Quanex Building Products saw sales fall in the fourth quarter of fiscal 2017 as the company divested its non-core wood flooring business, Owens Flooring, on 31 October.
The company notched sales of USD 233 million in the quarter that ended on 31 October, down from USD 249 million in the same period last year. Earnings per share was 37 cents, compared to 45% in 2016.
“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,” said Bill Griffiths, Quanex chair, president and CEO. “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.”
Griffiths said the underlying growth rate for Quanex’s fenestration business in the US was 6.1% in fiscal 2017, which is more than double market-research firm Ducker’s latest window shipment estimate of 2.9% growth for the 12 months ended 30 September 2017.
“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,” Griffiths said. “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 USD 890 million to USD 900 million and adjusted EBITDA of USD 103 million to USD 108 million.”