Quanex Building Products has announced a significant increase in return capital to shareholders
In its 3Q results for 2018, Quanex Building Products and announced a significant increase in return capital to shareholders, with net sales for the quarter up from the previous year.
Quanex Building Products has released its third quarter results for 2018, and announced a significant increase in return capital to shareholders. This comes by means of a 100% increase in the quarterly cash dividend and a USD 60 million share repurchases authorization.
Net sales for the third quarter were USD 239.9 million, making the net sales for 2018 USD 645.7 million. Both numbers are up from the previous year with the net sales for the third quarter of 2017 being USD 229.4 million.
The net income for the third quarter was USD 10.8 million, making the net income for 2018 USD 19.8 million. Again, these numbers are up from this time last year with the third quarter net income being USD 10.2 million and the net income at the end of nine months USD 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, attributing 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.
“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 31 July 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 USD 60 million share repurchase programme, 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 USD 0.08 per share on the Company’s common stock, representing a 100% increase compared to the prior dividend, payable 28 September 2018, to shareholders of record on 14 September 2018.