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Jan 31, 2023
Quanex Q1 2023 Earnings Report
Reported a decrease in net sales due to softer demand, customer inventory rebalancing initiatives and foreign exchange translation impact.
Key Takeaways
Quanex Building Products reported first quarter 2023 results with net sales of $261.9 million, a decrease of 1.9% compared to the same period of 2022. The company's results were impacted by softer demand, customer inventory rebalancing initiatives, higher stock-based compensation expense, one-time transaction and advisory fees, increased interest expense, and foreign exchange translation.
Balance sheet and liquidity remain strong.
Revenue growth in NA and EU Fenestration segments, excluding FX impact.
Integration of LMI Custom Mixing assets on track.
Cautiously optimistic on second half of 2023.
Forward Guidance
Quanex estimates net sales of $1.12 billion to $1.16 billion, which is expected to yield approximately $130 million to $142 million in Adjusted EBITDA in fiscal 2023.
Positive Outlook
- Long-term view on residential housing market remains positive.
- Belief that they have returned to a more normalized seasonality pattern.
- Cautiously optimistic that demand will improve in the second half of our fiscal year.
- Proactively working to adjust their cost structure to protect margins.
- Capital allocation priorities are generating cash, paying down debt, evaluating growth opportunities and opportunistically buying back our stock.
Challenges Ahead
- Near-term outlook for their business remains somewhat cautious.
- Market volume declines
- Customer inventory rebalancing initiatives
- Foreign exchange translation
Historical Earnings Impact
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Avg. Return Before/After Earnings
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