Over $45 Million of Bank Debt Paid Down in 2017
Growth and Margin Expansion Expected in 2018

HOUSTON, Dec. 11, 2017 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the quarter and fiscal year ended October 31, 2017.

Bill Griffiths, Chairman, President and Chief Executive Officer, commented, “Fiscal 2017 was a year with a lot of moving parts related to eliminating low margin business from the portfolio, consolidating facilities and redeploying assets; however, we are now well positioned for growth and margin expansion in 2018.  The hurricanes that hit Texas and Florida in August and September created some softness and inefficiencies during the fourth quarter, mostly in our North American Cabinet Components segment, but we anticipate incremental demand for our products in the coming months and years as rebuilding efforts continue.  Looking past the noise, the underlying growth rate for our legacy fenestration business in the U.S. was 6.1% in fiscal 2017, which is more than double Ducker’s latest window shipment estimate of 2.9% growth for the twelve months ended September 30, 2017.  Free cash flow continued to be strong in fiscal 2017, which allowed us to repay more than $45 million of bank debt.  Looking ahead, we will continue to focus on generating cash and deleveraging the balance sheet.”

Fourth Quarter and Fiscal Year 2017 Results Summary   

Quanex reported the following selected financial results:

     
  Three Months Ended October 31, Twelve Months Ended October 31,
  2017 2016 2017 2016
Net Sales $233.0 $249.2 $866.6 $928.2
Net Income (loss) $10.7 $5.4 $18.7 ($1.9)
Diluted EPS $0.31 $0.16 $0.54 ($0.05)
         
Adjusted Net Income $13.1 $15.7 $27.0 $27.7
Adjusted Diluted EPS $0.37 $0.45 $0.77 $0.82
Adjusted EBITDA $33.3 $34.6 $99.0 $110.3
(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table and Selected Segment Data table for additional information) 
         

The decreases in net sales were largely driven by the Company’s decision to exit business that does not meet its financial objectives. (See Sales Analysis table for additional information)

The decreases in adjusted earnings were primarily attributable to lower volumes and short-term inefficiencies related to transitioning away from less profitable business throughout the year coupled with the impact of hurricanes in the U.S. during the fourth quarter.  (See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table and Selected Segment Data table for additional information)

As of October 31, 2017, Quanex’s leverage ratio of Net Debt to LTM Adjusted EBITDA was 2.3x.  The Company remains focused on generating Free Cash Flow to pay down debt and expects to end fiscal 2018 with a leverage ratio below 2.0x.  (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

Business Update

Quanex divested its non-core wood flooring business, Owens Flooring, on October 31, 2017.  Owens Flooring contributed $9.4 million of revenue and net income of less than $0.1 million, excluding the loss on the sale of the plant, in fiscal 2017.

Outlook

Bill Griffiths, Chairman, President and Chief Executive Officer, stated, “We continue to be encouraged by the macro indicators that impact our business and believe this housing cycle has several years to run at low-to-mid single-digit growth rates for Quanex as a whole.  In fact, after adjusting for the foreign exchange impact, the divestiture of the wood flooring business and other business we consciously shed, the consolidated business grew at 4.4% in 2017.  We anticipate a similar growth rate in 2018.  As a result, we expect to generate net sales of $890 million to $900 million and Adjusted EBITDA* of $103 million to $108 million.”    

*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’s control and/or cannot be reasonably predicted or estimated, such as the provision for income taxes.

Conference Call and Webcast Information
The Company has scheduled a conference call for Tuesday, December 12, 2017, at 11:00 a.m. ET (10:00 a.m. CT).  To participate in the conference call dial (877) 388-2139 for domestic callers and (541) 797-2983 for international callers, in both cases using the conference passcode 5996538, and ask for the Quanex call a few minutes prior to the start time.  A link to the live audio webcast will also be available on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.  A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through December 19, 2017.  To access the replay dial (855) 859-2056 for domestic callers and (404) 537-3406 for international callers, in both cases referencing conference passcode 5996538. 

About Quanex

Quanex Building Products Corporation is an industry-leading manufacturer of components sold to Original Equipment Manufacturers (OEMs) in the building products industry.  Quanex designs and produces energy-efficient fenestration products in addition to kitchen and bath cabinet components.

For more information contact Scott Zuehlke, Vice President, Investor Relations & Treasurer, at 713-877-5327 or scott.zuehlke@quanex.com.

Non-GAAP Terminology Definitions and Disclaimers

Adjusted Net Income (Loss) (defined as net income further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, gain/loss on the sale of fixed assets, one-time employee benefit adjustment, restructuring charges, adjustments related to accelerated depreciation and amortization for restructured PP&E and intangible assets, interest expense adjustments related to the write off of deferred loan costs, unamortized original issuance discount and prepayment call premium related to debt refinance, 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) and Adjusted EBITDA (defined as EBITDA further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, gain/loss on the sale of fixed assets, one-time employee benefit adjustment and restructuring charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making.  Net Debt is calculated using the sum of current maturities of long-term debt and long-term debt, minus cash and cash equivalents.  The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that Quanex believes is useful to investors and financial analysts in evaluating the Company’s leverage.  In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in Quanex’s credit agreement.  Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures.   Quanex believes that the presented non-GAAP measures provide a consistent basis for comparison between periods, and will assist investors in understanding the Company’s financial performance when comparing results to other investment opportunities.  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 “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the Company’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex’s industry, and the Company’s 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’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2016, under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”.  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.

               
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share data)
(Unaudited)
         
         
  Three Months Ended October 31, Twelve Months Ended October 31,
   2017   2016   2017   2016 
         
Net sales $232,959  $249,171  $866,555  $928,184 
Cost of sales  178,325   188,168   672,162   710,644 
Selling, general and administrative  23,142   26,480   97,981   114,910 
Restructuring charges  1,467   529   4,550   529 
Depreciation and amortization  13,794   13,387   57,495   53,146 
Asset impairment charges  -   12,602   -   12,602 
Operating income  16,231   8,005   34,367   36,353 
Interest expense  (2,469)  (2,174)  (9,595)  (36,498)
Other, net  158   (1,443)  730   (5,479)
Income (loss) before income taxes  13,920   4,388   25,502   (5,624)
Income tax (expense) benefit  (3,188)  1,043   (6,819)  3,765 
Net income (loss) $10,732  $5,431  $18,683  $(1,859)
         
Income (loss) per common share, basic $0.31  $0.16  $0.55  $(0.05)
Income (loss) per common share, diluted $0.31  $0.16  $0.54  $(0.05)
         
Weighted average common shares outstanding:        
Basic  34,493   33,953   34,230   33,876 
Diluted  35,169   34,536   34,837   33,876 
         
Cash dividends per share $0.04  $0.04  $0.16  $0.16 
         


       
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
  October 31, 2017 October 31, 2016
ASSETS    
Current assets:    
Cash and cash equivalents $17,455  $25,526 
Accounts receivable, net  79,411   83,625 
Inventories, net  87,529   84,335 
Prepaid and other current assets  7,406   10,488 
Total current assets  191,801   203,974 
Property, plant and equipment, net  211,131   198,497 
Goodwill  222,194   217,035 
Intangible assets, net  139,778   154,180 
Other assets  8,975   6,667 
Total assets $773,879  $780,353 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $44,150  $47,781 
Accrued liabilities  38,871   55,101 
Income taxes payable  2,192   732 
Current maturities of long-term debt  21,242   10,520 
Total current liabilities  106,455   114,134 
Long-term debt  218,184   259,011 
Deferred pension and postretirement benefits  4,433   8,167 
Deferred income taxes  21,960   18,322 
Other liabilities  16,000   12,888 
Total liabilities  367,032   412,522 
Stockholders’ equity:    
Common stock  375   376 
Additional paid-in-capital  255,719   254,540 
Retained earnings  225,704   214,047 
Accumulated other comprehensive loss  (25,076)  (38,765)
Treasury stock at cost  (49,875)  (62,367)
Total stockholders’ equity  406,847   367,831 
Total liabilities and stockholders' equity $773,879  $780,353 
     


      
QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
    
 Twelve Months Ended October 31,
  2017   2016 
Operating activities:   
Net income (loss)$18,683  $(1,859)
Adjustments to reconcile net income (loss)' to cash provided by operating activities:  
Depreciation and amortization 57,495   53,146 
Stock-based compensation 5,189   6,089 
Deferred income tax (112)  (8,469)
Excess tax benefit from share-based compensation (248)  (136)
Loss (gain) on the disposition of capital assets 1,528   (20)
Charge for deferred loan costs and debt discount -   16,022 
Asset impairment charge -   12,602 
Gain on involuntary conversion -   - 
Other, net 1,741   339 
Changes in assets and liabilities, net of effects from acquisitions:   
Decrease in accounts receivable 5,378   796 
(Increase) decrease in inventory (3,240)  5,346 
Increase in other current assets 186   2,503 
Decrease in accounts payable (4,893)  (2,273)
(Decrease) increase in accrued liabilities (8,497)  1,246 
Increase (decrease) in income taxes 4,670   (365)
(Decrease) increase in deferred pension and postretirement benefits (271)  588 
Increase in other long-term liabilities 1,382   956 
Other, net (437)  (93)
Cash provided by operating activities 78,554   86,418 
Investing activities:   
Acquisitions, net of cash acquired (8,497)  (245,904)
Capital expenditures (34,564)  (37,243)
Proceeds from disposition of capital assets 1,937   1,044 
Cash used for investing activities (41,124)  (282,103)
Financing activities:   
Borrowings under credit facilities 53,500   634,800 
Repayments of credit facility borrowings (98,875)  (422,875)
Debt issuance costs -   (11,435)
Repayments of other long-term debt (2,722)  (2,185)
Common stock dividends paid (5,516)  (5,470)
Issuance of common stock 7,953   3,400 
Excess tax benefit from share-based compensation 248   136 
Cash (used for) provided by financing activities (45,412)  196,371 
Effect of exchange rate changes on cash and cash equivalents (89)  1,715 
(Decrease) increase in cash and cash equivalents (8,071)  2,401 
Cash and cash equivalents at beginning of period 25,526   23,125 
Cash and cash equivalents at end of period$17,455  $25,526 
    


                         
QUANEX BUILDING PRODUCTS CORPORATION
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands, except per share data)
(Unaudited)
                     
                     
Reconciliation of Adjusted Net Income and Adjusted EPS Three Months Ended
October 31, 2017		  Three Months Ended
October 31, 2016		  Twelve Months Ended
October 31, 2017		  Twelve Months Ended
October 31, 2016		 
  Net
Income		 Diluted
EPS		  Net
Income		 Diluted
EPS		  Net
Income		 Diluted
EPS		  Net
Income		 Diluted
EPS		 
Net income (loss) as reported $10,732  $0.31   $5,431  $0.16   $18,683  $0.54   $(1,859) $(0.05) 
Reconciling items from below  2,337   0.06    10,214   0.29    8,303   0.23    29,551   0.87  
Adjusted Net income and Adjusted EPS $13,069  $0.37   $15,645  $0.45   $26,986  $0.77   $27,692  $0.82  
                     
Reconciliation of Adjusted EBITDA Three Months Ended
October 31, 2017		  Three Months Ended
October 31, 2016		  Twelve Months Ended
October 31, 2017		  Twelve Months Ended
October 31, 2016		 
  Reconciliation    Reconciliation    Reconciliation    Reconciliation   
Net income (loss) as reported $10,732     $5,431     $18,683     $(1,859)   
Income tax (expense) benefit  3,188      (1,043)     6,819      (3,765)   
Other, net  (158)     1,443      (730)     5,479    
Interest expense  2,469      2,174      9,595      36,498    
Depreciation and amortization  13,794      13,387      57,495      53,146    
EBITDA  30,025      21,392      91,862      89,499    
Reconciling items from below  3,263      13,164      7,156      20,790    
Adjusted EBITDA $33,288     $34,556     $99,018     $110,289    
                     
Reconciling Items Three Months Ended
October 31, 2017		  Three Months Ended
October 31, 2016		  Twelve Months Ended
October 31, 2017		  Twelve Months Ended
October 31, 2016		 
  Income
Statement		 Reconciling
Items		  Income
Statement		 Reconciling
Items		  Income
Statement		 Reconciling
Items		  Income
Statement		 Reconciling
Items		 
Net sales $232,959  $-   $249,171  $-   $866,555  $-   $928,184  $-  
Cost of sales  178,325   -    188,168   (32) (1)  672,162   (104) (1)  710,644   (2,671) (1)
Selling, general and administrative  23,142   (1,796) (2)  26,480   (1) (2)  97,981   (2,502) (2)  114,910   (4,988) (2)
Restructuring charges  1,467   (1,467) (3)  529   (529) (3)  4,550   (4,550) (3)  529   (529) (3)
EBITDA  30,025   3,263    33,994   562    91,862   7,156    102,101   8,188  
Asset impairment charges  -      12,602   (12,602) (4)  -      12,602   (12,602) (4)
Depreciation and amortization  13,794   (731) (5)  13,387   (1,295) (5)  57,495   (6,233) (4)  53,146   (1,295) (5)
Operating income (loss)  16,231   3,994    8,005   14,459    34,367   13,389    36,353   22,085  
Interest expense  (2,469)  -    (2,174)  -    (9,595)  -    (36,498)  16,677  (5)
Other, net  158   (111) (6)  (1,443)  1,501  (6)  730   (625) (6)  (5,479)  5,380  (6)
Income (loss) before income taxes  13,920   3,883    4,388   15,960    25,502   12,764    (5,624)  44,142  
Income tax (expense) benefit  (3,188)  (1,546) (7)  1,043   (5,746) (7)  (6,819)  (4,461) (7)  3,765   (14,591) (7)
Net income (loss) $10,732  $2,337   $5,431  $10,214   $18,683  $8,303   $(1,859) $29,551  
                     
Diluted earnings (loss) per share $0.31     $0.16     $0.54     $(0.05)   
                     
(1) Relates solely to purchase price accounting inventory step-up impact from HL Plastics acquisition.
(2) Acquisition related transaction costs, and the loss on the sale of plant in 4Q17.
(3) Restructuring charges relate to the closure of several manufacturing plant facilities.
(4) Impairment of goodwill at United States vinyl business in 2016.
(5) Accelerated depreciation and amortization for restructured PP&E and intangible assets.
(6) Foreign currency transaction (gains) losses.
(7) Impact on a with and without basis.
                     


              
QUANEX BUILDING PRODUCTS CORPORATION
Segment Reconciliation
(In thousands)
(Unaudited)
           
The following tables reconcile the Company's segment presentation to account for the transfer of operating facilities from the North American Engineered Components segment to the Cabinet Components segment, as previously reported in our earnings release for the three-months and twelve-months ended October 31, 2016, to the current presentation:
           
  NA Engineered
Components		 EU Engineered
Components		 NA Cabinet
Components		 Unallocated
Corp & Other		 Total
Three months ended October 31, 2016          
As previously reported          
Net sales $154,000  $39,953 $56,485 $(1,267) $249,171
Cost of sales  111,491   27,754  49,844  (921)  188,168
Selling, general and administrative  16,548   5,817  2,554  1,561   26,480
Restructuring costs  387   -  142  -   529
Depreciation and amortization  8,874   2,148  2,239  126   13,387
Asset impairment charges  12,602   -  -  -   12,602
Operating income (loss) $4,098  $4,234 $1,706 $(2,033) $8,005
           
Reclassification          
Net sales $(6,007) $- $6,598 $(591) $-
Cost of sales  (4,329)  -  4,920  (591)  -
Selling, general and administrative  (237)  -  194  43   -
Restructuring costs  -   -  -  -   -
Depreciation and amortization  (131)  -  131  -   -
Asset impairment charges  -   -  -  -   -
Operating income (loss) $(1,310) $- $1,353 $(43) $-
           
Current presentation          
Net sales $147,993  $39,953 $63,083 $(1,858) $249,171
Cost of sales  107,162   27,754  54,764  (1,512)  188,168
Selling, general and administrative  16,311   5,817  2,748  1,604   26,480
Restructuring costs  387   -  142  -   529
Depreciation and amortization  8,743   2,148  2,370  126   13,387
Asset impairment charges  12,602   -  -  -   12,602
Operating income (loss) $2,788  $4,234 $3,059 $(2,076) $8,005
           
Twelve months ended October 31, 2016          
As previously reported          
Net sales $560,029  $150,203 $223,391 $(5,439) $928,184
Cost of sales  415,925   104,452  193,560  (3,293)  710,644
Selling, general and administrative  62,934   23,187  14,920  13,869   114,910
Restructuring costs  387   -  142  -   529
Depreciation and amortization  30,298   9,339  12,948  561   53,146
Asset impairment charges  12,602   -  -  -   12,602
Operating income (loss) $37,883  $13,225 $1,821 $(16,576) $36,353
           
Reclassification          
Net sales $(21,780) $- $24,728 $(2,948) $-
Cost of sales  (16,770)  -  19,718  (2,948)  -
Selling, general and administrative  (851)  -  851  -   -
Restructuring costs  -   -  -  -   -
Depreciation and amortization  (505)  -  505  -   -
Asset impairment charges  -   -  -  -   -
Operating income (loss) $(3,654) $- $3,654 $-  $-
           
Current presentation          
Net sales $538,249  $150,203 $248,119 $(8,387) $928,184
Cost of sales  399,155   104,452  213,278  (6,241)  710,644
Selling, general and administrative  62,083   23,187  15,771  13,869   114,910
Restructuring costs  387   -  142  -   529
Depreciation and amortization  29,793   9,339  13,453  561   53,146
Asset impairment charges  12,602   -  -  -   12,602
Operating income (loss) $34,229  $13,225 $5,475 $(16,576) $36,353
           


QUANEX BUILDING PRODUCTS CORPORATION        
SELECTED SEGMENT DATA       
(In thousands)       
(Unaudited)          
           
This table provides operating income (loss), EBITDA, and Adjusted EBITDA by reportable segment.  Non-operating expense and income tax expense are not allocated to the reportable segments. 
 
  NA Engineered
Components		 EU Engineered
Components		 NA Cabinet
Components		 Unallocated
Corp & Other		 Total
Three months ended October 31, 2017          
Net sales $  131,380  $  41,830  $  61,110  $  (1,361) $  232,959 
Cost of sales    97,523     29,572     52,214     (984)    178,325 
Selling, general and administrative    14,076     5,449     3,887     (270)    23,142 
Restructuring charges    1,357     -      110     -      1,467 
Depreciation and amortization    7,932     2,080     3,650     132     13,794 
Operating income (loss)    10,492     4,729     1,249     (239)    16,231 
Depreciation and amortization    7,932     2,080     3,650     132     13,794 
EBITDA    18,424     6,809     4,899     (107)    30,025 
Transaction related costs    -      -      -      169     169 
Loss on sale of plant    1,627     -      -      -      1,627 
Restructuring charges    1,357     -      110     -      1,467 
Adjusted EBITDA  $  21,408  $  6,809  $  5,009  $  62  $  33,288 
Adjusted EBITDA Margin %  16.3%  16.3%  8.2%    14.3%
           
Three months ended October 31, 2016          
Net sales $  147,993  $  39,953  $  63,083  $  (1,858) $  249,171 
Cost of sales    107,162     27,754     54,764     (1,512)    188,168 
Selling, general and administrative    16,311     5,817     2,748     1,604     26,480 
Restructuring charges    387     -      142     -      529 
Depreciation and amortization    8,743     2,148     2,370     126     13,387 
Asset impairment charges    12,602     -      -      -      12,602 
Operating income (loss)    2,788     4,234     3,059     (2,076)    8,005 
Depreciation and amortization    8,743     2,148     2,370     126     13,387 
EBITDA    11,531     6,382     5,429     (1,950)    21,392 
Transaction related costs    -      -      -      1     1 
Restructuring charges    387     -      142     -      529 
Asset impairment charges    12,602     -      -      -      12,602 
PPA-Inventory Step-up    -      32     -      -      32 
Adjusted EBITDA  $  24,520  $  6,414  $  5,571  $  (1,949) $  34,556 
Adjusted EBITDA Margin %  16.6%  16.1%  8.8%    13.9%
           
Twelve months ended October 31, 2017          
Net sales $  474,878  $  147,963  $  248,808  $  (5,094) $  866,555 
Cost of sales    357,806     104,876     213,257     (3,777)    672,162 
Selling, general and administrative    52,889     20,581     16,626     7,885     97,981 
Restructuring charges    3,564     -      986     -      4,550 
Depreciation and amortization    34,308     8,833     13,811     543     57,495 
Operating income (loss)    26,311     13,673     4,128     (9,745)    34,367 
Depreciation and amortization    34,308     8,833     13,811     543     57,495 
EBITDA    60,619     22,506     17,939     (9,202)    91,862 
Transaction related costs    -      -      -      497     497 
Mexico restructuring, loss on disposal of fixed assets    -      -      190     -      190 
One-time employee benefit adjustment    -      -      188     -      188 
PPA-Inventory Step-up    -      104     -      -      104 
Loss on sale of plant    1,627     -      -      -      1,627 
Restructuring charges    3,564     -      986     -      4,550 
Asset impairment charges    -      -      -      -      -  
Adjusted EBITDA  $  65,810  $  22,610  $  19,303  $  (8,705) $  99,018 
Adjusted EBITDA Margin %  13.9%  15.3%  7.8%    11.4%
           
Twelve months ended October 31, 2016          
Net sales $  538,249  $  150,203  $  248,119  $  (8,387) $  928,184 
Cost of sales    399,155     104,452     213,278     (6,241)    710,644 
Selling, general and administrative    62,083     23,187     15,771     13,869     114,910 
Restructuring charges    387     -      142     -      529 
Depreciation and amortization    29,793     9,339     13,453     561     53,146 
Asset impairment charges    12,602     -      -      -      12,602 
Operating income (loss)    34,229     13,225     5,475     (16,576)    36,353 
Depreciation and amortization    29,793     9,339     13,453     561     53,146 
EBITDA    64,022     22,564     18,928     (16,015)    89,499 
Transaction related costs    -      -      -      4,988     4,988 
Restructuring charges    387     -      142     -      529 
Asset impairment charges    12,602     -      -      -      12,602 
PPA-Inventory Step-up    -      384     2,287     -      2,671 
Adjusted EBITDA  $  77,011  $  22,948  $  21,357  $  (11,027) $  110,289 
Adjusted EBITDA Margin %  14.3%  15.3%  8.6%    11.9%


QUANEX BUILDING PRODUCTS CORPORATION        
SALES ANALYSIS        
(In thousands)        
(Unaudited)        
          
   Three Months Ended  Twelve Months Ended 
  October 31, 2017 October 31, 2016 (1) October 31, 2017 October 31, 2016 (1) 
          
NA Engineered Components:        
 United States - fenestration (2)$  110,659  $  124,670  $  399,694  $  444,571  
 International - fenestration   9,334     9,530     34,279     38,439  
 United States - non-fenestration   5,673     8,677     25,263     36,986  
 International - non-fenestration   5,714     5,116     15,642     18,253  
  $  131,380  $  147,993  $  474,878  $  538,249  
EU Engineered Components (3):        
 United States - fenestration$  -  $  159  $  303  $  412  
 International - fenestration   37,015     35,283     129,140     134,631  
 International - non-fenestration   4,815     4,511     18,520     15,160  
  $  41,830  $  39,953  $  147,963  $  150,203  
NA Cabinet Components:        
 United States - fenestration$  5,597  $  3,008  $  17,083  $  21,779  
 United States - non-fenestration (4)   54,977     59,431     229,550     223,664  
 International - non-fenestration   536     644     2,175     2,676  
  $  61,110  $  63,083  $  248,808  $  248,119  
Unallocated Corporate & Other:        
 Eliminations$  (1,361) $  (1,858) $  (5,094) $  (8,387) 
  $  (1,361) $  (1,858) $  (5,094) $  (8,387) 
          
Net Sales$  232,959  $  249,171  $  866,555  $  928,184  
          
(1) Updated to reflect transfer of operating facilities from NA Engineered Components to NA Cabinet Components.  See Reconciliation for additional details.  
(2) Reflects the loss of revenue associated with eliminated products of $14.5 million and $67.9 million for the three-months and twelve-months ended October 31, 2017, respectively. 
(3) Reflects a gain of $1.0 million, and a loss $10.7 million in revenue associated with foreign currency impacts for the three-months and twelve-months ended October 31, 2017, respectively. 
(4) Reflects the loss of revenue associated with eliminated products of $2.0 million and $10.3 million for the three-months and twelve-months ended October 31, 2017, respectively. 


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