Quanex Building Products: net loss, increase in net sales for fourth quarter

In its fourth-quarter financial results, Quanex Building Products reported a USD 1.2 million net loss, along with an increase in net sales compared with the fourth quarter of 2012.

Quanex Building Products’ fourth-quarter financial results include a USD 1.2 million net loss, compared with a net income of USD 1.0 million for the same period in 2012. However, the company saw a 17% increase in its net sales from USD 235 million to USD 275 million, when compared with the fourth quarter of 2012.
“Results were favourably impacted by an improvement in the housing market, coupled with savings generated from last year’s insulating glass facility consolidation and the addition of Aluminite earlier in 2013,” says CEO Bill Griffiths. “Corporate results were negatively impacted as we recognized USD 15 million of accelerated depreciation from the cessation of our ERP implementation.”
The Engineered Products Group (EPG), which includes Edgetech IG, reported fourth-quarter 2013 net sales of USD 167 million, an increase of 22% (10% excluding Aluminite’s sales), compared to USD 136 million in the fourth quarter of 2012. Fourth-quarter 2013 operating income was USD 18 million compared to USD 14 million in the fourth quarter of 2012. The EPG’s fourth-quarter 2013 EBITDA was USD 26 million compared to USD 21 million in the fourth quarter of 2012. Company officials say the EPG’s results “continue to be impacted by higher industry sales of lower-performance windows typically installed in new construction and continued weak residential remodelling and replacement (R&R) sales.”
“The key indicators that impact our markets are encouraging,” Griffiths adds. “New housing starts have improved, home prices are increasing and consumers are beginning to invest in R&R. Much of the recovery in new construction is weighted more toward entry-level windows; and, consumers are investing R&R dollars in items such as paint, cabinets and appliances, but not yet into windows. Prime window demand for the R&R market, which has been flat for the past several years, will remain challenging and we believe a measurable recovery is likely 12 to 18 months away, as low energy costs and tough financing conditions discourage homeowners from replacing windows.”