Quanex Q2 2020 Earnings Report
Key Takeaways
Quanex Building Products announced its Q2 2020 results, noting that the first two months of the quarter were solid, but April was challenging due to the COVID-19 pandemic. Despite volume decline in April, the company realized Adjusted EBITDA margin expansion in the North American Fenestration segment and on a consolidated basis. All plants are operational, furloughed employees have started to be recalled, and volume in May was not as soft as anticipated.
Realized Adjusted EBITDA margin expansion in North American Fenestration segment and on a consolidated basis.
Liquidity was $189.3 million as of April 30, 2020, consisting of $80.2 million in cash on hand plus availability under its Senior Secured Revolving Credit Facility.
All plants are operational and the company has started to recall furloughed employees.
The company repurchased 149,937 shares of common stock for approximately $2.1 million at an average price of $13.70 per share during the three months ended April 30, 2020.
Quanex
Quanex
Forward Guidance
Management is optimistic about the recovery ahead, but understands challenges will persist in the near-term.
Positive Outlook
- Variable cost structure enables the company to flex down as volume dictates to protect margins.
- All of our plants are operational
- The company has started to recall furloughed employees
- Balance sheet and liquidity remain very strong
- Volume in May was not as soft as anticipated
Challenges Ahead
- Uncertainty related to the COVID-19 pandemic
- Volume started to decline in all of Quanex’s manufacturing facilities in late March
- Two manufacturing facilities in the UK were shut down completely on March 25, 2020 in compliance with government orders
- Challenges will persist in the near-term
- Withdrew guidance for 2020