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Quanex Building Products Corporation Fiscal 2011 First Quarter Results

Stocks in this article: NX

Loss from Continuing Operations of $0.13 per Diluted Share

Loss Included $0.09 per Diluted Share of Special Items

Engineered Products Sales up 15% - Outperformed the End Market  

Previously Announced Agreement to Acquire Edgetech I.G.

Repurchased $1.5 million of Common Stock at Average Cost of $17.36 per Share

HOUSTON, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) today released fiscal 2011 first quarter results for the period ending January 31, 2011. Combined segment revenue and combined segment operating loss at the company's two businesses – Engineered Products and Aluminum Sheet Products – were $159.8 million and $0.1 million, respectively. Revenue was up compared to the year ago quarter due to the addition of new customers, new products, and customers building inventory to meet pre-buying demand ahead of the December 31, 2010, expiration of the $1,500 energy efficient window tax credit. Operating income was down due to costs associated with rationalizing operations, higher raw material costs and warranty expenses at Engineered Products, and lower shipped pounds at Aluminum Sheet Products.

First Quarter Highlights

  • On January 31, 2011, an agreement was announced to acquire Edgetech, a technological leader in insulating glass spacer products for residential and commercial windows.
  • Consolidated segment revenue was $159.8 million compared to $151.4 million a year ago. Engineered Products revenue was $84.0 million compared to $72.8 million a year ago; Aluminum Sheet Products revenue was $79.1 million compared to $81.6 million a year ago.
  • Consolidated segment operating loss was $0.1 million compared to income of $7.7 million a year ago.  Engineered Products operating loss was $0.6 million compared to income of $4.1 million a year ago, and included expenses of $5.2 million related to the consolidation and closing of facilities (completed in Q1) and an increase in warranty accruals. Aluminum Sheet Products operating income was $0.6 million, down from $3.6 million a year ago due to lower shipped pounds.
  • Loss from continuing operations before income taxes was $7.7 million compared to income of $1.8 million a year ago. The loss included $1.1 million of transaction costs associated with the pending acquisition of Edgetech I.G.
  • Loss from continuing operations was $4.7 million compared to income of $1.1 million a year ago.
  • Diluted loss per share from continuing operations was $0.13, which included $0.09 of special items, compared to income per share of $0.03 a year ago.

Segment Commentary

Engineered Products is focused on providing OEM window and door customers with value-added fenestration components, products, and systems. Key markets are residential remodeling activity (approx. 60% of sales) and housing starts (approx. 40% of sales).

Engineered Products results (in millions)
  1 st qtr 2011 1 st qtr 2010
Net sales  $84.0 $72.8
Operating income ($0.6) $4.1

"We believe the segment outperformed the end market as our sales were up 15% over the year ago quarter, while Ducker Worldwide data indicated U.S. residential window shipments were down 5%," said David D. Petratis, president and chief executive officer of Quanex Building Products. "The higher sales reflect the continuing progress we are making with our sales initiatives with large and regional window and door customers. I am very pleased with the traction we are gaining with our sales programs and new products, and I look forward to the day when we see real improvement in our end markets."

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