HOUSTON, June 3, 2015 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX), a leading supplier of window and door components, today released results for the second quarter ended April 30, 2015.
"While inclement weather caused a slow start to the building and construction season and our fiscal second quarter, volumes rebounded nicely and allowed us to deliver solid revenue and earnings results," said Chairman, President and Chief Executive Officer Bill Griffiths. "We are starting to see tangible improvements in our vinyl extrusion business, even though we do not expect to reap the full benefits of the capital investments until the fourth quarter. This, together with continued improvements in our end markets, gives us sufficient confidence to confirm our full year guidance of 5 to 7 percent revenue growth and EBITDA of $57 to $63 million," said Griffiths.
Financial highlights for the second quarter include:
- Q2 2015 net sales increased 5.2% (7.0% excluding currency translation impact) to $142 million vs. $135 million in Q2 2014
- Q2 2015 income from continuing operations of $2.3 million vs. loss of ($2.0) million in Q2 2014
- Q2 2015 diluted EPS from continuing operations of $0.07 vs. loss of ($0.05) in Q2 2014
- Q2 2015 EBITDA of $11.5 million vs. $5.7 million in Q2 2014
- Cash balance of $60.0 million and no borrowings on $150 million revolving credit facility
For the first half of the fiscal year, growth was flat in the Northeast and Midwest as a result of another long winter. Volumes increased in the West and Southeast, but were offset by declines in the South, mainly due to a slowdown in Texas. The company's vinyl extrusion business continued to show improvements in key operating metrics, including lower scrap rates, higher labor efficiency and improved on-time delivery to customers.
The Board of Directors declared a quarterly cash dividend of $0.04 per share on the company's common stock, payable June 30, 2015, to shareholders of record on June 15, 2015.
Additional information related to second quarter 2015 results, including a reconciliation of EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) to its most comparable GAAP measure, can be found in the supplemental schedules accompanying this press release.
Conference Call Information
Quanex will host its conference call today, June 3, 2015 at 11:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.quanex.com in the Investors section.
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, future operating results of Quanex, the investments being made in our vinyl business, the future financial condition of Quanex, future uses of cash and other expenditures, expenses and tax rates, expectations relating to the Company's industry, and the Company's future growth, including revenue and EBITDA guidance. The statements set forth in this release are based on current expectations. Actual results or events may differ materially from this release. Factors that could impact future results may include, without limitation, the effect of both domestic and global economic conditions, the impact of competitive products and pricing, the availability and cost of raw materials, and customer demand. For a more complete discussion of factors that may affect the Company's future performance, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2014, under the sections entitled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," in our other documents filed with the Securities and Exchange Commission from time to time. Any forward-looking statements in this press release are made as of the date hereof, and Quanex Building Products Corporation undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
For additional information, please visit www.quanex.com
| QUANEX BUILDING PRODUCTS CORPORATION | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
| Three Months Ended April 30, | Six Months Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Net sales | $ 141,970 | $ 135,208 | $ 269,863 | $ 261,587 |
| Cost of sales | 110,812 | 108,649 | 216,616 | 204,838 |
| Selling, general and administrative | 19,638 | 20,393 | 39,134 | 42,895 |
| Depreciation and amortization | 7,831 | 8,494 | 16,039 | 17,038 |
| Asset impairment charges | -- | 500 | -- | 505 |
| Operating income (loss) | 3,689 | (2,828) | (1,926) | (3,689) |
| Interest expense | (145) | (143) | (286) | (284) |
| Other, net | (115) | (22) | (266) | 74 |
| Income (loss) before income taxes | 3,429 | (2,993) | (2,478) | (3,899) |
| Income tax benefit (expense) | (1,135) | 963 | 1,678 | 658 |
| Income (loss) from continuing operations | 2,294 | (2,030) | (800) | (3,241) |
| Income from discontinued operations, net of taxes | -- | 22,161 | 23 | 19,472 |
| Net income (loss) | $ 2,294 | $ 20,131 | $ (777) | $ 16,231 |
| Earnings (loss) per common share: | ||||
| From continuing operations | $ 0.07 | $ (0.05) | $ (0.02) | $ (0.09) |
| From discontinued operations | $ -- | $ 0.59 | $ -- | $ 0.53 |
| Diluted earnings (loss) per common share: | ||||
| From continuing operations | $ 0.07 | $ (0.05) | $ (0.02) | $ (0.09) |
| From discontinued operations | $ -- | $ 0.58 | $ -- | $ 0.52 |
| Weighted average common shares outstanding: | ||||
| Basic | 33,621 | 37,217 | 34,362 | 37,108 |
| Diluted | 34,166 | 37,838 | 34,362 | 37,726 |
| Cash dividends per share | $ 0.04 | $ 0.04 | 0.08 | 0.08 |
| QUANEX BUILDING PRODUCTS CORPORATION | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| (Unaudited) | ||
| April 30, 2015 | October 31, 2014 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 60,030 | $ 120,384 |
| Accounts receivable, net | 50,210 | 55,193 |
| Inventories, net | 62,994 | 57,358 |
| Deferred income taxes | 23,684 | 21,442 |
| Prepaid and other current assets | 5,433 | 6,052 |
| Total current assets | 202,351 | 260,429 |
| Property, plant and equipment, net | 111,113 | 109,487 |
| Deferred income taxes | 7,367 | 1,545 |
| Goodwill | 68,788 | 70,546 |
| Intangible assets, net | 65,648 | 70,150 |
| Other assets | 5,620 | 4,956 |
| Total assets | $ 460,887 | $ 517,113 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 36,328 | $ 41,488 |
| Accrued liabilities | 26,006 | 32,482 |
| Income taxes payable | -- | 107 |
| Current maturities of long-term debt | 179 | 199 |
| Total current liabilities | 62,513 | 74,276 |
| Long-term debt | 455 | 586 |
| Deferred pension and postretirement benefits | 5,949 | 4,818 |
| Liability for uncertain tax positions | 548 | 4,626 |
| Other liabilities | 11,174 | 11,887 |
| Total liabilities | 80,639 | 96,193 |
| Stockholders' equity: | ||
| Common stock | 376 | 376 |
| Additional paid-in-capital | 250,106 | 249,600 |
| Retained earnings | 208,020 | 202,319 |
| Accumulated other comprehensive loss | (8,210) | (5,708) |
| Treasury stock at cost | (70,044) | (25,667) |
| Total stockholders' equity | 380,248 | 420,920 |
| Total liabilities and stockholders' equity | $ 460,887 | $ 517,113 |
| QUANEX BUILDING PRODUCTS CORPORATION | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||
| (In thousands) | ||
| (Unaudited) | ||
| Six Months Ended April 30, | ||
| 2015 | 2014 | |
| Operating activities: | ||
| Net (loss) income | $ (777) | $ 16,231 |
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
| Depreciation and amortization | 16,039 | 20,078 |
| Stock-based compensation | 2,329 | 1,944 |
| Deferred income tax (benefit) provision | (2,963) | 8,128 |
| Excess tax benefit from share-based compensation | (60) | (639) |
| Asset impairment charges | -- | 1,007 |
| Gain on sale of discontinued operations | -- | (39,645) |
| Other, net | (447) | 1,427 |
| Changes in assets and liabilities, net of effects from acquisitions and dispositions: | ||
| Decrease in accounts receivable | 4,553 | 3,964 |
| Increase in inventory | (6,047) | (22,834) |
| Decrease (increase) in other current assets | 601 | (583) |
| (Decrease) increase in accounts payable | (5,799) | 10,127 |
| Decrease in accrued liabilities | (5,253) | (6,234) |
| Decrease in income taxes payable | 260 | 1,667 |
| Increase in deferred pension and postretirement benefits | 1,201 | 297 |
| Decrease in other long-term liabilities | (128) | (3,539) |
| Other, net | (201) | (2,419) |
| Cash used for operating activities | 3,308 | (11,023) |
| Investing activities: | ||
| Proceeds from sale of discontinued operations | -- | 110,000 |
| Acquisitions, net of cash acquired | -- | (5,161) |
| Capital expenditures | (13,381) | (18,597) |
| Proceeds from property insurance claim | 513 | 1,400 |
| Proceeds from disposition of capital assets | 202 | 304 |
| Cash used in investing activities | (12,666) | 87,946 |
| Financing activities: | ||
| Repayments of other long-term debt | (148) | (144) |
| Common stock dividends paid | (2,803) | (2,989) |
| Issuance of common stock | 4,181 | 2,882 |
| Excess tax benefit from share-based compensation | 60 | 639 |
| Purchase of treasury stock | (52,719) | -- |
| Other | -- | 35 |
| Cash used in financing activities | (51,429) | 423 |
| Effect of exchange rate changes on cash and cash equivalents | 433 | (96) |
| (Decrease) increase in cash and cash equivalents | (60,354) | 77,250 |
| Cash and cash equivalents at beginning of period | 120,384 | 49,734 |
| Cash and cash equivalents at end of period | $ 60,030 | $ 126,984 |
| NOTE: The cash flow statement presentation includes the sources and uses of cash for the discontinued operations as operating, investing and financing cash flows, as applicable, combined with such cash flows for continuing operations, as permitted by U.S. GAAP. | ||
| QUANEX BUILDING PRODUCTS CORPORATION | ||||
| NON-GAAP FINANCIAL MEASURE DISCLOSURE | ||||
| (In thousands) | ||||
| (Unaudited) | ||||
| EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) is a non-GAAP financial measure that Quanex's management uses to measure its operational performance and assist with financial decision-making. EBITDA is a key metric used by management in determining the value of annual incentive awards for its employees. We believe this non-GAAP measure (included under market conditions outlined in our forward-looking guidance) provides a consistent basis for comparison between periods, and will assist investors in understanding our financial performance when comparing our results to other investment opportunities. EBITDA may not be the same as that 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 US GAAP. | ||||
| Three Months Ended April 30, | Six Months Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Quanex | Quanex | Quanex | Quanex | |
| Net income (loss) | $ 2,294 | $ 20,131 | $ (777) | $ 16,231 |
| Income from discontinued operations, net of taxes | -- | (22,161) | (23) | (19,472) |
| Income tax (benefit) expense | 1,135 | (963) | (1,678) | (658) |
| Other, net | 115 | 22 | 266 | (74) |
| Interest expense | 145 | 143 | 286 | 284 |
| Operating income (loss) | 3,689 | (2,828) | (1,926) | (3,689) |
| Depreciation and amortization | 7,831 | 8,494 | 16,039 | 17,038 |
| EBITDA | $ 11,520 | $ 5,666 | $ 14,113 | $ 13,349 |
| Financial Statistics as of April 30, 2015 | ||||
| Book value per common share: | $11.23 | |||
| Total debt to capitalization: | 0.2% | |||
| Return on invested capital: | 3.1% | |||
| Actual number of common shares outstanding: | 33,871,310 | |||
| QUANEX BUILDING PRODUCTS CORPORATION | ||||
| PRE-TAX & AFTER TAX PRESENTATION | ||||
| (In millions, except per share data) | ||||
| (Unaudited) | ||||
| Q2 2015 | Q2 2014 | |||
| Pre-Tax Presentation | $MM | $MM | ||
| Operating Income (Loss) from Continuing Operations As Reported | $ 3.7 | $ (2.8) | ||
| Benefit (Reduction) to Operating Income (Loss): | ||||
| Asset Impairment Charge | -- | 0.5 | ||
| Transaction Related Expenses | 0.1 | -- | ||
| Discontinued ERP Expenses | -- | 0.3 | ||
| Operating Income (Loss) from Continuing Operations As Adjusted | $ 3.8 | $ (2.0) | ||
| Q2 2015 | Q2 2015 | Q2 2014 | Q2 2014 | |
| After-Tax Presentation | $MM | EPS | $MM | EPS |
| Income (Loss) from Continuing Operations As Reported | $ 2.3 | $ 0.07 | $ (2.0) | $ (0.05) |
| Benefit to EPS: | ||||
| Asset Impairment Charge | -- | -- | 0.4 | 0.01 |
| Transaction Related Expenses | 0.1 | -- | -- | -- |
| Discontinued ERP Expenses | -- | -- | 0.2 | 0.01 |
| Diluted Earnings (Loss) from Continuing Operations As Adjusted | $ 2.4 | $ 0.07 | $ (1.4) | $ (0.03) |