AG真人官方

Quanex Building Products Announces First Quarter 2025 Results and Reaffirms Full Year 2025 Guidance

Margin Expansion AG真人官方ized on Consolidated Basis
Results Lifted by Contribution from Tyman Acquisition
AG真人官方ization of Cost Synergies from Tyman Acquisition Progressing Well
$65 Million of Debt Repaid Since Closing Tyman Acquisition

HOUSTON, March 10, 2025 (GLOBE NEWSWIRE) -- (NYSE:NX) (鈥淨uanex鈥� or the 鈥淐ompany鈥�) today announced its results for the three months ended January 31, 2025.听听

The Company reported the following selected financial results:

(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, stated, 鈥淭he first quarter of 2025 was a very busy time for Quanex internally and I would like to thank all my Quanex teammates for their continuous efforts as we navigate through the process of integrating legacy Quanex with legacy Tyman. The integration gained speed and traction during the quarter, and we remain confident in our ability to deliver on the $30 million cost synergy target. Volume came in as expected during the first quarter, and we were pleased with the margin expansion and the overall impact of the cost synergies we have realized to date. On a consolidated basis, results for the first quarter were again lifted by the contribution from the Tyman acquisition and we achieved margin expansion. Our continued focus on cash flow and managing working capital enabled us to repay approximately $12 million in debt during the first quarter of 2025, or approximately $65 million since closing the acquisition on August 1, 2024.

鈥淟ooking ahead, despite the soft macro backdrop, we continue to expect an improvement in demand as we enter the spring selling season and through the summer. Longer-term we also expect to benefit from the unwinding of pent-up demand as consumer confidence improves. Our near-term priorities are staying focused on the Tyman integration, capturing the targeted synergies, and generating cash flow to pay down debt.鈥�

First Quarter Results Summary

Quanex reported net sales of $400.0 million during the three months ended January 31, 2025, which represents an increase of 67.3% compared to $239.2 million for the same period of 2024. The increase reflects the contribution from the Tyman acquisition that closed on August 1, 2024. Excluding the contribution from Tyman, net sales would have declined by 6.2% for the first quarter of 2025, mostly due to lower volume. The Company reported a decrease in net sales of 9.2% for the first quarter of 2025 in its North American Fenestration segment. In its North American Cabinet Components segment, Quanex reported an increase of 1.6% in net sales for the first quarter of 2025. Excluding foreign exchange impact, net sales were essentially flat in its European Fenestration segment. In addition, Quanex reported net sales of $175.7 million related to contributions from the Tyman acquisition during the first quarter of 2025. (See Sales Analysis table for additional information)

The increase in adjusted earnings for the three months ended January 31, 2025 was mostly attributable to the contribution from the Tyman acquisition combined with the realization of costs synergies.

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 and has repaid $65 million of debt since closing. As of January 31, 2025, the Company had total debt of $764.3 million and Quanex鈥檚 leverage ratio of Net Debt to LTM Adjusted EBITDA improved slightly to 3.6x. As of January 31, 2025, the Company鈥檚 LTM Net Income was $11.9 million and LTM Adjusted EBITDA was $201.7 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鈥檚 quarterly debt covenant compliance (鈥淒ebt Covenant Leverage Ratio鈥�) for its lenders was 2.2x as of January 31, 2025. The Debt Covenant Leverage Ratio calculation is defined in the Company鈥檚 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 鈥渇inance鈥� 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 January 31, 2024.

Quanex鈥檚 liquidity was $301.5 million as of January 31, 2025, consisting of $50.0 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility due 2029, less letters of credit outstanding.

Share Repurchases

Quanex鈥檚 Board authorized a $75 million share repurchase program in December of 2021. Repurchases under this program will be made in open market transactions or privately negotiated transactions, subject to market conditions, applicable legal requirements, and other relevant factors. The Company repurchased 150,000 shares of common stock for approximately $3.7 million at an average price of $24.66 per share during the three months ended January 31, 2025. As of January 31, 2025, approximately $59.1 million remained under the existing share repurchase authorization.

Outlook

Mr. Wilson commented, 鈥淲e issued official guidance for 2025 as part of our Investor Day held at the New York Stock Exchange on February 6, 2025. Based on our results year-to-date, combined with our operational execution, recent demand trends and conversations with our customers, we are reaffirming our guidance for fiscal 2025. On a consolidated basis for fiscal 2025, we continue to estimate that we will generate net sales of approximately $1.84 billion to $1.86 billion, which we expect will yield Adjusted EBITDA* of $270 million to $280 million.

鈥淥ur capital allocation priorities continue to be paying down debt, evaluating growth opportunities and opportunistically buying back our stock. In addition, the finance and accounting teams are logging long hours working hard in conjunction with our external auditors on re-segmenting the business, so we will report in the new operating segments as soon as practical.鈥�

*When Quanex provides expectations for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures is generally not available without unreasonable effort. Certain items required for such a reconciliation are outside of the Company鈥檚 control and/or cannot be reasonably predicted or estimated, such as the provision for income taxes related to net income.

Conference Call and Webcast Information

The Company has also scheduled a conference call for Tuesday, March 11, 2025 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鈥檚 website at in the Investors section under Presentations & Events.

Participants can pre-register for the conference call using the following link:

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鈥檚 website at 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.听 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 amortization of step-up for purchase price adjustments on inventory, transaction, advisory fees and reorganization costs, restructuring charges related to severance and disposal of software, amortization expense related to intangible assets, pension settlement refund and 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.听 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鈥檚 leverage. In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company鈥檚 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. 听 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鈥檚 residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company鈥檚 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鈥檚 financial performance when comparing results to other investment opportunities.听 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 鈥渆stimated,鈥� 鈥渆xpect,鈥� 鈥渃ould,鈥� 鈥渟hould,鈥� 鈥渂elieve,鈥� 鈥渨ill,鈥� 鈥渕ight,鈥� 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鈥檚 products, timing estimates or any other expectations related to the acquisition of Tyman, the Company鈥檚 future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex鈥檚 industry, and the Company鈥檚 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鈥檚 future performance, please refer to the Company鈥檚 Annual Report on Form 10-K for the fiscal year ended October 31, 2024, and the Company鈥檚 Quarterly Reports on Form 10-Q under the sections entitled 鈥淐autionary Note Regarding Forward-Looking Statements鈥� and 鈥淩isk Factors鈥�. 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.