Quanex Building Products Corporation (NYSE:NX) Q4 2024 Earnings Call Transcript December 13, 2024 11:00 AM ET Company Participants Scott Zuehlke - SVP, CFO and Treasurer George Wilson - Chairman, President and CEO Conference Call Participants Steven Ramsey - Thompson Research Group Adam Thalhimer - Thompson Davis Reuben Garner - Benchmark Julio Romero - Sidoti & Company Operator Good day, and thank you for standing by. Welcome to the Fourth Quarter and Full Year 2024 Quanex Building Products Corporation Ear ...

Core Insights - Quanex Building Products (NX) reported quarterly earnings of $0.61 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, but down from $0.95 per share a year ago, indicating an earnings surprise of 15.09% [1] - The company achieved revenues of $492.16 million for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 0.59% and significantly up from $295.49 million year-over-year [2] - The stock has underperformed the market, losing about 4% since the beginning of the year compared to the S&P 500's gain of 27.6% [4] Earnings Performance - Over the last four quarters, Quanex has consistently surpassed consensus EPS estimates, achieving this four times [2] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $426.8 million, and for the current fiscal year, it is $2.26 on revenues of $1.86 billion [8] Market Outlook - The estimate revisions trend for Quanex is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [7] - The outlook for the Building Products - Miscellaneous industry is weak, ranking in the bottom 36% of over 250 Zacks industries, which may negatively impact the stock's performance [9]

Financial Performance - Quanex reported net sales of $492.2 million for Q4 2024, a 66.6% increase from $295.5 million in Q4 2023, and $1.28 billion for the full year, up 13.0% from $1.13 billion in 2023[3][5]. - The company experienced a net loss of $13.9 million in Q4 2024, compared to a net income of $27.4 million in Q4 2023, with diluted EPS at ($0.30) versus $0.83[3][5]. - Adjusted EBITDA for Q4 2024 was $81.1 million, up from $50.8 million in Q4 2023, reflecting a margin of 16.5%[3][5]. - Total net sales for the twelve months ended October 31, 2024, reached $1,277,862 million, compared to $1,130,583 million for the same period in 2023, indicating a growth of approximately 13%[31]. - Adjusted EBITDA for the twelve months ended October 31, 2024, was $182,383 million, compared to $109,662 million in 2023[28]. - The company reported a net loss of $13,917 thousand for the three months ended October 31, 2024, compared to a net income of $27,382 thousand in the same period of 2023[19]. - The diluted earnings per share (EPS) for the three months ended October 31, 2024, was $(0.30), down from $0.83 in the prior year[34]. - Cash provided by operating activities for the twelve months ended October 31, 2024, was $88,812 thousand, down from $147,052 thousand in 2023[22]. - Free Cash Flow for the three months ended October 31, 2024, was $(8,172) thousand, compared to $29,553 thousand in the same period of 2023[25]. Debt and Liquidity - Quanex repaid $53.75 million in debt since the Tyman acquisition, with total debt standing at $776.9 million as of October 31, 2024[3][6]. - The leverage ratio of Net Debt to LTM Adjusted EBITDA was 3.7x, while the Debt Covenant Leverage Ratio was 2.3x as of October 31, 2024[6][7]. - Quanex's liquidity was reported at $343.3 million, consisting of $97.7 million in cash and available credit[8]. - The company’s total debt as of October 31, 2024, was $776,926 thousand, a significant increase from $70,000 thousand in 2023[26]. - Total liabilities increased to $1,309,042 thousand as of October 31, 2024, compared to $285,589 thousand as of October 31, 2023[21]. Operational Insights - The Tyman acquisition contributed $203.4 million in net sales during Q4 2024, with overall sales growth attributed to this acquisition[5]. - The company aims to capture targeted synergies from the Tyman acquisition and is focused on integrating the legacy Tyman business[4]. - The company plans to focus on new product development and market expansion strategies to improve future performance[31]. - An Investor and Analyst Day is scheduled for February 6, 2025, to present the new operating structure and guidance for 2025[4][9]. Segment Performance - The United States fenestration segment reported sales of $128,633 million for 2024, down from $138,783 million in 2023, representing a decrease of about 8%[39]. - International fenestration sales increased to $9,323 million in 2024 from $8,081 million in 2023, marking a growth of approximately 15%[39]. - The EU fenestration segment saw a decline in sales from $180,446 million in 2023 to $172,031 million in 2024, a decrease of about 5%[39]. - The United States non-fenestration segment reported sales of $29,050 million in 2024, slightly down from $29,267 million in 2023, a decrease of about 1%[39]. - International non-fenestration sales increased to $5,025 million in 2024 from $4,315 million in 2023, reflecting a growth of approximately 16%[39]. - Tyman's sales for 2024 were $52,761 million, compared to $51,868 million in 2023, indicating a growth of about 2%[39]. - The United States non-fenestration segment reported $49,038 million in sales for 2024, up from $47,092 million in 2023, representing an increase of approximately 4%[39]. Expenses and Margins - Selling, general and administrative expenses for the three months ended October 31, 2024, were $86,891 million, compared to $29,326 million in the same period last year, reflecting a substantial increase[31]. - Interest expense for the three months ended October 31, 2024, was $17,697 million, compared to $1,565 million in the prior year, indicating a significant rise[31]. - The company reported an operating income of $2,830 million for the three months ended October 31, 2024, down from $39,499 million in the same period of 2023[31]. - The company incurred transaction and advisory fees of $26,227 thousand for the three months ended October 31, 2024, compared to $50,767 thousand in the same period last year[35]. - Gross margin for the three months ended October 31, 2024, was $117,050 thousand, with a gross margin percentage of 23.8%, compared to 27.1% in the prior year[35]. - The adjusted net income for the twelve months ended October 31, 2024, was $80,362 million, compared to $90,902 million in the previous year, showing a decrease[31].

Core Insights - Quanex Building Products Corporation reported significant financial results for the fourth quarter and full year ended October 31, 2024, driven by the Tyman acquisition, which closed on August 1, 2024 [1][2]. Financial Performance - Net sales for Q4 2024 reached $492.2 million, a 66.6% increase from $295.5 million in Q4 2023. For the full year, net sales were $1.28 billion, up 13.0% from $1.13 billion in 2023 [2]. - The contribution from the Tyman acquisition accounted for $203.4 million in net sales during Q4 2024. Excluding Tyman, net sales would have declined by 2.3% in Q4 and 5.0% for the full year [2]. - Adjusted net income for Q4 2024 was $28.6 million, compared to $31.2 million in Q4 2023. For the full year, adjusted net income was $80.4 million, down from $90.9 million in 2023 [1][2]. Margin and Profitability - Gross margin for Q4 2024 was $117.1 million, with a gross margin percentage of 23.8%, down from 27.1% in Q4 2023. For the full year, gross margin was $305.6 million, with a margin percentage of 23.9% [1][2]. - Adjusted EBITDA for Q4 2024 was $81.1 million, compared to $50.8 million in Q4 2023, while the full year adjusted EBITDA was $182.4 million, up from $159.6 million in 2023 [1][2]. Debt and Liquidity - The company repaid $53.75 million in debt during Q4 2024, with total debt standing at $776.9 million as of October 31, 2024. The leverage ratio of net debt to LTM adjusted EBITDA was 3.7x [3][4]. - As of October 31, 2024, Quanex's liquidity was $343.3 million, consisting of $97.7 million in cash and availability under its revolving credit facility [4]. Future Outlook - The company anticipates continued demand softness until the spring selling season of 2025, with expectations for improvement in the second half of 2025 due to seasonal trends and improving consumer confidence [1][2]. - An Investor and Analyst Day is scheduled for February 6, 2025, to present the new operating structure and provide guidance for 2025 [5].

Group 1 - Quanex Building Products Corporation plans to release its fourth quarter and full year 2024 results on December 12, 2024, after trading closes on the New York Stock Exchange [1] - A conference call is scheduled for December 13, 2024, at 11:00 a.m. ET to discuss the results, with a live audio webcast available on the company's website [2] - Participants are encouraged to pre-register for the conference call and will receive details for dial-in options via email [2] Group 2 - Quanex is a global manufacturer with capabilities across various end markets, collaborating with leading OEMs to provide innovative solutions in multiple sectors [3] - The company aims to leverage its material science expertise and process engineering to expand into adjacent markets [3]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________ FORM 10-Q ________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-33913 ___________________________ ...

Quanex Building Products Corporation (NX) reported better-than-expected results for the third quarter of fiscal 2024 (ended July 31, 2024) wherein the adjusted earnings and net sales topped the Zacks Consensus Estimate. However, on a year-over-year basis, the bottom and top lines declined. The quarter's results reflect a year-over-year decline due to demand softness across the building products industry due to inflated interest rates and low consumer confidence. This downtrend was also reflected in the redu ...

Quanex Building Products Corporation (NYSE:NX) Q3 2024 Results Conference Call September 6, 2024 11:00 AM ET Company Participants Scott Zuehlke - SVP, CFO & Treasurer George Wilson - Chairman, President & CEO Conference Call Participants Steven Ramsey - TRG Julio Romero - Sidoti & Company Reuben Garner - Benchmark Adam Thalhimer - Thompson Davis Operator Good day, and thank you for standing by, and welcome to the Q3 2024 Quanex Building Products Corporation Earnings Conference Call. At this time, our partic ...

Results point to better times ahead. Quanex Building Products (NX 18.66%) topped Wall Street expectations for the quarter and raised its fullyear outlook, predicting big things from its recently closed acquisition. Wall Street reacted favorably to the news, sending Quanex shares up 20% as of 10:30 a.m. ET. Solid quarter, better guidance Quanex manufactures a wide range of building materials, including windows, doors, vinyl fencing, refrigeration, and cabinetry. Last month, the company closed a $1.1 billion ...

Quanex Building Products (NX) came out with quarterly earnings of $0.73 per share, beating the Zacks Consensus Estimate of $0.70 per share. This compares to earnings of $0.97 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.29%. A quarter ago, it was expected that this housing materials maker would post earnings of $0.53 per share when it actually produced earnings of $0.66, delivering a surprise of 24.53%. Over the last fou ...