Quanex Building Products Announces Second Quarter 2023 Results and Reaffirms Full Year 2023 Guidance


Margin Expansion in NA Cabinet Components and EU Fenestration Segments 
Repaid $20 Million in Bank Debt 
Balance Sheet and Liquidity Remain Strong 
Significant Improvement in Cash Provided by Operating Activities 
Synergy Target Achieved for LMI Custom Mixing Acquisition 
Return to Normal Seasonality Trending as Expected 
Remain Cautiously Optimistic on Second Half of 2023

HOUSTON, June 01, 2023 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended April 30, 2023.  

The Company reported the following selected financial results:

QUANEX BUILDING PRODUCTS CORPORATION         
Q2 2023 Earnings Release         
   Three Months Ended April 30, Six Months Ended April 30,
($ in millions, except per share data)  2023  2022  2023  2022 
Net Sales  $273.5  $322.9  $535.5  $589.9 
Gross Margin  $67.2  $73.2  $118.9  $128.4 
Gross Margin %  24.6%  22.7%  22.2%  21.8% 
Net Income  $21.5  $26.5  $23.4  $37.8 
Diluted EPS  $0.65  $0.80  $0.71  $1.13 
          
Adjusted Net Income  $21.7  $26.5  $27.8  $37.8 
Adjusted Diluted EPS  $0.66  $0.80  $0.84  $1.14 
Adjusted EBITDA  $39.9  $45.2  $60.4  $69.6 
Adjusted EBITDA Margin %  14.6%  14.0%  11.3%  11.8% 
          
Cash Provided by (Used For) Operating Activities  $35.3  $19.8  $38.5  ($1.9) 
Free Cash Flow  $27.8  $13.4  $23.4  ($15.7) 

(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, President and Chief Executive Officer, commented, “We are pleased with the results we reported for the second quarter of 2023, and we are now more confident in our belief that we are seeing a return to normal seasonality in our business. Demand improved across all product lines during the second quarter of this year compared to the first quarter of this year, and we executed well from an operational standpoint. The customer inventory rebalancing initiatives that impacted results in our fenestration segments in the first quarter also impacted results in the second quarter, albeit to a lesser degree. However, based on ongoing conversations with our customers, coupled with recent order trends, we do not anticipate a meaningful impact from customer inventory rebalancing initiatives for the remainder of the year. The LMI Custom Mixing business we acquired on November 1, 2022 continues to perform well and we have already achieved our synergy target.     

“When compared to the second quarter of 2022, which was a record quarter, revenue declined in the second quarter of 2023 across all operating segments as ongoing macroeconomic challenges spurred continued market volume declines and some pricing pressure, mostly due to surcharge rollbacks and index pricing mechanism triggers in North America as raw material costs decline. Despite the pressure on revenue, we converted well operationally and realized margin expansion in our North American Cabinet Components and European Fenestration segments. We controlled the things we can control, and we will continue to focus on operational efficiency and flexing our cost structure accordingly.

“Our continued focus on managing working capital is serving us well and we were able to generate enough free cash to buyback $5.6 million of our stock and pay down our bank debt by $20 million during the second quarter. Our balance sheet remains strong, and our leverage ratio improved versus the first quarter of this year.”

Second Quarter 2023 Results Summary   

The Company reported net sales of $273.5 million during the three months ended April 30, 2023, which represents a decrease of 15.3% compared to $322.9 million for the same period of 2022. The decrease was mostly attributable to softer demand, caused in part by customer inventory rebalancing initiatives, lower pricing in North America, and foreign exchange translation impact. Quanex realized a decline in net sales of 11.8% for the second quarter of 2023 in its North American Fenestration segment. Excluding LMI, net sales in the North American Fenestration segment would have declined by approximately 21.8% year-over-year. The Company reported a decline in net sales of 26.6% in its North American Cabinet Components segment and a decline of 7.1% in net sales in its European Fenestration segment, excluding foreign exchange impact. (See Sales Analysis table for additional information)

The decrease in earnings for the three months ended April 30, 2023 was mostly attributable to lower volumes, decreased pricing mainly due to surcharge rollbacks and raw material index pricing mechanisms in North America, foreign exchange translation, and higher interest expense.

Balance Sheet Update

As of April 30, 2023, Quanex had total debt of $135.6 million ($82.5 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 0.6x (0.3x excluding these real-estate leases). As of April 30, 2023, Quanex’s LTM Adjusted EBITDA was $143.3 million and LTM Net Income, the most directly comparable GAAP measure, was $74.0 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 continue to be cautiously optimistic for the second half of our fiscal year, especially as we gain confidence from recent results and our belief that we are seeing a return to normal seasonality. In addition, the long-term underlying fundamentals for the residential housing market remain positive. Based on conversations with our customers and recent demand trends, we are reaffirming prior guidance for fiscal 2023. On a consolidated basis, we continue to estimate that we will generate net sales of $1.12 billion to $1.16 billion, which we expect will yield approximately $130 million to $142 million in Adjusted EBITDA* in fiscal 2023.

Our capital allocation priorities continue to be generating cash, paying down debt, evaluating growth opportunities and opportunistically buying back our 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 also scheduled a conference call for Friday, June 2, 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/BI63b3d21eb76d4b8ba3f1693da2ce90ac

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 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 April 30, Six Months Ended April 30, 
   2023   2022   2023   2022  
          
Net sales $273,535  $322,893  $535,451  $589,933  
Cost of sales  206,372   249,651   416,521   461,485  
Selling, general and administrative  27,371   28,129   64,115   58,952  
Depreciation and amortization  10,456   10,563   21,076   20,820  
Operating income  29,336   34,550   33,739   48,676  
Interest expense  (2,244)  (602)  (4,503)  (1,125) 
Other, net  (29)  453   189   507  
Income before income taxes  27,063   34,401   29,425   48,058  
Income tax expense  (5,551)  (7,879)  (6,004)  (10,297) 
Net income $21,512  $26,522  $23,421  $37,761  
          
Earnings per common share, basic $0.65  $0.80  $0.71  $1.14  
Earnings per common share, diluted $0.65  $0.80  $0.71  $1.13  
          
Weighted average common shares outstanding:         
Basic  32,858   33,157   32,905   33,140  
Diluted  33,017   33,291   33,070   33,292  
          
Cash dividends per share $0.08  $0.08  $0.16  $0.16  
          


QUANEX BUILDING PRODUCTS CORPORATION   
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands)
(Unaudited)
     
  April 30, 2023 October 31, 2022
ASSETS    
Current assets:    
Cash and cash equivalents $43,496  $55,093 
Accounts receivable, net  94,038   96,018 
Inventories, net  114,015   120,890 
Prepaid and other current assets  12,210   8,664 
Total current assets  263,759   280,665 
Property, plant and equipment, net  242,521   180,400 
Operating lease right-of-use assets  45,725   56,000 
Goodwill  185,224   137,855 
Intangible assets, net  80,981   65,035 
Other assets  3,902   4,662 
Total assets $822,112  $724,617 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $64,477  $77,907 
Accrued liabilities  44,655   52,114 
Income taxes payable  -   1,049 
Current maturities of long-term debt  2,113   1,046 
Current operating lease liabilities  7,403   7,727 
Total current liabilities  118,648   139,843 
Long-term debt  132,150   29,628 
Noncurrent operating lease liabilities  39,215   49,286 
Deferred pension benefits  -   3,917 
Deferred income taxes  23,396   22,277 
Other liabilities  15,976   14,831 
Total liabilities  329,385   259,782 
Stockholders’ equity:    
Common stock  372   372 
Additional paid-in-capital  250,427   251,947 
Retained earnings  355,557   337,456 
Accumulated other comprehensive loss  (34,968)  (49,422)
Treasury stock at cost  (78,661)  (75,518)
Total stockholders’ equity  492,727   464,835 
Total liabilities and stockholders' equity $822,112  $724,617 
     


QUANEX BUILDING PRODUCTS CORPORATION   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW  
(In thousands)  
(Unaudited)   
    
 Six Months Ended April 30,
  2023   2022 
Operating activities:   
Net income$23,421  $37,761 
Adjustments to reconcile net income to cash provided by (used for) operating activities:   
Depreciation and amortization 21,076   20,820 
Loss on the disposition of capital assets   
Stock-based compensation 1,398   1,124 
Deferred income tax 97   583 
Other, net 982   1,534 
Changes in assets and liabilities:   
Decrease (increase) in accounts receivable 11,564   (13,008)
Decrease (increase) in inventory 14,799   (39,771)
Increase in other current assets (1,746)  (3,541)
(Decrease) increase in accounts payable (19,825)  7,381 
Decrease in accrued liabilities (14,407)  (15,984)
(Decrease) increase in income taxes payable (1,754)  1,679 
Increase (decrease) in deferred pension benefits 17   (159)
Increase in other long-term liabilities 1,808   443 
Other, net 1,030   (743)
Cash provided by (used for) operating activities 38,460   (1,881)
Investing activities:   
Business acquisition (91,302)  - 
Capital expenditures (15,074)  (13,785)
Proceeds from disposition of capital assets 101   36 
Cash used for investing activities (106,275)  (13,749)
Financing activities:   
Borrowings under credit facilities 102,000   70,500 
Repayments of credit facility borrowings (35,000)  (45,500)
Repayments of other long-term debt (1,306)  (432)
Common stock dividends paid (5,320)  (5,258)
Issuance of common stock 99   173 
Payroll tax paid to settle shares forfeited upon vesting of stock (567)  (1,412)
Purchase of treasury stock (5,593)  (1,569)
Cash used for financing activities 54,313   16,502 
Cash provided by financing activities 1,905   (2,033)
Decrease in cash and cash equivalents (11,597)  (1,161)
Cash and cash equivalents at beginning of period 55,093   40,061 
Cash and cash equivalents at end of period$43,496  $38,900 
    


QUANEX BUILDING PRODUCTS CORPORATION          
Reconciliations of Free Cash Flow and Net Debt         
(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 April 30, Six Months Ended April 30, 
   2023 2022 2023 2022 
Cash provided by (used for) operating activities  $35,325 $19,770 $38,460 ($1,881) 
Capital expenditures  (7,492) (6,415) (15,074) (13,785) 
Free Cash Flow  $27,833 $13,355 $23,386 ($15,666) 
           
           
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 April 30,   
   2023 2022     
Revolving credit facility  $80,000 $63,000     
Finance lease obligations (1)  55,626 13,971     
Total debt (2)  135,626 76,971     
Less: Cash and cash equivalents  43,496 38,900     
Net Debt  $92,130 $38,071     
           
(1) Includes $53.1 million and $12.7 million in real estate lease liabilities considered finance leases under U.S. GAAP as of April, 30 2023 and April 30, 2022, respectively.     
(2) Excludes outstanding letters of credit.          


QUANEX BUILDING PRODUCTS CORPORATION           
NON-GAAP FINANCIAL MEASURE DISCLOSURE           
(In thousands)          
(Unaudited)          
            
Reconciliation of Last Twelve Months Adjusted EBITDA Three Months Ended
April 30, 2023
 Three Months Ended
January 31, 2023
 Three Months Ended
October 31, 2022
 Three Months Ended
July 31, 2022
 Total 
  Reconciliation Reconciliation Reconciliation Reconciliation Reconciliation 
Net income as reported $21,512 $1,909  $24,667  $25,908  $73,996  
Income tax expense  5,551  453   3,329   7,801   17,134  
Other, net  29  (218)  (136)  (398)  (723) 
Interest expense  2,244  2,259   710   724   5,937  
Depreciation and amortization  10,456  10,620   9,555   9,734   40,365  
EBITDA  39,792  15,023   38,125   43,769   136,709  
Cost of sales (1)  48  -   -   -   48  
Selling, general and administrative (1),(2)  63  5,448   564   419   6,494  
Adjusted EBITDA $39,903 $20,471  $38,689  $44,188  $143,251  
            
(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) 
                  
                  
  Three Months Ended Three Months Ended SIx Months Ended SIx Months Ended 
Reconciliation of Adjusted Net Income and Adjusted EPS April 30, 2023 April 30, 2022 April 30, 2023 April 30, 2022 
  Net
Income
 Diluted
EPS
 Net
Income
 Diluted
EPS
 Net
Income
 Diluted
EPS
 Net
Income
 Diluted
EPS
 
Net income as reported $ 21,512 $ 0.65 $ 26,522 $ 0.80 $ 23,421 $ 0.71 $ 37,761 $ 1.13 
Net income reconciling items from below 195 $ 0.01 1 $ - 4,349 $ 0.13 34 $ 0.01 
Adjusted net income and adjusted EPS $ 21,707 $ 0.66 $ 26,523 $ 0.80 $ 27,770 $ 0.84 $ 37,795 $ 1.14 
                  
Reconciliation of Adjusted EBITDA Three Months Ended
April 30, 2023
 Three Months Ended
April 30, 2022
 Six Months Ended
April 30, 2023
 Six Months Ended
April 30, 2022
 
  Reconciliation   Reconciliation   Reconciliation   Reconciliation   
Net income as reported $ 21,512   $ 26,522   $ 23,421   $ 37,761   
Income tax expense 5,551   7,879   6,004   10,297   
Other, net 29   (453)   (189)   (507)   
Interest expense 2,244   602   4,503   1,125   
Depreciation and amortization 10,456   10,563   21,076   20,820   
EBITDA 39,792   45,113   54,815   69,496   
EBITDA reconciling items from below 111   131   5,559   131   
Adjusted EBITDA $ 39,903   $ 45,244   $ 60,374   $ 69,627   
                  
Reconciling Items Three Months Ended
April 30, 2023
 Three Months Ended
April 30, 2022
 Six Months Ended
April 30, 2023
 Six Months Ended
April 30, 2022
 
  Income Statement Reconciling Items Income Statement Reconciling Items Income Statement Reconciling Items Income Statement Reconciling Items 
Net sales $ 273,535 $ - $ 322,893 $ - $ 535,451 $ - $ 589,933 $ - 
Cost of sales 206,372 (48)(1)249,651 - 416,521 (48)(1)461,485 - 
Selling, general and administrative 27,371 (63)(1),(2)28,129 (131)(2)64,115 (5,511)(1),(2)58,952 (131)(2)
EBITDA 39,792 111 45,113 131 54,815 5,559 69,496 131 
Depreciation and amortization 10,456 - 10,563 - 21,076 - 20,820 - 
Operating income 29,336 111 34,550 131 33,739 5,559 48,676 131 
Interest expense (2,244) - (602) - (4,503) - (1,125) - 
Other, net (29) 132(3)453 (123)(3)189 90(3)507 (82)(3)
Income before income taxes 27,063 243 34,401 8 29,425 5,649 48,058 49 
Income tax expense (5,551) (48)(4)(7,879) (7)(4)(6,004) (1,300)(4)(10,297) (15)(4)
Net income $ 21,512 $ 195 $ 26,522 $ 1 $ 23,421 $ 4,349 $ 37,761 $ 34 
                  
Diluted earnings per share $ 0.65   $ 0.80   $ 0.71   $ 1.13   
                  
                  
(1) Loss on damage to manufacturing facilities caused by weather.         
(2) Transaction and advisory fees.         
(3) Foreign currency transaction losses (gains).         
(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 April 30, 2023          
Net sales $156,975  $63,763  $53,518  $(721) $273,535 
Cost of sales  122,472   40,452   43,731   (283)  206,372 
Gross Margin  34,503   23,311   9,787   (438)  67,163 
Gross Margin %  22.0%   36.6%   18.3%     24.6% 
Selling, general and administrative  14,158   8,452   5,971   (1,210)  27,371 
Depreciation and amortization  5,050   2,353   2,970   83   10,456 
Operating income  15,295   12,506   846   689   29,336 
Depreciation and amortization  5,050   2,353   2,970   83   10,456 
EBITDA  20,345   14,859   3,816   772   39,792 
Loss on damage to manufacturing facilities (Cost of sales)  35   -   13   -   48 
Loss on damage to manufacturing facilities (SG&A)  -   -   200   -   200 
Transaction and advisory fees  -   -   -   (137)  (137)
Adjusted EBITDA $20,380  $14,859  $4,029  $635  $39,903 
Adjusted EBITDA Margin %  13.0%   23.3%   7.5%     14.6% 
           
Three months ended April 30, 2022          
Net sales $177,908  $73,427  $72,878  $(1,320) $322,893 
Cost of sales  137,571   49,708   63,175   (803)  249,651 
Gross Margin  40,337   23,719   9,703   (517)  73,242 
Gross Margin %  22.7%   32.3%   13.3%     22.7% 
Selling, general and administrative  14,078   8,601   5,218   232   28,129 
Depreciation and amortization  4,038   2,522   3,917   86   10,563 
Operating income (loss)  22,221   12,596   568   (835)  34,550 
Depreciation and amortization  4,038   2,522   3,917   86   10,563 
EBITDA  26,259   15,118   4,485   (749)  45,113 
Transaction and advisory fees  -   -   -   131   131 
Adjusted EBITDA $26,259  $15,118  $4,485  $(618) $45,244 
Adjusted EBITDA Margin %  14.8%   20.6%   6.2%     14.0% 
           
Six months ended April 30, 2023          
Net sales $309,955  $118,715  $108,192  $(1,411) $535,451 
Cost of sales  247,189   78,155   91,787   (610)  416,521 
Gross Margin  62,766   40,560   16,405   (801)  118,930 
Gross Margin %  20.3%   34.2%   15.2%     22.2% 
Selling, general and administrative  27,453   15,957   10,844   9,861   64,115 
Depreciation and amortization  10,295   4,701   5,904   176   21,076 
Operating income (loss)  25,018   19,902   (343)  (10,838)  33,739 
Depreciation and amortization  10,295   4,701   5,904   176   21,076 
EBITDA  35,313   24,603   5,561   (10,662)  54,815 
Loss on damage to manufacturing facilities (Cost of sales)  35   -   13   -   48 
Loss on damage to manufacturing facilities (SG&A)  -   -   200   -   200 
Transaction and advisory fees  -   -   -   5,311   5,311 
Adjusted EBITDA $35,348  $24,603  $5,774  $(5,351) $60,374 
Adjusted EBITDA Margin %  11.4%   20.7%   5.3%     11.3% 
           
Six months ended April 30, 2022          
Net sales $324,539  $132,341  $135,231  $(2,178) $589,933 
Cost of sales  253,535   90,935   118,248   (1,233)  461,485 
Gross Margin  71,004   41,406   16,983   (945)  128,448 
Gross Margin %  21.9%   31.3%   12.6%     21.8% 
Selling, general and administrative  28,455   15,904   10,488   4,105   58,952 
Depreciation and amortization  8,177   5,091   7,380   172   20,820 
Operating income (loss)  34,372   20,411   (885)  (5,222)  48,676 
Depreciation and amortization  8,177   5,091   7,380   172   20,820 
EBITDA  42,549   25,502   6,495   (5,050)  69,496 
Transaction and advisory fees  -   -   -   131   131 
Adjusted EBITDA $42,549  $25,502  $6,495  $(4,919) $69,627 
Adjusted EBITDA Margin %  13.1%   19.3%   4.8%     11.8% 
           


QUANEX BUILDING PRODUCTS CORPORATION
 
SALES ANALYSIS
 
(In thousands)
 
(Unaudited)
 
          
  Three Months Ended April 30, Six Months Ended April 30, 
   2023   2022   2023   2022  
          
NA Fenestration:(1)        
 United States - fenestration$120,756  $156,843  $241,523  $285,210  
 International - fenestration 8,350   11,094   13,477   20,230  
 United States - non-fenestration 24,334   7,077   47,400   13,793  
 International - non-fenestration 3,535   2,894   7,555   5,306  
  $156,975  $177,908  $309,955  $324,539  
EU Fenestration:(2)        
 International - fenestration$47,903  $54,863  $90,257  $99,484  
 International - non-fenestration 15,860   18,564   28,458   32,857  
  $63,763  $73,427  $118,715  $132,341  
NA Cabinet Components:        
 United States - fenestration$4,219  $4,666  $8,127  $8,431  
 United States - non-fenestration 48,526   67,383   98,575   125,150  
 International - non-fenestration 773   829   1,490   1,650  
  $53,518  $72,878  $108,192  $135,231  
Unallocated Corporate & Other:        
 Eliminations$(721) $(1,320) $(1,411) $(2,178) 
  $(721) $(1,320) $(1,411) $(2,178) 
          
Net Sales$273,535  $322,893  $535,451  $589,933  
          
(1) Includes the net sales from the acquisition of LMI of $17.8 million and $34.2 million for the three and six months ended April 30, 2023, respectively. 
(2) Reflects a reduction of $4.8 million and $10.8 million in revenue associated with foreign currency exchange rate impacts for the three and six months ended April 30, 2023, respectively.