Quanex Building Products (NX) - 2024 Q1 - Quarterly Results

Financial Performance - Quanex reported net sales of $239.2 million for Q1 2024, an 8.7% decrease from $261.9 million in Q1 2023[2] - Net income for Q1 2024 was $6.2 million, up from $1.9 million in Q1 2023, with diluted EPS increasing to $0.19 from $0.06[2] - Adjusted EBITDA for the three months ended January 31, 2024, was $19.274 million, compared to $20.471 million for the same period in 2023, a decline of 5.8%[30] - The company reported net sales of $239,155,000 for the three months ended January 31, 2024, down from $261,916,000 in the same period last year, a decrease of 8.7%[31] - Diluted earnings per share increased to $0.19 for the three months ended January 31, 2024, compared to $0.06 for the same period in 2023, representing a growth of 216.7%[32] - EBITDA for the three months ended January 31, 2024, was $19.069 million, compared to $15.023 million in the same period last year[35] Cost and Expenses - Gross margin increased to 21.5% in Q1 2024 from 19.8% in Q1 2023, despite lower sales[2] - Selling, general and administrative expenses totaled $32.363 million for the three months ended January 31, 2024, compared to $36.744 million in the same period last year[34] - The company reported a decrease in cost of sales to $187.723 million for the three months ended January 31, 2024, down from $210.149 million in the prior year[34] Debt and Cash Flow - The company repaid $5 million in bank debt during the quarter, maintaining a strong balance sheet[1] - As of January 31, 2024, total debt was $65.2 million, with a leverage ratio of Net Debt to LTM Adjusted EBITDA at 0.1x[4] - Total debt decreased to $65,211,000 as of January 31, 2024, down from $155,122,000 a year earlier, indicating a reduction of 58%[24] - Net Debt as of January 31, 2024, was $20,789,000, significantly lower than $112,067,000 in the previous year, a decrease of 81%[24] - Cash provided by operating activities was $3.9 million, compared to $3.1 million in Q1 2023[2] - Cash provided by operating activities increased to $3,854,000 in Q1 2024 from $3,135,000 in Q1 2023, reflecting a growth of 23%[21] - Free Cash Flow for the three months ended January 31, 2024, was negative $5,726,000, compared to negative $4,447,000 in the same period last year[23] Market Segments - The North American Fenestration segment saw a 3.3% decline in net sales, while the Cabinet Components segment experienced a 21.1% decline[3] - North America fenestration sales decreased to $147.995 million from $152.980 million year-over-year, reflecting a decline of 3.9%[37] - The company’s international fenestration sales in the EU decreased to $49.437 million from $54.952 million year-over-year, a decline of 10.0%[37] Future Outlook - Quanex expects to generate approximately $1.1 billion in net sales for fiscal 2024, with an estimated Adjusted EBITDA of $145 million to $150 million[5] - The company remains cautiously optimistic about demand recovery in the second half of 2024[5] - Quanex plans to leverage its material science expertise to expand into adjacent markets[7]