Quanex Building Products Announces Fourth Quarter and Full Year 2024 Results

Rhea-AI Summary

Quanex Building Products (NYSE:NX) reported its Q4 and full-year 2024 results, highlighting the impact of its recent Tyman acquisition. Q4 net sales increased 66.6% to $492.2 million, while full-year sales rose 13% to $1.28 billion. The company reported a Q4 net loss of $13.9 million (EPS -$0.30) compared to net income of $27.4 million (EPS $0.83) in Q4 2023.

Since closing the Tyman acquisition on August 1, 2024, Quanex has repaid $53.75 million in debt. The company's leverage ratio stands at 3.7x Net Debt to LTM Adjusted EBITDA, with total debt of $776.9 million. Management expects current demand softness to persist until spring 2025, with improvement anticipated in the second half of the year.

Positive

• Q4 net sales increased 66.6% to $492.2 million
• Full-year sales grew 13% to $1.28 billion
• Repaid $53.75 million in debt since Tyman acquisition
• Full-year adjusted EBITDA margin improved to 14.3% from 14.1%
• Integration of Tyman acquisition progressing ahead of schedule

Negative

• Q4 net loss of $13.9 million compared to $27.4 million profit in Q4 2023
• Q4 gross margin declined to 23.8% from 27.1% year-over-year
• Full-year gross margin decreased to 23.9% from 24.5%
• High leverage ratio of 3.7x Net Debt to LTM Adjusted EBITDA
• Expecting continued demand softness through early 2025

Insights

Financial Analyst

The Q4 and FY2024 results show significant growth driven by the Tyman acquisition, with Q4 net sales up 66.6% to $492.2 million. However, excluding Tyman, organic sales declined 2.3% in Q4 and 5.0% for the full year due to lower volumes. The company's ability to repay $53.75 million in debt since the Tyman acquisition demonstrates strong cash management. The current leverage ratio of 3.7x Net Debt to LTM Adjusted EBITDA, while elevated due to the acquisition, shows controlled financial management. Margin expansion was achieved despite macro headwinds, with consolidated adjusted EBITDA margin improving to 14.3% for FY2024.

Market Research Analyst

The company's performance reflects broader housing market challenges, with softness expected to persist into early 2025. However, management's outlook suggests potential improvement in H2 2025 driven by seasonality and pent-up demand release as interest rates decline. The Tyman integration is progressing ahead of schedule, indicating strong execution of this transformative acquisition. The upcoming Investor Day in February 2025 will be important as it will unveil the new operating structure and 2025 guidance. The North American Fenestration segment showed resilience with margin expansion despite revenue decline, highlighting effective cost management in a challenging environment.

Contribution from Tyman Acquisition Boosts Results
Margin Expansion Realized on Consolidated Basis for Full Year
$53.75 Million of Debt Repaid Since Closing Tyman Acquisition
Integration of Transformative Acquisition Progressing Ahead of Schedule
Realization of Synergies Ongoing

HOUSTON, Dec. 12, 2024 (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, 2024.  

The Company reported the following selected financial results:

			Three Months Ended October 31,				Twelve Months Ended October 31,
($ in millions, except per share data)			2024		2023		2024		2023
Net Sales			$492.2		$295.5		$1,277.9		$1,130.6
Gross Margin			$117.1		$80.0		$305.6		$277.5
Gross Margin %			23.8%		27.1%		23.9%		24.5%
Net (Loss) Income			($13.9)		$27.4		$33.1		$82.5
Diluted EPS			($0.30)		$0.83		$0.90		$2.50
Adjusted Net Income			$28.6		$31.2		$80.4		$90.9
Adjusted Diluted EPS			$0.61		$0.95		$2.19		$2.75
Adjusted EBITDA			$81.1		$50.8		$182.4		$159.6
Adjusted EBITDA Margin %			16.5%		17.2%		14.3%		14.1%
Cash Provided by Operating Activities			$5.5		$44.5		$88.8		$147.1
Free Cash Flow			($8.2)		$29.6		$51.7		$109.7
(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, Chairman, President and Chief Executive Officer, commented, “On a consolidated basis, results for the fourth quarter and full year were boosted by the contribution from the Tyman acquisition. Results from the legacy Quanex business were in-line with our expectations for both the fourth quarter and full year. We are pleased with profitability despite the soft macro environment we experienced throughout 2024. Overall, we executed on our plan from an operational standpoint, and we executed on our long-term profitable growth strategy by closing on the transformative Tyman acquisition in August. In addition, our continued focus on cash flow and managing working capital enabled us to repay approximately $54 million in debt since closing the acquisition on August 1, 2024.  

“As we transition into 2025, we expect the current demand softness to persist until the spring selling season, but our expectations are that results will improve in the second half of 2025 due to typical seasonality combined with the benefit from unwinding pent up demand as interest rates continue to trend lower and consumer confidence improves. We will continue to focus on integrating the legacy Tyman business and capturing the targeted synergies. We have also settled on a new operating structure that is designed around our core competencies, which should enable us to capitalize on existing commercial opportunities and tap into new innovative solutions.   Furthermore, we continue to be excited about building a stronger, more profitable company over time and creating additional value for our shareholders. We have scheduled an Investor and Analyst Day on February 6, 2025, to unveil the ‘new’ Quanex, which will include providing detail on the revamped operating structure, guidance for 2025 and an update on our long-term profitable growth strategy.”  

Fourth Quarter and Fiscal 2024 Results Summary   

Quanex reported net sales of $492.2 million during the three months ended October 31, 2024, which represents an increase of 66.6% compared to $295.5 million for the same period of 2023. The Company reported net sales of $1.28 billion during the twelve months ended October 31, 2024, which represents an increase of 13.0% compared to $1.13 billion for the same period of 2023. The increases reflect the contribution from the Tyman acquisition that closed on August 1, 2024. Excluding the contribution from Tyman, net sales would have declined by 2.3% for the fourth quarter of 2024 and 5.0% for the full year, largely due to lower volume. Quanex reported a decline in net sales of 4.7% for the fourth quarter of 2024 and a decline of 2.6% in net sales for the full year in its North American Fenestration segment. In its North American Cabinet Components segment, Quanex reported an increase of 1.7% in net sales for the fourth quarter and a decline of 7.9% in net sales for the full year. Excluding foreign exchange impact, the Company realized a decrease in net sales of 1.2% for the fourth quarter and a decrease of 8.9% in net sales for the full year in its European Fenestration segment. In addition, Quanex reported net sales of $203.4 million related to the Tyman acquisition during the fourth quarter of 2024.   (See Sales Analysis table for additional information)

The increase in adjusted earnings for the three months and twelve months ended October 31, 2024 was mostly attributable to the contribution from the Tyman acquisition; however, the increase in adjusted earnings was also due in part to the lower cost of sales, including labor, related to lower volumes and deflation in the price of raw materials. Quanex was able to realize margin expansion in the fourth quarter in its North American Fenestration segment mainly due to effective cost control. In addition, the Company was also able to realize margin expansion on a consolidated basis for the full year, primarily driven by the contribution from the Tyman acquisition.

Balance Sheet & Liquidity Update

The Company borrowed $770 million ($500 Term Loan A and $270 on Senior Secured Revolving Credit Facility) to acquire Tyman on August 1, 2024. Quanex repaid $53.75 million in debt during the fourth quarter of 2024. As of October 31, 2024, the Company had total debt of $776.9 million and Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA was 3.7x. As of October 31, 2024, the Company’s LTM Net Income was $33.1 million and LTM Adjusted EBITDA was $182.4 million (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)

The leverage ratio for Quanex’s quarterly debt covenant compliance (“Debt Covenant Leverage Ratio”) for its lenders was 2.3x as of October 31, 2024. The Debt Covenant Leverage Ratio calculation is defined in the Company’s Amendment No. 1 to its Second Amended and Restated Credit Agreement, which was filed with the SEC on June 12, 2024. In general, the main difference is that the Debt Covenant Leverage Ratio excludes real-estate leases that are considered “finance” leases under U.S. GAAP and is calculated on a proforma basis to include Adjusted EBITDA from the Tyman acquisition, $30 million of EBITDA for the synergy target related to the acquisition and only cash from domestic subsidiaries. The Debt Covenant Leverage Ratio would be 2.1x if calculated using the cash and cash equivalents amount on the balance sheet as of October 31, 2024.

Quanex’s liquidity was $343.3 million as of October 31, 2024, consisting of $97.7 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2029, less letters of credit outstanding.

Investor and Analyst Day

The Company announced it will host an Investor and Analyst Day at the New York Stock Exchange, 11 Wall St. New York, NY 1005, on February 6, 2025. The event will begin at 9:00 a.m. ET and conclude at approximately 11:00 a.m. ET. All investors and analysts that plan to attend should RSVP for the event by January 23, 2025, by contacting Quanex’s Senior Vice President, Chief Financial Officer & Treasurer, Scott Zuehlke, by email (scott.zuehlke@quanex.com).

Presentation content and a live audio webcast will be made available on Quanex’s website at http://www.quanex.com in the Investors section under Events & Presentations. A replay of the webcast will be posted following the live event.

Conference Call and Webcast Information

The Company has also scheduled a conference call for Friday, December 13, 2024 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/BIef39998f168c4cff8d9ed1561cb1cc48

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, solar, refrigeration, custom mixing, building access and cabinetry markets.  Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.

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), Adjusted EBITDA and LTM 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) on the economy and the demand for Quanex’s products, timing estimates or any other expectations related to the Acquisition, 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, 2023, 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
		Three Months Ended October 31,								Twelve Months Ended October 31,
			2024				2023				2024				2023
Net sales		$	492,161			$	295,492			$	1,277,862			$	1,130,583
Cost of sales			375,111				215,473				972,238				853,059
Selling, general and administrative			86,891				29,326				190,470				123,957
Depreciation and amortization			27,329				11,194				60,328				42,866
Operating income			2,830				39,499				54,826				110,701
Interest expense			(17,697	)			(1,565	)			(20,593	)			(8,136	)
Other, net			(2,671	)			(6,110	)			7,849				(5,519	)
(Loss) income before income taxes			(17,538	)			31,824				42,082				97,046
Income tax benefit (expense)			3,621				(4,442	)			(9,023	)			(14,545	)
Net (loss) income		$	(13,917	)		$	27,382			$	33,059			$	82,501
(Loss) earnings per common share, basic		$	(0.30	)		$	0.84			$	0.91			$	2.51
(Loss) earnings per common share, diluted		$	(0.30	)		$	0.83			$	0.90			$	2.50
Weighted average common shares outstanding:
Basic			47,015				32,753				36,416				32,819
Diluted			47,015				32,991				36,648				33,026
Cash dividends per share		$	0.08			$	0.08			$	0.32			$	0.32

QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
		October 31, 2024				October 31, 2023
ASSETS
Current assets:
Cash and cash equivalents		$	97,744			$	58,474
Restricted Cash			5,251				-
Accounts receivable, net			197,689				97,311
Inventories			275,550				97,959
Income taxes receivable			5,937				8,298
Prepaid and other current assets			29,097				11,558
Total current assets			611,268				273,600
Property, plant and equipment, net			402,466				250,664
Operating lease right-of-use assets			126,715				46,620
Deferred tax assets			3,845				-
Goodwill			574,711				182,956
Intangible assets, net			597,909				74,115
Other assets			2,874				3,188
Total assets		$	2,319,788			$	831,143
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	124,404			$	74,371
Accrued liabilities			103,623				50,319
Income taxes payable			6,620				384
Current maturities of long-term debt			25,745				2,365
Current operating lease liabilities			12,475				7,224
Total current liabilities			272,867				134,663
Long-term debt			737,198				66,435
Noncurrent operating lease liabilities			117,560				40,361
Deferred income taxes			162,304				29,133
Liabilities for uncertain tax positions			-				250
Other liabilities			19,113				14,747
Total liabilities			1,309,042				285,589
Stockholders’ equity:
Common stock			513				372
Additional paid-in-capital			701,008				251,576
Retained earnings			430,405				409,318
Accumulated other comprehensive loss			(46,428	)			(38,141	)
Treasury stock at cost			(74,752	)			(77,571	)
Total stockholders’ equity			1,010,746				545,554
Total liabilities and stockholders' equity		$	2,319,788			$	831,143

QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands) (Unaudited)
	Twelve Months Ended October 31,
		2024				2023
Operating activities:
Net income	$	33,059			$	82,501
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		60,328				42,866
(Gain) loss on disposition of capital assets		(5,218	)			278
Stock-based compensation		2,952				2,521
Deferred income tax		(15,336	)			5,147
Charge for deferred loan costs and debt discount		3,469				-
Gain on deal contingent foreign exchange forward currency contract		(6,512	)			-
Other, net		4,495				1,529
Changes in assets and liabilities:
Decrease in accounts receivable		973				6,969
Decrease in inventory		33,484				30,024
Decrease (increase) in other current assets		4,297				(1,880	)
Decrease in accounts payable		(35,824	)			(11,611	)
Increase (decrease) in accrued liabilities		6,250				(4,249	)
Increase (decrease) in income taxes receivable		9,139				(9,009	)
(Decrease) increase in other long-term liabilities		(7,155	)			683
Other, net		411				1,283
Cash provided by operating activities		88,812				147,052
Investing activities:
Business acquisition		(848,614	)			(91,302	)
Capital expenditures		(37,086	)			(37,390	)
Proceeds from disposition of capital assets		15,046				253
Cash used for investing activities		(870,654	)			(128,439	)
Financing activities:
Borrowings under credit facilities		785,000				102,000
Repayments of credit facility borrowings		(83,750	)			(100,000	)
Debt issuance costs		(13,808	)			-
Borrowings (repayments) of other long-term debt		(296,206	)			(2,567	)
Issuance of common stock		450,633				1,215
Proceeds from deal contingent foreign exchange forward currency contract		6,512				-
Common stock dividends paid		(11,972	)			(10,639	)
Payroll tax paid to settle shares forfeited upon vesting of stock		(1,193	)			(567	)
Purchase of treasury stock		-				(5,593	)
Cash provided (used for) by financing activities		835,216				(16,151	)
Effect of exchange rate changes on cash and cash equivalents		(8,853	)			919
Increase in cash, cash equivalents and restricted cash		44,521				3,381
Cash, cash equivalents and restricted cash at beginning of period		58,474				55,093
Cash, cash equivalents and restricted cash at end of period	$	102,995			$	58,474

QUANEX BUILDING PRODUCTS CORPORATION FREE CASH FLOW AND NET DEBT 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,
			2024		2023		2024		2023
Cash provided by operating activities			$5,479		$44,493		$88,812		$147,052
Capital expenditures			(13,651)		(14,940)		(37,086)		(37,390)
Free Cash Flow			($8,172)		$29,553		$51,726		$109,662
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 October 31,
			2024		2023
Term loan facility			$493,750		$0
Revolving credit facility			222,500		15,000
Finance lease obligations (1)			60,676		55,000
Total debt (2)			776,926		70,000
Less: Cash and cash equivalents			97,744		58,474
Net Debt			$679,182		$11,526
(1) Includes $50.3 million and $51.5 million in real estate lease liabilities considered finance leases under U.S. GAAP as of October 31, 2024 and October 31, 2023, respectively.
(2) Excludes outstanding letters of credit.

QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE LAST TWELVE MONTHS ADJUSTED EBITDA RECONCILIATION (In thousands, except per share data) (Unaudited)
Reconciliation of Last Twelve Months Adjusted EBITDA		Three Months Ended October 31, 2024				Three Months Ended July 31, 2024				Three Months Ended April 30, 2024				Three Months Ended January 31, 2024				Total
		Reconciliation				Reconciliation				Reconciliation				Reconciliation				Reconciliation
Net (loss) income as reported		$	(13,917	)		$	25,350			$	15,377			$	6,249			$	33,059
Income tax (benefit) expense			(3,621	)			6,688				4,314				1,642				9,023
Other, net			2,671				(9,474	)			(4	)			(1,042	)			(7,849	)
Interest expense			17,697				878				950				1,068				20,593
Depreciation and amortization			27,329				10,953				10,894				11,152				60,328
EBITDA			30,159				34,395				31,531				19,069				115,154
Cost of sales (1),(2)			887				1,507				631				-				3,025
Selling, general and administrative (1),(2),(3),(4)			50,004				6,133				7,862				205				64,204
Adjusted EBITDA		$	81,050			$	42,035			$	40,024			$	19,274			$	182,383
(1) Expense (gain) related to plant closure.
(2) Loss on damage to manufacturing facilities caused by weather.
(3) Transaction and advisory fees.
(4) Amortization of step-up for purchase price adjustments on inventory and accounts receivable.

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, 2024								Three Months Ended October 31, 2023								Twelve Months Ended October 31, 2024								Twelve Months Ended October 31, 2023
		Net Income				Diluted EPS				Net Income				Diluted EPS				Net Income				Diluted EPS				Net Income				Diluted EPS
Net (loss) income as reported		$	(13,917	)		$	(0.30	)		$	27,382			$	0.83			$	33,059			$	0.90			$	82,501			$	2.50
Net (loss) income reconciling items from below			42,528			$	0.91				3,851			$	0.12				47,303			$	1.29				8,401			$	0.25
Adjusted net income and adjusted EPS		$	28,611			$	0.61			$	31,233			$	0.95			$	80,362			$	2.19			$	90,902			$	2.75
Reconciliation of Adjusted EBITDA		Three Months Ended October 31, 2024								Three Months Ended October 31, 2023								Twelve Months Ended October 31, 2024								Twelve Months Ended October 31, 2023
		Reconciliation								Reconciliation								Reconciliation								Reconciliation
Net (loss) income as reported		$	(13,917	)						$	27,382							$	33,059							$	82,501
Income tax (benefit) expense			(3,621	)							4,442								9,023								14,545
Other, net			2,671								6,110								(7,849	)							5,519
Interest expense			17,697								1,565								20,593								8,136
Depreciation and amortization			27,329								11,194								60,328								42,866
EBITDA			30,159								50,693								115,154								153,567
EBITDA reconciling items from below			50,891								74								67,229								6,028
Adjusted EBITDA		$	81,050							$	50,767							$	182,383							$	159,595
Reconciling Items		Three Months Ended October 31, 2024								Three Months Ended October 31, 2023								Twelve Months Ended October 31, 2024								Twelve Months Ended October 31, 2023
		Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items
Net sales		$	492,161			$	-			$	295,492			$	-			$	1,277,862			$	-			$	1,130,583			$	-
Cost of sales			375,111				(887	)	(1)		215,473				35		(2)		972,238				(3,025	)	(1)		853,059				(13	)	(2)
Selling, general and administrative			86,891				(50,004	)	(1),(3),(4)		29,326				(109	)	(2),(3)		190,470				(64,204	)	(1),(3),(4)		123,957				(6,015	)	(2),(3)
EBITDA			30,159				50,891				50,693				74				115,154				67,229				153,567				6,028
Depreciation and amortization			27,329				-				11,194				-				60,328				-				42,866				-
Operating income			2,830				50,891				39,499				74				54,826				67,229				110,701				6,028
Interest expense			(17,697	)			-				(1,565	)			-				(20,593	)			-				(8,136	)			-
Other, net			(2,671	)			3,271		(5)		(6,110	)			5,232		(5)		7,849				(6,738	)	(5)		(5,519	)			5,196		(5)
(Loss) Income before income taxes			(17,538	)			54,162				31,824				5,306				42,082				60,491				97,046				11,224
Income tax benefit (expense)			3,621				(11,634	)	(6)		(4,442	)			(1,455	)	(6)		(9,023	)			(13,188	)	(6)		(14,545	)			(2,823	)	(6)
Net (loss) income		$	(13,917	)		$	42,528			$	27,382			$	3,851			$	33,059			$	47,303			$	82,501			$	8,401
Diluted (loss) earnings per share		$	(0.30	)						$	0.83							$	0.90							$	2.50
(1) (Expense) gain related to plant closure.
(2) Loss on damage to manufacturing facilities caused by weather.
(3) Transaction and advisory fees.
(4) Amortization of step-up for purchase price adjustments on inventory and accounts receivable.
(5) Pension settlement (refund) expense, losses (gains) on foreign exchange forward currency contract and foreign currency transaction losses (gains).
(6)Tax impact of net income reconciling items.

QUANEX BUILDING PRODUCTS CORPORATION SELECTED SEGMENT DATA (In thousands) (Unaudited)
This table provides gross margin, operating income (loss), 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				Tyman				Unallocated Corp & Other				Total
Three months ended October 31, 2024
Net sales		$	172,031			$	65,075			$	52,761			$	203,435			$	(1,141	)		$	492,161
Cost of sales			127,448				40,258				44,136				163,946				(677	)			375,111
Gross Margin			44,583				24,817				8,625				39,489				(464	)			117,050
Gross Margin %			25.9%				38.1%				16.3%				19.4%								23.8%
Selling, general and administrative (1)			10,072				8,310				5,373				44,453				18,683				86,891
Depreciation and amortization			5,107				2,715				3,004				16,438				65				27,329
Operating income (loss)			29,404				13,792				248				(21,402	)			(19,212	)			2,830
Depreciation and amortization			5,107				2,715				3,004				16,438				65				27,329
EBITDA			34,511				16,507				3,252				(4,964	)			(19,147	)			30,159
Expense related to plant closure (Cost of sales)			887				-				-				-				-				887
Net gain related to plant closure (SG&A)			(5,299	)			-				-				-				-				(5,299	)
Amortization of step-up for purchase price adjustments on inventory and accounts receivable			-				-				-				29,076				-				29,076
Transaction and advisory fees			-				-				-				10,359				15,868				26,227
Adjusted EBITDA		$	30,099			$	16,507			$	3,252			$	34,471			$	(3,279	)		$	81,050
Adjusted EBITDA Margin %			17.5%				25.4%				6.2%				16.9%								16.5%
Three months ended October 31, 2023
Net sales		$	180,446			$	64,170			$	51,868			$	-			$	(992	)		$	295,492
Cost of sales			135,490				39,070				41,488				-				(575	)			215,473
Gross Margin			44,956				25,100				10,380				-				(417	)			80,019
Gross Margin %			24.9%				39.1%				20.0%												27.1%
Selling, general and administrative (1)			15,272				8,354				5,135				-				565				29,326
Depreciation and amortization			5,211				2,714				3,220				-				49				11,194
Operating income (loss)			24,473				14,032				2,025				-				(1,031	)			39,499
Depreciation and amortization			5,211				2,714				3,220				-				49				11,194
EBITDA			29,684				16,746				5,245				-				(982	)			50,693
Loss on damage to manufacturing facilities (Cost of sales)			(35	)			-				-				-				-				(35	)
Loss on damage to manufacturing facilities (SG&A)			-				-				(131	)			-				-				(131	)
Transaction and advisory fees			-				-				-				-				240				240
Loss on sale of plant			-				-				-				-				-				-
Adjusted EBITDA		$	29,649			$	16,746			$	5,114			$	-			$	(742	)		$	50,767
Adjusted EBITDA Margin %			16.4%				26.1%				9.9%												17.2%
Twelve months ended October 31, 2024
Net sales		$	650,058			$	230,712			$	198,424			$	203,435			$	(4,767	)		$	1,277,862
Cost of sales			498,378				144,585				168,414				163,946				(3,085	)			972,238
Gross Margin			151,680				86,127				30,010				39,489				(1,682	)			305,624
Gross Margin %			23.3%				37.3%				15.1%				19.4%								23.9%
Selling, general and administrative (1)			56,630				31,318				20,727				44,453				37,342				190,470
Depreciation and amortization			20,994				10,420				12,244				16,438				232				60,328
Operating income (loss)			74,056				44,389				(2,961	)			(21,402	)			(39,256	)			54,826
Depreciation and amortization			20,994				10,420				12,244				16,438				232				60,328
EBITDA			95,050				54,809				9,283				(4,964	)			(39,024	)			115,154
Expense related to plant closure (Cost of sales)			3,025				-				-				-				-				3,025
Net gain related to plant closure (SG&A)			(4,196	)			-				-				-				-				(4,196	)
Amortization of step-up for purchase price adjustments on inventory and accounts receivable			-				-				-				29,076				-				29,076
Transaction and advisory fees			-				-				-				10,359				28,965				39,324
Adjusted EBITDA		$	93,879			$	54,809			$	9,283			$	34,471			$	(10,059	)		$	182,383
Adjusted EBITDA Margin %			14.4%				23.8%				4.7%				16.9%								14.3%
Twelve months ended October 31, 2023
Net sales		$	667,482			$	250,774			$	215,445			$	-			$	(3,118	)		$	1,130,583
Cost of sales			517,805				158,491				178,210				-				(1,447	)			853,059
Gross Margin			149,677				92,283				37,235				-				(1,671	)			277,524
Gross Margin %			22.4%				36.8%				17.3%												24.5%
Selling, general and administrative (1)			56,979				32,350				21,074				-				13,554				123,957
Depreciation and amortization			20,539				9,849				12,208				-				270				42,866
Operating income (loss)			72,159				50,084				3,953				-				(15,495	)			110,701
Depreciation and amortization			20,539				9,849				12,208				-				270				42,866
EBITDA			92,698				59,933				16,161				-				(15,225	)			153,567
Loss on damage to manufacturing facilities (Cost of sales)			-				-				13				-				-				13
Loss on damage to manufacturing facilities (SG&A)			-				-				69				-				-				69
Transaction and advisory fees			-				-				-				-				5,946				5,946
Adjusted EBITDA		$	92,698			$	59,933			$	16,243			$	-			$	(9,279	)		$	159,595
Adjusted EBITDA Margin %			13.9%				23.9%				7.5%												14.1%
(1) Includes stock-based compensation expense for the three and twelve months ended October 31, 2024 of $2.0 million and $1.7 million, respectively, and $7.4 million and $9.3 million for the comparable prior year periods.

QUANEX BUILDING PRODUCTS CORPORATION SALES ANALYSIS (In thousands) (Unaudited)
		Three Months Ended October 31,								Twelve Months Ended October 31,
			2024				2023				2024				2023
NA Fenestration:
	United States - fenestration	$	128,633			$	138,783			$	491,307			$	518,396
	International - fenestration		9,323				8,081				29,882				30,100
	United States - non-fenestration		29,050				29,267				110,246				103,090
	International - non-fenestration		5,025				4,315				18,623				15,896
		$	172,031			$	180,446			$	650,058			$	667,482
EU Fenestration: (1)
	International - fenestration	$	54,665			$	49,862			$	193,935			$	191,871
	International - non-fenestration		10,410				14,308				36,777				58,903
		$	65,075			$	64,170			$	230,712			$	250,774
NA Cabinet Components:
	United States - fenestration	$	3,710			$	4,286			$	14,913			$	16,899
	United States - non-fenestration		49,038				47,092				182,494				195,866
	International - non-fenestration		13				490				1,017				2,680
		$	52,761			$	51,868			$	198,424			$	215,445
Tyman:
	United States - fenestration	$	127,749			$	-			$	127,749			$	-
	International - fenestration		75,082				-				75,082				-
	United States - non-fenestration		604				-				604				-
		$	203,435			$	-			$	203,435			$	-
Unallocated Corporate & Other:
	Eliminations	$	(1,141	)		$	(992	)		$	(4,767	)		$	(3,118	)
		$	(1,141	)		$	(992	)		$	(4,767	)		$	(3,118	)
Net Sales		$	492,161			$	295,492			$	1,277,862			$	1,130,583
(1) Reflects an increase of $1.7 million and $2.5 million in revenue associated with foreign currency exchange rate impacts for the three and twelve months ended October 31, 2024, respectively.

FAQ

What was Quanex's Q4 2024 revenue growth compared to Q4 2023?

Quanex's Q4 2024 revenue grew 66.6% to $492.2 million compared to $295.5 million in Q4 2023, primarily due to the Tyman acquisition.

How much debt has Quanex (NX) repaid since the Tyman acquisition?

Quanex has repaid $53.75 million in debt since closing the Tyman acquisition on August 1, 2024.

What is Quanex's current debt leverage ratio?

As of October 31, 2024, Quanex's leverage ratio of Net Debt to LTM Adjusted EBITDA was 3.7x, with total debt of $776.9 million.

What is Quanex's outlook for demand in 2025?

Quanex expects demand softness to persist until spring 2025, with improvement anticipated in the second half of 2025 due to seasonality and unwinding pent-up demand as interest rates decline.

When will Quanex hold its Investor and Analyst Day for 2025?

Quanex will host its Investor and Analyst Day on February 6, 2025, at the New York Stock Exchange.