and 3.8% for the full year, which compares favorably to Ducker’s latest window shipment estimate of negative 0.4% for the three months ended September 30, 2019 and negative 1.6% for the twelve months ended September 30, 2019.  Excluding foreign exchange impact, we realized above market sales growth of 3.3% during the fourth quarter and 9.1% for the full year in our European Fenestration segment.  Volumes in our North American Cabinet Components segment continue to be negatively impacted by the ongoing shift in the market from semi-custom to stock cabinets and strategy changes amongst certain customers. 

“Our ongoing effort to improve working capital helped us achieve another year of solid Free Cash Flow generation, which allowed us to pay down $52.5 million in bank debt, $35 million in the fourth quarter alone, and buyback approximately $9.6 million in stock.  The goal was to generate $50 million to $55 million of Free Cash Flow in fiscal 2019 and exit the year with a leverage ratio of Net Debt to LTM Adjusted EBITDA of 1.5x.  Needless to say we comfortably exceeded those targets in fiscal 2019 by generating $71.5 million in Free Cash Flow and exiting the year with a leverage ratio of Net Debt to LTM Adjusted EBITDA of 1.2x.” (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

Fourth Quarter and Fiscal Year 2019 Results Summary  

The decrease in net sales during the three months ended October 31, 2019 was primarily attributable to continued softness in the North American Cabinet Components segment.  However, the Company realized net sales growth for the twelve months ended October 31, 2019 as the North American and European Fenestration segments generated revenue growth above that of their respective markets, mostly due to price increases related to raw material inflation recovery.  (See Sales Analysis table for additional information)

The decreases in reported earnings were primarily the result of a $44.6 million non-cash goodwill impairment in the fourth quarter and a $30.0 million non-cash goodwill impairment in the second quarter, both in the North American Cabinet Components segment, mainly due to lower volume expectations related to the ongoing shift in the market from semi-custom to stock cabinets and customer specific strategy changes.  The increases in adjusted earnings were largely driven by lower incentive accruals, operational efficiency gains and the successful implementation of pricing initiatives in late 2018. 

Share Repurchases

The Company’s Board of Directors authorized a $60 million share repurchase program in September of 2018.  Repurchases under this program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors.  The program does not have an expiration date or a limit on the number of shares that may be repurchased.  Quanex repurchased 175,000 shares of common stock for approximately $3.2 million at an average price of $18.37 per share during the three months ended October 31, 2019, and 583,398 shares of common stock for approximately $9.6 million at an average price of $16.37 per share during the twelve months ended October 31, 2019.  As of October 31, 2019, approximately $18.4 million remained under the existing share repurchase authorization.  

Outlook

Bill Griffiths, Chairman, President and Chief Executive Officer, stated, “Based on current trends and the latest macro data, we are taking a measured approach to our 2020 revenue forecast.  As such, we expect low single-digit sales growth in our North American and European Fenestration segments, offset by a continued decline in revenues in our North American Cabinet Components segment.  Overall, on a consolidated basis, this should equate to sales of approximately $865 million to $885 million in fiscal 2020.  However, we expect to continue on our journey of operational excellence by converting well and managing costs.  Therefore, we expect to generate between $102 million and $110 million in Adjusted EBITDA* in fiscal 2020, which would yield margin expansion of approximately 60 basis points to the midpoint of guidance.  We plan to stay focused on generating cash and maintaining a strong balance sheet while also continuing to opportunistically repurchase 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 scheduled a conference call for Thursday, December 12, 2019, at 11:00 a.m. ET (10:00 a.m. CT).  To participate in the conference call dial (877) 388-2139 for domestic callers and (541) 797-2983 for international callers, in both cases using the conference passcode 9067783, and ask for the Quanex call a few minutes prior to the start time.  A link to the live audio webcast will also be available on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.  A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through December 26, 2019.  To access the replay dial (855) 859-2056 for domestic callers and (404) 537-3406 for international callers, in both cases referencing conference passcode 9067783. 

About Quanex

Quanex Building Products Corporation is an industry-leading manufacturer of components sold to Original Equipment Manufacturers (OEMs) in the building products industry.  Quanex designs and produces energy-efficient fenestration products in addition to kitchen and bath cabinet components.  For more information contact Scott Zuehlke, Vice President, Investor Relations & Treasurer, at 713-877-5327 or scott.zuehlke@quanex.com.

Non-GAAP Terminology Definitions and Disclaimers

Adjusted Net Income (Loss) (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.  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.  The Company is not able to provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of Quanex’s control and/or cannot be reasonably predicted, such as the provision for income taxes.  Net Debt is calculated using the sum of current maturities of long-term debt and long-term debt, minus 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.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of Quanex’s residual cash flow available for discretionary expenditures.  The Company believes that the presented non-GAAP measures provide a consistent basis for comparison between periods, and will assist investors in understanding Quanex’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.  The Company 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 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, 2018, 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 INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
         
         
  Three Months Ended October 31, Twelve Months Ended October 31,
  2019
 2018(1) 2019
 2018(1)
         
Net sales $240,369  $244,086  $893,841  $889,785 
Cost of sales  183,128   187,660   694,420   697,022 
Selling, general and administrative  23,826   31,547   101,292   103,758 
Restructuring charges  89   635   370   1,486 
Depreciation and amortization  12,428   12,548   49,586   51,822 
Asset impairment charges  44,622   -   74,600   - 
Operating (loss) income  (23,724)  11,696   (26,427)  35,697 
Interest expense  (2,029)  (3,516)  (9,643)  (11,100)
Other, net  (345)  273   116   1,156 
(Loss) income before income taxes  (26,098)  8,453   (35,954)  25,753 
Income tax (expense) benefit  (4,850)  (1,736)  (10,776)  800 
Net (loss) income $(30,948) $6,717  $(46,730) $26,553 
         
(Loss) income per common share, basic $(0.94) $0.19  $(1.42) $0.77 
(Loss) income per common share, diluted $(0.94) $0.19  $(1.42) $0.76 
         
Weighted average common shares outstanding:        
Basic  32,893   34,508   32,960   34,701 
Diluted  32,893   34,732   32,960   35,025 
         
Cash dividends per share $0.08  $0.08  $0.32  $0.20 
         
(1) Reflects retrospective accounting change to FIFO and adoption of ASU 2017-07.
         


 
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
  October 31, 2019 October 31, 2018(1)
 
ASSETS    
Current assets:    
Cash and cash equivalents $30,868  $29,003 
Accounts receivable, net  82,946   84,014 
Inventories, net  67,159   70,730 
Prepaid and other current assets  9,353   7,296 
Total current assets  190,326   191,043 
Property, plant and equipment, net  193,600   201,370 
Goodwill  145,563   219,627 
Intangible assets, net  107,297   121,919 
Other assets  8,324   9,255 
Total assets $645,110  $743,214 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $63,604  $52,389 
Accrued liabilities  39,221   45,968 
Income taxes payable  6,183   2,780 
Current maturities of long-term debt  746   1,224 
Total current liabilities  109,754   102,361 
Long-term debt  156,414   209,332 
Deferred pension and postretirement benefits  13,322   4,218 
Deferred income taxes  19,363   17,510 
Liabilities for uncertain tax positions  556   606 
Other liabilities  15,514   13,965 
Total liabilities  314,923   347,992 
Stockholders’ equity:    
Common stock  374   374 
Additional paid-in-capital  254,673   254,678 
Retained earnings  185,703   243,904 
Accumulated other comprehensive loss  (33,817)  (30,705)
Treasury stock at cost  (76,746)  (73,029)
Total stockholders’ equity  330,187   395,222 
Total liabilities and stockholders' equity $645,110  $743,214 
     
(1) Reflects retrospective accounting change to FIFO.


 
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
    
 Twelve Months Ended October 31,
 2019
 2018(1)
Operating activities:   
Net (loss) income$(46,730) $26,553 
Adjustments to reconcile net (loss) income to cash provided by operating activities:   
Depreciation and amortization 49,586   51,822 
Stock-based compensation 2,045   1,874 
Deferred income tax 3,260   (5,556)
Loss (gain) on the disposition of capital assets 732   (142)
Charge for deferred loan costs -   1,064 
Asset impairment charge 74,600   - 
Other, net 2,176   135 
Changes in assets and liabilities:   
Decrease (increase) in accounts receivable 574   (5,550)
Decrease in inventory 3,797   17,230 
(Increase) decrease in other current assets (2,014)  217 
Increase in accounts payable 8,124   8,325 
(Decrease) increase in accrued liabilities (6,760)  6,892 
Increase in income taxes payable 3,416   676 
Increase in deferred pension and postretirement benefits 2,531   2,038 
Increase (Decrease) in other long-term liabilities 513   (523)
Other, net 522   (444)
Cash provided by operating activities 96,372   104,611 
Investing activities:   
Capital expenditures (24,883)  (26,484)
Proceeds from disposition of capital assets 1,324   432 
Cash used for investing activities (23,559)  (26,052)
Financing activities:   
Borrowings under credit facilities 83,500   268,500 
Repayments of credit facility borrowings (136,000)  (296,250)
Debt issuance costs -   (1,001)
Repayments of other long-term debt (1,526)  (1,798)
Common stock dividends paid (10,644)  (7,020)
Issuance of common stock 3,287   4,746 
Payroll tax paid to settle shares forfeited upon vesting of stock (330)  (960)
Purchase of treasury stock (9,551)  (32,034)
Cash used for financing activities (71,264)  (65,817)
Effect of exchange rate changes on cash and cash equivalents 316   (1,194)
Increase in cash and cash equivalents 1,865   11,548 
Cash and cash equivalents at beginning of period 29,003   17,455 
Cash and cash equivalents at end of period$30,868  $29,003 
    
    
(1) Reflects retrospective accounting change to FIFO.
    


 
QUANEX BUILDING PRODUCTS CORPORATION
FREE CASH FLOW 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,
  2019  2018  2019  2018 
Cash provided by operating activities $66,336  $56,158  96,372  104,611 
Capital expenditures (7,899) (5,386) (24,883) (26,484)
Free Cash Flow $58,437  $50,772  $71,489  $78,127 



                                     
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, 2019
  Three Months Ended
October 31, 2018
  Twelve Months Ended
October 31, 2019
  Twelve Months Ended
October 31, 2018
 
  Net (Loss)
Income
 Diluted EPS  Net Income Diluted EPS  Net (Loss)
Income
 Diluted EPS  Net Income Diluted EPS 
Net (loss) income as reported $(30,948) $(0.94)  $6,717  $0.19   $(46,730) $(1.42)  $26,553  $0.76  
Reconciling items from below  44,963   1.36    890   0.03    78,155   2.37    (3,836)  (0.11) 
Adjusted net income and adjusted EPS $14,015  $0.42   $7,607  $0.22   $31,425  $0.95   $22,717  $0.65  
                     
Reconciliation of Adjusted EBITDA Three Months Ended
October 31, 2019
  Three Months Ended
October 31, 2018
  Twelve Months Ended
October 31, 2019
  Twelve Months Ended
October 31, 2018
 
  Reconciliation    Reconciliation    Reconciliation    Reconciliation   
Net (loss) income as reported $(30,948)    $6,717     $(46,730)    $26,553    
Income tax expense (benefit)  4,850      1,736      10,776      (800)   
Other, net  345      (273)     (116)     (1,156)   
Interest expense  2,029      3,516      9,643      11,100    
Depreciation and amortization  12,428      12,548      49,586      51,822    
EBITDA  (11,296)     24,244      23,159      87,519    
Reconciling items from below  45,727      743      79,504      2,393    
Adjusted EBITDA $34,431     $24,987     $102,663     $89,912    
                     
Reconciling Items Three Months Ended
October 31, 2019
  Three Months Ended
October 31, 2018
  Twelve Months Ended
October 31, 2019
  Twelve Months Ended
October 31, 2018
 
  Income Statement Reconciling Items  Income Statement Reconciling Items  Income Statement Reconciling Items  Income Statement Reconciling Items 
Net sales $240,369  $-   $244,086  $-   $893,841  $-   $889,785  $-  
Cost of sales  183,128   -    187,660   -    694,420   -    697,022   -  
Selling, general and administrative  23,826   (1,016)(1)  31,547   (108)(1)  101,292   (4,534)(1)  103,758   (907)(1)
Restructuring charges  89   (89)(2)  635   (635)(2)  370   (370)(2)  1,486   (1,486)(2)
Asset impairment charges  44,622   (44,622)(3)  -   -    74,600   (74,600)(3)  -   -  
EBITDA  (11,296)  45,727    24,244   743    23,159   79,504    87,519   2,393  
Depreciation and amortization  12,428   (192)(4)  12,548   -    49,586   (192)(4)  51,822   (852)(5)
Operating (loss) income  (23,724)  45,919    11,696   743    (26,427)  79,696    35,697   3,245  
Interest expense  (2,029)  -    (3,516)  1,064 (6)  (9,643)  -    (11,100)  1,064 (6)
Other, net  (345)  451 (7)  273   (14)(7)  116   384 (7)  1,156   (102)(7)
(Loss) income before income taxes  (26,098)  46,370    8,453   1,793    (35,954)  80,080    25,753   4,207  
Income tax (expense) benefit  (4,850)  (1,407)(8)  (1,736)  (903)(8)  (10,776)  (1,925)(8)  800   (8,043)(8)
Net (loss) income $(30,948) $44,963   $6,717  $890   $(46,730) $78,155   $26,553  $(3,836) 
                     
Diluted (loss) earnings per share $(0.94)    $0.19     $(1.42)    $0.76    
                     
                     
(1) Transaction and advisory fees, $0.8 million related to the loss on the sale of a plant in the three and twelve months ended 2019, and $2.3 million of severance charges related to a reorganization and executive severance in the twelve months ended 2019.
(2) Restructuring charges relate to the closure of several manufacturing plant facilities.
(3) Asset impairment charges relate to goodwill impairment for the North American Cabinet Components segment.
(4) Accelerated depreciation and amortization for equipment replacement in the North American Fenestration segment.
(5) Accelerated depreciation for a plant re-layout in the North American Cabinet Components segment.
(6) Impact of deferred loan costs for credit facility
(7) Foreign currency transaction gains.
(8) Impact on a with and without basis. Twelve months ended October 31, 2018 includes $6.5 million adjustment related to the Tax Cuts and Jobs Act.
                     


                 
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 Engineered
Components
 EU Engineered
Components
 NA Cabinet
Components
 Unallocated
Corp & Other
 Total
Three months ended October 31, 2019          
Net sales $143,183  $43,794  $54,266  $(874) $240,369 
Cost of sales  107,316   29,997   46,319   (504)  183,128 
Gross Margin  35,867   13,797   7,947   (370)  57,241 
Gross Margin %  25.0%  31.5%  14.6%    23.8%
Selling, general and administrative  13,215   5,532   4,925   154   23,826 
Restructuring charges  89   -   -   -   89 
Depreciation and amortization  6,846   2,176   3,276   130   12,428 
Asset impairment charges  -   -   44,622   -   44,622 
Operating income (loss)  15,717   6,089   (44,876)  (654)  (23,724)
Depreciation and amortization  6,846   2,176   3,276   130   12,428 
EBITDA  22,563   8,265   (41,600)  (524)  (11,296)
Asset impairment charges  -   -   44,622   -   44,622 
Transaction and advisory fees  -   -   -   250   250 
Loss on sale of plant  -   -   -   766   766 
Restructuring charges  89   -   -   -   89 
Adjusted EBITDA $22,652  $8,265  $3,022  $492  $34,431 
Adjusted EBITDA Margin %  15.8%  18.9%  5.6%    14.3%
           
Three months ended October 31, 2018          
Net sales $135,086  $44,491  $66,108  $(1,599) $244,086 
Cost of sales  102,293   31,634   55,016   (1,283)  187,660 
Gross Margin  32,793   12,857   11,092   (316)  56,426 
Gross Margin %  24.3%  28.9%  16.8%    23.1%
Selling, general and administrative  14,805   5,971   5,605   5,166   31,547 
Restructuring charges  629   -   6   -   635 
Depreciation and amortization  6,687   2,278   3,444   139   12,548 
Operating income (loss)  10,672   4,608   2,037   (5,621)  11,696 
Depreciation and amortization  6,687   2,278   3,444   139   12,548 
EBITDA  17,359   6,886   5,481   (5,482)  24,244 
Transaction and advisory fees  -   -   -   108   108 
Restructuring charges  629   -   6   -   635 
Adjusted EBITDA $17,988  $6,886  $5,487  $(5,374) $24,987 
Adjusted EBITDA Margin %  13.3%  15.5%  8.3%    10.2%
           
Twelve months ended October 31, 2019          
Net sales $503,837  $164,997  $229,644  $(4,637) $893,841 
Cost of sales  386,194   114,136   197,263   (3,173)  694,420 
Gross Margin  117,643   50,861   32,381   (1,464)  199,421 
Gross Margin %  23.3%  30.8%  14.1%    22.3%
Selling, general and administrative  50,454   22,976   18,839   9,023   101,292 
Restructuring charges  370   -   -   -   370 
Depreciation and amortization  27,054   8,845   13,178   509   49,586 
Asset impairment charges  -   -   74,600   -   74,600 
Operating income (loss)  39,765   19,040   (74,236)  (10,996)  (26,427)
Depreciation and amortization  27,054   8,845   13,178   509   49,586 
EBITDA  66,819   27,885   (61,058)  (10,487)  23,159 
Asset impairment charges  -   -   74,600   -   74,600 
Transaction and advisory fees  -   -   -   1,467   1,467 
Loss on sale of plant  -   -   -   766   766 
Reorganization and executive severance charges  -   -   -   2,301   2,301 
Restructuring charges  370   -   -   -   370 
Adjusted EBITDA $67,189  $27,885  $13,542  $(5,953) $102,663 
Adjusted EBITDA Margin %  13.3%  16.9%  5.9%    11.5%
           
Twelve months ended October 31, 2018          
Net sales $485,366  $159,973  $249,813  $(5,367) $889,785 
Cost of sales  371,959   114,894   214,143   (3,974)  697,022 
Gross Margin  113,407   45,079   35,670   (1,393)  192,763 
Gross Margin %  23.4%  28.2%  14.3%    21.7%
Selling, general and administrative  54,169   22,770   17,973   8,846   103,758 
Restructuring charges  1,357   -   129   -   1,486 
Depreciation and amortization  27,248   9,607   14,401   566   51,822 
Operating income (loss)  30,633   12,702   3,167   (10,805)  35,697 
Depreciation and amortization  27,248   9,607   14,401   566   51,822 
EBITDA  57,881   22,309   17,568   (10,239)  87,519 
Transaction and advisory fees  -   -   -   907   907 
Restructuring charges  1,357   -   129   -   1,486 
Adjusted EBITDA $59,238  $22,309  $17,697  $(9,332) $89,912 
Adjusted EBITDA Margin %  12.2%  13.9%  7.1%    10.1%
           


        
QUANEX BUILDING PRODUCTS CORPORATION
SALES ANALYSIS
(In thousands)
(Unaudited)
                
 Three Months Ended
 Twelve Months Ended
 October 31, 2019
 October 31, 2018
 October 31, 2019
 October 31, 2018
                
NA Engineered Components:               
United States - fenestration$127,027  $114,299  $439,536  $412,000 
International - fenestration 7,631   11,552   31,106   39,309 
United States - non-fenestration 4,771   4,693   17,061   18,211 
International - non-fenestration 3,754   4,542   16,134   15,846 
 $143,183  $135,086  $503,837  $485,366 
EU Engineered Components (1):       
International - fenestration$37,599  $37,816  $139,638  $135,415 
International - non-fenestration 6,195   6,675   25,359   24,558 
 $43,794  $44,491  $164,997  $159,973 
NA Cabinet Components:       
United States - fenestration$3,235  $4,096  $13,144  $14,596 
United States - non-fenestration 50,516   61,442   214,211   232,990 
International - non-fenestration 515   570   2,289   2,227 
 $54,266  $66,108  $229,644  $249,813 
Unallocated Corporate & Other:       
Eliminations$(874) $(1,599) $(4,637) $(5,367)
 $(874) $(1,599) $(4,637) $(5,367)
        
Net Sales$240,369  $244,086  $893,841  $889,785 
        
(1) Reflects reductions of $2.1 million and $8.7 million in revenue associated with foreign currency exchange rate impacts for the three and twelve months ended October 31, 2019.