Quanex Building Products Corporation Reports First Quarter 2015 Results and Affirms Full Year 2015 Guidance
03 March 2015 - 11:00PM
Quanex Building Products
Corporation (NYSE:NX), a leading supplier of window
and door components, today released results for the first quarter
ended January 31, 2015.
"While we expected roughly flat sales growth in the first
quarter because of a planned contraction in our vinyl business, all
of our other product lines continued to grow faster than the
industry," said Chairman, President and Chief Executive Officer
Bill Griffiths. "This, together with the current trajectory of our
operating performance, gives us sufficient confidence to reaffirm
our full year EBITDA guidance," said Griffiths.
Financial highlights for the first quarter include:
- Q1 2015 net sales increased 1.2% to $128 million vs. $126
million in Q1 2014
- Q1 2015 loss from continuing operations of ($3.1) million vs.
loss of ($1.2) million in Q1 2014
- Q1 2015 diluted loss per share from continuing
operations of ($0.09) vs. ($0.03) in Q1 2014
- Q1 2015 EBITDA of $2.6 million vs. $7.7 million in Q1 2014
- Cash balance of $63.9 million and no borrowings on $150 million
revolving credit facility
At the company's annual shareholder meeting held at the
Company's corporate offices in Houston, Texas on February 26, 2015,
board members Joseph D. Rupp and Robert R. Buck were elected by
Quanex shareholders to serve a new three-year term expiring in
2018. Quanex shareholders also ratified an advisory resolution
approving the compensation of the Company's named executive
officers and the appointment of Grant Thornton LLP as the Company's
independent registered public accounting firm for the fiscal year
ending October 31, 2015.
Additionally, the Board of Directors declared a quarterly cash
dividend of $0.04 per share on the company's common stock, payable
March 31, 2015, to shareholders of record on March 16, 2015.
On September 5, 2014, the Board of Directors authorized a $75
million share repurchase program. The program was completed in
February 2015, resulting in the repurchase of 3,992,229 shares at
an average cost of $18.79 (inclusive of commissions).
Additional information related to first 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, March 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 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 and guidance 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
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|
|
QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
(In thousands, except per share
data) |
(Unaudited) |
|
|
|
|
Three Months
Ended January 31, |
|
2015 |
2014 |
|
|
|
Net sales |
$ 127,893 |
$ 126,379 |
Cost of sales |
105,804 |
96,189 |
Selling, general and administrative |
19,496 |
22,503 |
Depreciation and amortization |
8,208 |
8,544 |
Asset impairment charges |
-- |
5 |
Operating loss |
(5,615) |
(862) |
Interest expense |
(141) |
(141) |
Other, net |
(151) |
96 |
Loss before income
taxes |
(5,907) |
(907) |
Income tax benefit (expense) |
2,813 |
(304) |
Loss from continuing operations |
(3,094) |
(1,211) |
Income (loss) from discontinued operations,
net of taxes |
23 |
(2,689) |
Net loss |
$ (3,071) |
$ (3,900) |
|
|
|
Earnings (loss) per common
share: |
|
|
From continuing operations |
$ (0.09) |
$ (0.03) |
From discontinued operations |
$ -- |
$ (0.08) |
|
|
|
Diluted earnings (loss) per common
share: |
|
|
From continuing operations |
$ (0.09) |
$ (0.03) |
From discontinued operations |
$ -- |
$ (0.08) |
|
|
|
Weighted average common shares
outstanding: |
|
|
Basic |
35,079 |
37,003 |
Diluted |
35,079 |
37,003 |
|
|
|
Cash dividends per share |
$ 0.04 |
$ 0.04 |
|
|
|
|
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QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands) |
(Unaudited) |
|
|
|
|
January 31,
2015 |
October 31,
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 63,924 |
$ 120,384 |
Accounts receivable, net |
39,334 |
55,193 |
Inventories, net |
59,831 |
57,358 |
Deferred income taxes |
24,662 |
21,442 |
Prepaid and other current
assets |
5,715 |
6,052 |
Total current assets |
193,466 |
260,429 |
Property, plant and equipment, net |
110,033 |
109,487 |
Deferred income taxes |
7,295 |
1,545 |
Goodwill |
68,802 |
70,546 |
Intangible assets, net |
67,889 |
70,150 |
Other assets |
5,524 |
4,956 |
Total assets |
$ 453,009 |
$ 517,113 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 31,016 |
$ 41,488 |
Accrued liabilities |
22,920 |
32,482 |
Income taxes payable |
-- |
107 |
Current maturities of long-term
debt |
190 |
199 |
Total current liabilities |
54,126 |
74,276 |
Long-term debt |
568 |
586 |
Deferred pension and postretirement
benefits |
5,309 |
4,818 |
Liability for uncertain tax positions |
548 |
4,626 |
Other liabilities |
11,152 |
11,887 |
Total liabilities |
71,703 |
96,193 |
Stockholders' equity: |
|
|
Common stock |
376 |
376 |
Additional paid-in-capital |
249,497 |
249,600 |
Retained earnings |
207,760 |
202,319 |
Accumulated other comprehensive
loss |
(8,528) |
(5,708) |
Treasury stock at cost |
(67,799) |
(25,667) |
Total stockholders' equity |
381,306 |
420,920 |
Total liabilities and
stockholders' equity |
$ 453,009 |
$ 517,113 |
|
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|
|
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QUANEX BUILDING PRODUCTS
CORPORATION |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW |
(In thousands) |
(Unaudited) |
|
|
|
|
Three Months
Ended January 31, |
|
2015 |
2014 |
Operating activities: |
|
|
Net loss |
$ (3,071) |
$ (3,900) |
Adjustments to reconcile net
income (loss) to cash provided by operating activities: |
|
|
Depreciation and
amortization |
8,208 |
10,294 |
Stock-based
compensation |
1,264 |
1,090 |
Deferred income
tax benefit |
(3,239) |
(1,885) |
Excess tax
benefit from share-based compensation |
(60) |
(1) |
Asset impairment
charges |
-- |
510 |
Other, net |
(478) |
728 |
Changes in assets and
liabilities, net of effects from acquisitions and
dispositions: |
|
|
Decrease in
accounts receivable |
15,323 |
26,654 |
Increase in
inventory |
(2,920) |
(15,998) |
Increase in other
current assets |
(12) |
(594) |
Decrease in
accounts payable |
(10,298) |
(10,894) |
Decrease in
accrued liabilities |
(10,934) |
(15,027) |
Decrease
(increase) in income taxes payable |
(58) |
26 |
Increase in
deferred pension and postretirement benefits |
520 |
915 |
Increase
(decrease) in other long-term liabilities |
13 |
(1,087) |
Other, net |
(5) |
(2,315) |
Cash used for operating activities |
(5,747) |
(11,484) |
Investing activities: |
|
|
Acquisitions, net of cash
acquired |
-- |
(5,161) |
Capital expenditures |
(7,321) |
(6,748) |
Proceeds from property
insurance claim |
513 |
400 |
Proceeds from disposition of
capital assets |
-- |
303 |
Cash used in investing activities |
(6,808) |
(11,206) |
Financing activities: |
|
|
Repayments of other long-term
debt |
(23) |
(26) |
Common stock dividends
paid |
(1,448) |
(1,490) |
Issuance of common stock |
-- |
331 |
Excess tax benefit from
share-based compensation |
60 |
1 |
Purchase of treasury stock |
(42,748) |
-- |
Cash used in financing activities |
(44,159) |
(1,184) |
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
254 |
(55) |
|
|
|
Decrease in cash and cash equivalents |
(56,460) |
(23,929) |
Cash and cash equivalents at beginning of
period |
120,384 |
49,736 |
Cash and cash equivalents at end of
period |
$ 63,924 |
$ 25,807 |
|
|
|
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. |
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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 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 GAAP. |
|
|
|
|
Three Months
Ended January 31, |
|
2015 |
2014 |
|
Quanex |
Quanex |
Net loss |
$ (3,071) |
$ (3,900) |
(Income) loss from discontinued operations,
net of taxes |
(23) |
2,689 |
Income tax (benefit) expense |
(2,813) |
304 |
Other, net |
151 |
(96) |
Interest expense |
141 |
141 |
Operating loss |
(5,615) |
(862) |
Depreciation and amortization |
8,208 |
8,544 |
EBITDA |
$ 2,593 |
$ 7,682 |
|
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|
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|
Financial Statistics as of January
31, 2015 |
|
|
Book value per common share: |
|
$11.22 |
Total debt to capitalization: |
|
0.2% |
Return on invested capital: |
|
7.3% |
Actual number of common shares
outstanding: |
|
33,976,102 |
|
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QUANEX BUILDING PRODUCTS
CORPORATION |
PRE-TAX & AFTER TAX
PRESENTATION |
(In millions, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
Q1 2015 |
|
Q1 2014 |
|
Pre-Tax
Presentation |
$MM |
|
$MM |
|
Operating Loss from Continuing
Operations As Reported |
$ (5.9) |
|
$ (0.9) |
|
Benefit (Reduction) to Operating Income
(Loss): |
|
|
|
|
IG Warranty Reserve
Benefit |
-- |
|
(2.8) |
|
Transaction Related
Expenses |
-- |
|
0.4 |
|
Discontinued ERP Expenses* |
-- |
|
0.3 |
|
Operating Loss from Continuing
Operations As Adjusted |
$ (5.9) |
|
$ (3.0) |
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2015 |
Q1 2015 |
Q1 2014 |
Q1 2014 |
After-Tax
Presentation |
$MM |
EPS |
$MM |
EPS |
Loss from Continuing Operations As
Reported |
$ (3.1) |
$ (0.09) |
$ (1.2) |
$ (0.03) |
Benefit (Reduction) to EPS: |
|
|
|
|
IG Warranty Reserve
Benefit |
-- |
-- |
(2.1) |
(0.06) |
Transaction Related
Expenses |
-- |
-- |
0.2 |
0.01 |
Discontinued ERP Expenses |
-- |
-- |
0.2 |
0.01 |
Diluted Loss from Continuing
Operations As Adjusted * |
$ (3.1) |
$ (0.09) |
$ (2.9) |
$ (0.07) |
|
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* Q1 2014 includes $258K of
accelerated depreciation related to the SAP
Implementation |
CONTACT: Financial Contact:
Marty Ketelaar
713-877-5402
Media Contact:
Valerie Calvert
713-877-5305
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