Quanex Building Products (US:NX)2021-12-17 19:14Financial Data and Key Metrics Changes - Net sales increased by 14.2% in Q4 2021 and 25.9% for the full year 2021, marking record growth for both periods [4] - Net income for Q4 2021 was $20.9 million or $0.62 per diluted share, compared to $22.2 million or $0.67 per diluted share in Q4 2020 [6] - For fiscal 2021, net income was $57 million or $1.70 per diluted share, up from $38.5 million or $1.17 per diluted share in fiscal 2020 [6] - Adjusted EBITDA decreased by 5.3% to $37.3 million in Q4 2021, while it increased by 21.3% to $126.8 million for the full year 2021 [8] Business Line Data and Key Metrics Changes - North American Fenestration segment saw net sales growth of 10.1% in Q4 and 19.6% for the full year [5] - North American Cabinet Components segment reported a 15.9% increase in Q4 and 17.1% for the full year [5] - European Fenestration segment experienced a 17.6% increase in Q4 and 45.6% for the full year, excluding foreign exchange impact [5] Market Data and Key Metrics Changes - Demand remains strong across all segments, supported by low existing housing inventory and low mortgage rates [23] - The company noted that supply chain disruptions have created significant challenges, impacting delivery schedules and inventory management [20][21] Company Strategy and Development Direction - The company aims for margin expansion in fiscal 2022, although it expects this to be more pronounced in the second half of the year [12][13] - A new $75 million share repurchase program has been authorized, indicating a commitment to returning value to shareholders [34] - The company is focusing on operational improvements and has raised starting wages to attract talent [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand but acknowledged ongoing supply chain challenges that create uncertainty [12][20] - The company is not providing specific guidance for 2022 due to the unpredictable nature of supply chain disruptions [37][38] - There is a belief that if the global supply chain stabilizes, it could lead to revenue and earnings growth in 2022 [39] Other Important Information - Cash provided by operating activities was $78.6 million for the 12 months ended October 31, 2021, down from $100.8 million in the previous year [10] - The leverage ratio improved to 0.1x as of October 31, 2021, indicating a strong balance sheet [12] Q&A Session Summary Question: What was the revenue growth driven by in Q4? - Management indicated that price adjustments were the primary driver of revenue growth, although volume also increased [42][44] Question: How much of the full year revenue growth was due to price versus volume? - For the full year, approximately 15% to 20% of the 26% revenue growth was attributed to volume [62] Question: How does the company compare to competitors regarding supply chain issues? - Management believes they are performing equally or better than competitors in acquiring raw materials, with no aggressive pricing strategies observed in the market [63][64] Question: What are the CapEx expectations for fiscal 2022? - The company expects to maintain CapEx guidance around $30 million to $35 million for 2022 [59] Question: What is the outlook for the overall windows market in North America and Europe? - The North American window market is expected to see low single-digit growth, while Europe is predicted to remain relatively flat year-over-year [53][55]