Quanex Announces Positive Third Quarter Results

September 7th, 2018 by Drew Vass, Executive Editor

Quanex Building Products released its third quarter results for 2018, and announced a significant increase in return capital to their shareholders. This comes through a 100 percent increase in the quarterly cash dividend and a $60 million share repurchases authorization.

The net sales for the third quarter were $239.9 million, making the net sales for 2018 $645.7 million. Both numbers are up from the previous year with the net sales for the third quarter of 2017 being $229.4 million.

The net income for the third quarter was $10.8 million, making the net income for 2018 $19.8 million. Again, these numbers are up from this time last year with the third quarter net income being $10.2 million and the net income at the end of nine months $8.0 million for 2017.

The company attributes the increase in net sales to the market growth and to the increase in prices of raw materials. They attribute the growth in net income to lower depreciation and amortization, along with a lower tax rate.

The total fenestration sales analysis was also up in 2018. Below is a comprehensive chart displaying the sales growth. The first two columns are the numbers for the third quarter only, and the last two are the numbers for all three quarters combined. Numbers are in the thousands.

 

 

July 31, 2018July 31, 2017July 31, 2018July 31, 2017
NA Engineered Components:
United States – fenestration$112,914$107,193$297,700$289,231
International – fenestration11,8519,95927,75824,945

 

“Underlying growth remains healthy in our North American and European Engineered Components segments,” says Bill Griffiths, Chairman, president and CEO of Quanex.

“We are also pleased that our strong free cash flow generation in the third quarter facilitated a further reduction of our leverage ratio to 2.0x Net Debt to LTM Adjusted EBITDA as of July 31, 2018. In addition, our Board of Directors has approved a robust capital return program, including both a 100% increase to our quarterly cash dividend and a $60 million share repurchase program, which reflects our strong balance sheet, commitment to returning capital to shareholders and confidence in our prospects for growth and value creation.

“As part of a strategic review process, our Board of Directors and management team, with the support of outside advisors, recently undertook a thorough review of Quanex’s strategy and business, and evaluated a broad range of strategic alternatives to maximize shareholder value. Our Board of Directors unanimously concluded that the best path forward for the Company and its shareholders at this time is the continued execution of our strategic plan and the accelerated return of capital. We remain open to and will continue to consider all opportunities to create additional shareholder value.”

Quanex’s Board of Directors unanimously decided to give shareholders a cash dividend of $0.08 per share on the Company’s common stock, representing a 100% increase compared to the prior dividend, payable September 28, 2018, to shareholders of record on September 14, 2018.

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