Quanex Building Products Announces Third Quarter 2023 Results and Updates Full Year 2023 Guidance

Record Quarter for Earnings
Margin Expansion Across All Operating Segments
Repaid $25 Million in Bank Debt
Balance Sheet and Liquidity Remain Strong
Solid Improvement in Cash Provided by Operating Activities

HOUSTON, Aug. 31, 2023 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (NYSE:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2023.  

The Company reported the following selected financial results:

	Three Months Ended July 31,				Nine Months Ended July 31,
($ in millions, except per share data)	2023		2022		2023		2022
Net Sales	$299.6		$324.0		$835.1		$914.0
Gross Margin	$78.6		$72.6		$197.5		$201.0
Gross Margin %	26.2%		22.4%		23.7%		22.0%
Net Income	$31.7		$25.9		$55.1		$63.7
Diluted EPS	$0.96		$0.78		$1.67		$1.91
Adjusted Net Income	$31.9		$26.2		$59.7		$64.0
Adjusted Diluted EPS	$0.97		$0.79		$1.81		$1.92
Adjusted EBITDA	$48.5		$44.2		$108.8		$113.8
Adjusted EBITDA Margin %	16.2%		13.6%		13.0%		12.5%
Cash Provided by Operating Activities	$64.1		$51.7		$102.6		$49.9
Free Cash Flow	$56.7		$46.0		$80.1		$30.4

(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and reconciliation tables for additional information)

George Wilson, President and Chief Executive Officer, stated, “The results we reported for the three months ended July 31, 2023 were a record for Quanex from both an earnings and margin perspective. Demand continued to improve across all product lines during the third quarter of this year compared to the first half of the year. In addition, we believe the customer inventory rebalancing that impacted results in our fenestration segments in the first half have subsided and did not affect third quarter results.

“When compared to the third quarter of 2022, revenue declined in the third quarter of 2023 across all operating segments as ongoing macroeconomic challenges led to market volume declines and some pricing pressure, mostly due to surcharge rollbacks and index pricing decreases in North America as raw material costs declined. Despite this pressure on the topline, we converted well and realized margin expansion across all operating segments. Our continued focus on operational efficiency proved beneficial and our ability to flex our cost structure to meet demand trends across product lines also helped improve our profitability during the quarter.

“We continue to do a good job of managing working capital and generating cash, which enabled us to pay down our bank debt by $25 million during the third quarter. In fact, we are currently on track to generate record free cash flow this year. In addition, our balance sheet remains strong, and our leverage ratio improved compared to the second quarter of this year.” (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)

Third Quarter 2023 Results Summary   

The Company reported net sales of $299.6 million during the three months ended July 31, 2023, which represents a decrease of 7.5% compared to $324.0 million for the same period of 2022. The decrease was mostly attributable to softer market demand and lower pricing in North America.   Quanex realized a decline in net sales of 4.1% for the third quarter of 2023 in its North American Fenestration segment. Excluding the contribution from the LMI Custom Mixing assets we acquired on November 1, 2022, net sales in the North American Fenestration segment would have declined by 14.9% year-over-year. The Company reported a decline in net sales of 23.6% in its North American Cabinet Components segment and a decrease of 2.8% in net sales in its European Fenestration segment, excluding foreign exchange impact. (See Sales Analysis table for additional information)

The increase in earnings for the three months ended July 31, 2023 was largely attributable to operational efficiency gains, cost control and a decrease in income tax expense. As such, Quanex was able to realize margin expansion in each of its operating segments and on a consolidated basis.

Balance Sheet Update

As of July 31, 2023, Quanex had total debt of $110.8 million ($57.9 million excluding real-estate leases that are considered “finance” leases under U.S. GAAP) and the Company’s leverage ratio of Net Debt to LTM Adjusted EBITDA decreased to 0.3x (Net Debt free excluding these real-estate leases). As of July 31, 2023, Quanex’s LTM Adjusted EBITDA was $147.5 million and LTM Net Income, the most directly comparable GAAP measure, was $79.8 million.   (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)

Outlook        

Mr. Wilson commented, “We were cautiously optimistic heading into the second half of our fiscal year based on our belief that we were seeing a return to normal seasonality. Our third quarter results reinforced that belief. Based on our results year-to-date, combined with our operational execution, recent demand trends and conversations with our customers, we are updating our guidance for fiscal 2023. On a consolidated basis for fiscal 2023, we currently estimate that we will generate net sales of approximately $1.125 billion, which is towards the lower end of prior guidance as indicated on our last earnings call; however, we are increasing our Adjusted EBITDA* guidance to $150 million to $155 million.

Our capital allocation priorities continue to be generating cash, paying down debt, evaluating growth opportunities and opportunistically buying back our stock.”

*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 also scheduled a conference call for Friday, September 1, 2023 at 11:00 a.m. ET (10:00 a.m. CT) to discuss the release. A link to the live audio webcast will be available on Quanex’s website at http://www.quanex.com in the Investors section under Presentations & Events.

Participants can pre-register for the conference call using the following link: https://register.vevent.com/register/BI9e428e0cc86a46139a82d87ee6276d56

Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, it is recommended that participants dial into the conference call ten minutes ahead of the scheduled start time. A replay will be available for a limited time on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.

About Quanex

Quanex is a global manufacturer with core capabilities and broad applications across various end markets. The Company currently collaborates and partners with leading OEMs to provide innovative solutions in the window, door, vinyl fencing, solar, refrigeration and cabinetry markets.  Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.

For more information contact Scott Zuehlke, Senior Vice President, Chief Financial Officer & Treasurer, at 713-877-5327 or scott.zuehlke@quanex.com.

Non-GAAP Terminology Definitions and Disclaimers

Adjusted Net Income (defined as net income further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges, asset impairment charges, 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, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges and asset impairment charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making.  Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less cash and cash equivalents. The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating Quanex’s leverage. In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company’s credit agreement. Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures. Quanex uses the Free Cash Flow metric to measure operational and cash management performance and assist with financial decision-making.   Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of the Company’s residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company’s financial and cash management performance. 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 following: impacts from public health issues (including pandemics, such as the recent COVID-19 pandemic) on the economy and the demand for Quanex’s products, 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, 2022, and the Company’s Quarterly Reports on Form 10-Q 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
		Three Months Ended July 31,								Nine Months Ended July 31,
		2023				2022				2023				2022
Net sales		$	299,640			$	324,037			$	835,091			$	913,970
Cost of sales			221,065				251,446				637,586				712,931
Selling, general and administrative			30,516				28,822				94,631				87,774
Depreciation and amortization			10,596				9,734				31,672				30,554
Operating income			37,463				34,035				71,202				82,711
Interest expense			(2,068	)			(724	)			(6,571	)			(1,849	)
Other, net			402				398				591				905
Income before income taxes			35,797				33,709				65,222				81,767
Income tax expense			(4,099	)			(7,801	)			(10,103	)			(18,098	)
Net income		$	31,698			$	25,908			$	55,119			$	63,669
Earnings per common share, basic		$	0.97			$	0.79			$	1.68			$	1.92
Earnings per common share, diluted		$	0.96			$	0.78			$	1.67			$	1.91
Weighted average common shares outstanding:
Basic			32,716				32,999				32,841				33,093
Diluted			32,919				33,173				33,031				33,256
Cash dividends per share		$	0.08			$	0.08			$	0.24			$	0.24

QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
		July 31, 2023				October 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	73,252			$	55,093
Accounts receivable, net			96,204				96,018
Inventories, net			105,368				120,890
Prepaid and other current assets			12,764				8,664
Total current assets			287,588				280,665
Property, plant and equipment, net			245,912				180,400
Operating lease right-of-use assets			45,804				56,000
Goodwill			186,409				137,855
Intangible assets, net			78,617				65,035
Other assets			3,479				4,662
Total assets		$	847,809			$	724,617
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	71,464			$	77,907
Accrued liabilities			54,237				52,114
Income taxes payable			-				1,049
Current maturities of long-term debt			2,278				1,046
Current operating lease liabilities			7,388				7,727
Total current liabilities			135,367				139,843
Long-term debt			107,234				29,628
Noncurrent operating lease liabilities			39,291				49,286
Deferred pension benefits			-				3,917
Deferred income taxes			23,741				22,277
Other liabilities			16,221				14,831
Total liabilities			321,854				259,782
Stockholders’ equity:
Common stock			372				372
Additional paid-in-capital			250,882				251,947
Retained earnings			384,623				337,456
Accumulated other comprehensive loss			(31,890	)			(49,422	)
Treasury stock at cost			(78,032	)			(75,518	)
Total stockholders’ equity			525,955				464,835
Total liabilities and stockholders' equity		$	847,809			$	724,617

QUANEX BUILDING PRODUCTS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (In thousands) (Unaudited)
	Nine Months Ended July 31,
	2023				2022
Operating activities:
Net income	$	55,119			$	63,669
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		31,672				30,554
Loss on the disposition of capital assets
Stock-based compensation		1,828				1,707
Deferred income tax		177				505
Other, net		2,423				2,647
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		9,918				(5,306	)
Decrease (increase) in inventory		23,864				(48,280	)
Increase in other current assets		(439	)			(824	)
(Decrease) increase in accounts payable		(15,471	)			2,765
Decrease in accrued liabilities		(5,152	)			(4,721	)
(Decrease) increase in income taxes payable		(3,534	)			7,522
Increase (decrease) in deferred pension benefits		22				(239	)
Increase in other long-term liabilities		609				32
Other, net		1,523				(177	)
Cash provided by operating activities		102,559				49,854
Investing activities:
Business acquisition		(91,302	)			-
Capital expenditures		(22,450	)			(19,488	)
Proceeds from disposition of capital assets		183				134
Cash used for investing activities		(113,569	)			(19,354	)
Financing activities:
Borrowings under credit facilities		102,000				70,500
Repayments of credit facility borrowings		(60,000	)			(70,500	)
Debt issuance costs		-				(1,210	)
Repayments of other long-term debt		(1,954	)			(1,301	)
Common stock dividends paid		(7,952	)			(7,916	)
Issuance of common stock		753				502
Payroll tax paid to settle shares forfeited upon vesting of stock		(567	)			(1,412	)
Purchase of treasury stock		(5,593	)			(6,600	)
Cash provided by (used for) financing activities		26,687				(17,937	)
Effect of exchange rate changes on cash and cash equivalents		2,482				(2,594	)
Decrease in cash and cash equivalents		18,159				9,969
Cash and cash equivalents at beginning of period		55,093				40,061
Cash and cash equivalents at end of period	$	73,252			$	50,030

QUANEX BUILDING PRODUCTS CORPORATION FREE CASH FLOW AND NET DEBT RECONCILIATION (In thousands) (Unaudited)
The following table reconciles the Company's calculation of Free Cash Flow, a non-GAAP measure, to its most directly comparable GAAP measure. The Company defines Free Cash Flow as cash provided by operating activities less capital expenditures.
	Three Months Ended July 31,				Nine Months Ended July 31,
	2023		2022		2023		2022
Cash provided by operating activities	$64,099		$51,735		$102,559		$49,854
Capital expenditures	(7,376)		(5,703)		(22,450)		(19,488)
Free Cash Flow	$56,723		$46,032		$80,109		$30,366
The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash.
	As of July 31,
	2023		2022
Revolving credit facility	$55,000		$38,000
Finance lease obligations(1)	55,792		20,105
Total debt(2)	110,792		58,105
Less: Cash and cash equivalents	73,252		50,030
Net Debt	$37,540		$8,075
(1) Includes $52.9 million and $18.8 million in real estate lease liabilities considered finance leases under U.S. GAAP as of July 31, 2023 and July 31, 2022, respectively.
(2) Excludes outstanding letters of credit.

QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE LAST TWELVE MONTHS ADJUSTED EBITDA RECONCILIATION (In thousands, except per share data) (Unaudited)
Reconciliation of Last Twelve Months Adjusted EBITDA		Three Months Ended July 31, 2023				Three Months Ended April 30, 2023			Three Months Ended January 31, 2023				Three Months Ended October 31, 2022				Total
		Reconciliation				Reconciliation			Reconciliation				Reconciliation				Reconciliation
Net income as reported		$	31,698			$	21,512		$	1,909			$	24,667			$	79,786
Income tax expense			4,099				5,551			453				3,329				13,432
Other, net			(402	)			29			(218	)			(136	)			(727	)
Interest expense			2,068				2,244			2,259				710				7,281
Depreciation and amortization			10,596				10,456			10,620				9,555				41,227
EBITDA			48,059				39,792			15,023				38,125				140,999
Cost of sales(1)			-				48			-				-				48
Selling, general and administrative(1),(2)			395				63			5,448				564				6,470
Adjusted EBITDA		$	48,454			$	39,903		$	20,471			$	38,689			$	147,517
(1) Loss on damage to manufacturing facilities caused by weather.
(2) Transaction and advisory fees.

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 July 31, 2023								Three Months Ended July 31, 2022								Nine Months Ended July 31, 2023								Nine Months Ended July 31, 2022
		Net Income				Diluted EPS				Net Income				Diluted EPS				Net Income				Diluted EPS				Net Income				Diluted EPS
Net income as reported		$	31,698			$	0.96			$	25,908			$	0.78			$	55,119			$	1.67			$	63,669			$	1.91
Net income reconciling items from below		201				$	0.01			257				$	0.01			4,550				$	0.14			291				$	0.01
Adjusted net income and adjusted EPS		$	31,899			$	0.97			$	26,165			$	0.79			$	59,669			$	1.81			$	63,960			$	1.92
Reconciliation of Adjusted EBITDA		Three Months Ended July 31, 2023								Three Months Ended July 31, 2022								Nine Months Ended July 31, 2023								Nine Months Ended July 31, 2022
		Reconciliation								Reconciliation								Reconciliation								Reconciliation
Net income as reported		$	31,698							$	25,908							$	55,119							$	63,669
Income tax expense		4,099								7,801								10,103								18,098
Other, net		(402		)						(398		)						(591		)						(905		)
Interest expense		2,068								724								6,571								1,849
Depreciation and amortization		10,596								9,734								31,672								30,554
EBITDA		48,059								43,769								102,874								113,265
EBITDA reconciling items from below		395								419								5,954								550
Adjusted EBITDA		$	48,454							$	44,188							$	108,828							$	113,815
Reconciling Items		Three Months Ended July 31, 2023								Three Months Ended July 31, 2022								Nine Months Ended July 31, 2023								Nine Months Ended July 31, 2022
		Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items				Income Statement				Reconciling Items
Net sales		$	299,640			$	-			$	324,037			$	-			$	835,091			$	-			$	913,970			$	-
Cost of sales		221,065				-				251,446				-				637,586				(48		)	(1)	712,931				-
Selling, general and administrative		30,516				(395		)	(2)	28,822				(419		)	(2)	94,631				(5,906		)	(1),(2)	87,774				(550		)	(2)
EBITDA		48,059				395				43,769				419				102,874				5,954				113,265				550
Depreciation and amortization		10,596				-				9,734				-				31,672				-				30,554				-
Operating income		37,463				395				34,035				419				71,202				5,954				82,711				550
Interest expense		(2,068		)		-				(724		)		-				(6,571		)		-				(1,849		)		-
Other, net		402				(126		)	(3)	398				(82		)	(3)	591				(36		)	(3)	905				(164		)	(3)
Income before income taxes		35,797				269				33,709				337				65,222				5,918				81,767				386
Income tax expense		(4,099		)		(68		)	(4)	(7,801		)		(80		)	(4)	(10,103		)		(1,368		)	(4)	(18,098		)		(95		)	(4)
Net income		$	31,698			$	201			$	25,908			$	257			$	55,119			$	4,550			$	63,669			$	291
Diluted earnings per share		$	0.96							$	0.78							$	1.67							$	1.91
(1) Loss on damage to manufacturing facilities caused by weather.
(2) Transaction and advisory fees.
(3) Foreign currency transaction gains.
(4)Tax impact of net income reconciling items.

QUANEX BUILDING PRODUCTS CORPORATION SELECTED SEGMENT DATA (In thousands) (Unaudited)
This table provides gross margin, operating (loss) income, EBITDA, and Adjusted EBITDA by reportable segment. Non-operating expense and income tax expense are not allocated to the reportable segments.
		NA Fenestration				EU Fenestration				NA Cabinet Components				Unallocated Corp & Other				Total
Three months ended July 31, 2023
Net sales		$	177,081			$	67,889			$	55,385			$	(715	)		$	299,640
Cost of sales			135,126				41,266				44,935				(262	)			221,065
Gross Margin			41,955				26,623				10,450				(453	)			78,575
Gross Margin %			23.7	%			39.2	%			18.9	%							26.2	%
Selling, general and administrative			14,254				8,039				5,095				3,128				30,516
Depreciation and amortization			5,033				2,434				3,084				45				10,596
Operating income (loss)			22,668				16,150				2,271				(3,626	)			37,463
Depreciation and amortization			5,033				2,434				3,084				45				10,596
EBITDA			27,701				18,584				5,355				(3,581	)			48,059
Transaction and advisory fees			-				-				-				395				395
Adjusted EBITDA		$	27,701			$	18,584			$	5,355			$	(3,186	)		$	48,454
Adjusted EBITDA Margin %			15.6	%			27.4	%			9.7	%							16.2	%
Three months ended July 31, 2022
Net sales		$	184,744			$	67,613			$	72,480			$	(800	)		$	324,037
Cost of sales			142,970				47,212				61,543				(279	)			251,446
Gross Margin			41,774				20,401				10,937				(521	)			72,591
Gross Margin %			22.6	%			30.2	%			15.1	%							22.4	%
Selling, general and administrative			14,644				8,256				5,335				587				28,822
Depreciation and amortization			4,044				2,327				3,273				90				9,734
Operating income (loss)			23,086				9,818				2,329				(1,198	)			34,035
Depreciation and amortization			4,044				2,327				3,273				90				9,734
EBITDA			27,130				12,145				5,602				(1,108	)			43,769
Transaction and advisory fees			-				-				-				419				419
Adjusted EBITDA		$	27,130			$	12,145			$	5,602			$	(689	)		$	44,188
Adjusted EBITDA Margin %			14.7	%			18.0	%			7.7	%							13.6	%
Nine months ended July 31, 2023
Net sales		$	487,036			$	186,604			$	163,577			$	(2,126	)		$	835,091
Cost of sales			382,315				119,421				136,722				(872	)			637,586
Gross Margin			104,721				67,183				26,855				(1,254	)			197,505
Gross Margin %			21.5	%			36.0	%			16.4	%							23.7	%
Selling, general and administrative			41,707				23,996				15,939				12,989				94,631
Depreciation and amortization			15,328				7,135				8,988				221				31,672
Operating income (loss)			47,686				36,052				1,928				(14,464	)			71,202
Depreciation and amortization			15,328				7,135				8,988				221				31,672
EBITDA			63,014				43,187				10,916				(14,243	)			102,874
Loss on damage to manufacturing facilities (Cost of sales)			35				-				13				-				48
Loss on damage to manufacturing facilities (SG&A)			-				-				200				-				200
Transaction and advisory fees			-				-				-				5,706				5,706
Adjusted EBITDA		$	63,049			$	43,187			$	11,129			$	(8,537	)		$	108,828
Adjusted EBITDA Margin %			12.9	%			23.1	%			6.8	%							13.0	%
Nine months ended July 31, 2022
Net sales		$	509,283			$	199,954			$	207,711			$	(2,978	)		$	913,970
Cost of sales			396,505				138,147				179,791				(1,512	)			712,931
Gross Margin			112,778				61,807				27,920				(1,466	)			201,039
Gross Margin %			22.1	%			30.9	%			13.4	%							22.0	%
Selling, general and administrative			43,099				24,160				15,823				4,692				87,774
Depreciation and amortization			12,221				7,418				10,653				262				30,554
Operating income (loss)			57,458				30,229				1,444				(6,420	)			82,711
Depreciation and amortization			12,221				7,418				10,653				262				30,554
EBITDA			69,679				37,647				12,097				(6,158	)			113,265
Transaction and advisory fees			-				-				-				550				550
Adjusted EBITDA		$	69,679			$	37,647			$	12,097			$	(5,608	)		$	113,815
Adjusted EBITDA Margin %			13.7	%			18.8	%			5.8	%							12.5	%

QUANEX BUILDING PRODUCTS CORPORATION SALES ANALYSIS (In thousands) (Unaudited)
		Three Months Ended July 31,								Nine Months Ended July 31,
		2023				2022				2023				2022
NA Fenestration:(1)
	United States - fenestration	$	138,090			$	162,215			$	379,613			$	447,425
	International - fenestration		8,542				10,722				22,019				30,952
	United States - non-fenestration		26,423				8,324				73,823				22,117
	International - non-fenestration		4,026				3,483				11,581				8,789
		$	177,081			$	184,744			$	487,036			$	509,283
EU Fenestration:(2)
	International - fenestration	$	51,752			$	49,041			$	142,009			$	148,525
	International - non-fenestration		16,137				18,572				44,595				51,429
		$	67,889			$	67,613			$	186,604			$	199,954
NA Cabinet Components:
	United States - fenestration	$	4,486			$	4,857			$	12,613			$	13,288
	United States - non-fenestration		50,199				66,758				148,774				191,908
	International - non-fenestration		700				865				2,190				2,515
		$	55,385			$	72,480			$	163,577			$	207,711
Unallocated Corporate & Other:
	Eliminations	$	(715	)		$	(800	)		$	(2,126	)		$	(2,978	)
		$	(715	)		$	(800	)		$	(2,126	)		$	(2,978	)
Net Sales		$	299,640			$	324,037			$	835,091			$	913,970
(1) Includes the net sales from the acquisition of LMI of $19.8 million and $54.0 million for the three and nine months ended July 31, 2023, respectively.
(2) Reflects an increase of $2.2 million and a reduction of $8.6 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2023, respectively.