NX Quanex Corp

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

February 26, 2015

(Date of earliest event reported)

 

 

QUANEX BUILDING PRODUCTS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		1-33913		26-1561397
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1800 West Loop South, Suite 1500, Houston, Texas		77027
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 713-961-4600

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On March 3, 2015, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 5.07.

Submission of Matters to a Vote of Security Holders

On February 26, 2015, the Company held its Annual Meeting of Stockholders, pursuant to notice and proxy mailed on January 23, 2015, to the Company’s stockholders of record as of January 7, 2015. There were 34,799,047 shares of common stock entitled to vote at the meeting, and a total of 33,602,701 shares were represented at the meeting in person or by proxy.

At the Annual Meeting, two directors were elected for terms expiring at the Company’s 2018 Annual Meeting, with the following tabulation of votes for each nominee:

 

Director Nominee		Votes For				Votes Withheld				Broker Non-Votes				Percent of Shares Cast in Favor *
Joseph D. Rupp			32,451,293				234,531				916,877				99.28	%
Robert R. Buck			32,199,227				486,597				916,877				98.51	%

 

*	Excludes Broker Non-Votes

In addition to the election of directors, stockholders at the Annual Meeting took the following actions:

 

•

Provided an advisory “say on pay” vote approving the Company’s executive compensation programs; and

 

•

Ratified the Audit Committee’s appointment of Grant Thornton LLP as the Company’s independent auditor for the fiscal year ending October 31, 2015.

The tabulation of votes for each of these proposals is set forth below:

 

Proposal		Votes For				Votes Against				Abstain				Broker Non-Votes				Percent of Shares Cast in Favor *
Advisory Vote to Approve Executive Compensation			31,835,835				774,828				75,161				916,877				97.40	%
Ratification of Company’s Independent Auditor			33,346,864				238,682				17,155				—				99.24	%

 

*	Excludes Broker Non-Votes

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Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

 

†	Management Compensation or Incentive Plan

*	Filed herewith.

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SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				QUANEX BUILDING PRODUCTS CORPORATION (Registrant)
March 3, 2015 (Date)				/S/    KEVIN P. DELANEY         Kevin P. Delaney Senior Vice President – General Counsel and Secretary

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Exhibit Index

 

Exhibit 99.1

 

Quanex Building Products Corporation Reports First Quarter

2015 Results and Affirms Full Year 2015 Guidance

Houston, Texas, March 3, 2015 – Quanex Building Products Corporation (NYSE:NX), a leading supplier of window and door components, today released results for the first quarter ended January 31, 2015.

“While we expected roughly flat sales growth in the first quarter because of a planned contraction in our vinyl business, all of our other product lines continued to grow faster than the industry,” said Chairman, President and Chief Executive Officer Bill Griffiths. “This, together with the current trajectory of our operating performance, gives us sufficient confidence to reaffirm our full year EBITDA guidance,” said Griffiths.

Financial highlights for the first quarter include:

 

•

Q1 2015 net sales increased 1.2% to $128 million vs. $126 million in Q1 2014

 

•

Q1 2015 loss from continuing operations of ($3.1) million vs. loss of ($1.2) million in Q1 2014

 

•

Q1 2015 diluted loss per share from continuing operations of ($0.09) vs. ($0.03) in Q1 2014

 

•

Q1 2015 EBITDA of $2.6 million vs. $7.7 million in Q1 2014

 

•

Cash balance of $63.9 million and no borrowings on $150 million revolving credit facility

At the company’s annual shareholder meeting held at the Company’s corporate offices in Houston, Texas on February 26, 2015, board members Joseph D. Rupp and Robert R. Buck were elected by Quanex shareholders to serve a new three-year term expiring in 2018. Quanex shareholders also ratified an advisory resolution approving the compensation of the Company’s named executive officers and the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2015.

Additionally, the Board of Directors declared a quarterly cash dividend of $0.04 per share on the company’s common stock, payable March 31, 2015, to shareholders of record on March 16, 2015.

On September 5, 2014, the Board of Directors authorized a $75 million share repurchase program. The program was completed in February 2015, resulting in the repurchase of 3,992,229 shares at an average cost of $18.79 (inclusive of commissions).

Additional information related to first quarter 2015 results, including a reconciliation of EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) to its most comparable GAAP measure, can be found in the supplemental schedules accompanying this press release.

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Conference Call Information

Quanex will host its conference call today, March 3, 2015 at 11:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.quanex.com in the Investors section.

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, future operating results of Quanex, the future financial condition of Quanex, future uses of cash and other expenditures, expenses and tax rates, expectations relating to the Company’s industry, and the Company’s future growth, including revenue and EBITDA guidance. The statements and guidance set forth in this release are based on current expectations. Actual results or events may differ materially from this release. Factors that could impact future results may include, without limitation, the effect of both domestic and global economic conditions, the impact of competitive products and pricing, the availability and cost of raw materials, and customer demand. For a more complete discussion of factors that may affect the Company’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2014, under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors,” in our other documents filed with the Securities and Exchange Commission from time to time. Any forward-looking statements in this press release are made as of the date hereof, and Quanex Building Products Corporation undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

Financial Contact: Marty Ketelaar, 713-877-5402; Media Contact: Valerie Calvert, 713-877-5305

For additional information, please visit www.quanex.com

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QUANEX BUILDING PRODUCTS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

		Three Months Ended January 31,
		2015				2014
Net sales		$	127,893			$	126,379
Cost of sales			105,804				96,189
Selling, general and administrative			19,496				22,503
Depreciation and amortization			8,208				8,544
Asset impairment charges			—				5
Operating loss			(5,615	)			(862	)
Interest expense			(141	)			(141	)
Other, net			(151	)			96
Loss before income taxes			(5,907	)			(907	)
Income tax benefit (expense)			2,813				(304	)
Loss from continuing operations			(3,094	)			(1,211	)
Income (loss) from discontinued operations, net of taxes			23				(2,689	)
Net loss		$	(3,071	)		$	(3,900	)
Earnings (loss) per common share:
From continuing operations		$	(0.09	)		$	(0.03	)
From discontinued operations		$	—			$	(0.08	)
Diluted earnings (loss) per common share:
From continuing operations		$	(0.09	)		$	(0.03	)
From discontinued operations		$	—			$	(0.08	)
Weighted average common shares outstanding:
Basic			35,079				37,003
Diluted			35,079				37,003
Cash dividends per share		$	0.04			$	0.04

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QUANEX BUILDING PRODUCTS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

		January 31, 2015				October 31, 2014
ASSETS
Current assets:
Cash and cash equivalents		$	63,924			$	120,384
Accounts receivable, net			39,334				55,193
Inventories, net			59,831				57,358
Deferred income taxes			24,662				21,442
Prepaid and other current assets			5,715				6,052
Total current assets			193,466				260,429
Property, plant and equipment, net			110,033				109,487
Deferred income taxes			7,295				1,545
Goodwill			68,802				70,546
Intangible assets, net			67,889				70,150
Other assets			5,524				4,956
Total assets		$	453,009			$	517,113
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	31,016			$	41,488
Accrued liabilities			22,920				32,482
Income taxes payable			—				107
Current maturities of long-term debt			190				199
Total current liabilities			54,126				74,276
Long-term debt			568				586
Deferred pension and postretirement benefits			5,309				4,818
Liability for uncertain tax positions			548				4,626
Other liabilities			11,152				11,887
Total liabilities			71,703				96,193
Stockholders’ equity:
Common stock			376				376
Additional paid-in-capital			249,497				249,600
Retained earnings			207,760				202,319
Accumulated other comprehensive loss			(8,528	)			(5,708	)
Treasury stock at cost			(67,799	)			(25,667	)
Total stockholders’ equity			381,306				420,920
Total liabilities and stockholders’ equity		$	453,009			$	517,113

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QUANEX BUILDING PRODUCTS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands)

(Unaudited)

 

		Three Months Ended January 31,
		2015				2014
Operating activities:
Net loss		$	(3,071	)		$	(3,900	)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization			8,208				10,294
Stock-based compensation			1,264				1,090
Deferred income tax benefit			(3,239	)			(1,885	)
Excess tax benefit from share-based compensation			(60	)			(1	)
Asset impairment charges			—				510
Other, net			(478	)			728
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Decrease in accounts receivable			15,323				26,654
Increase in inventory			(2,920	)			(15,998	)
Increase in other current assets			(12	)			(594	)
Decrease in accounts payable			(10,298	)			(10,894	)
Decrease in accrued liabilities			(10,934	)			(15,027	)
Decrease (increase) in income taxes payable			(58	)			26
Increase in deferred pension and postretirement benefits			520				915
Increase (decrease) in other long-term liabilities			13				(1,087	)
Other, net			(5	)			(2,315	)
Cash used for operating activities			(5,747	)			(11,484	)
Investing activities:
Acquisitions, net of cash acquired			—				(5,161	)
Capital expenditures			(7,321	)			(6,748	)
Proceeds from property insurance claim			513				400
Proceeds from disposition of capital assets			—				303
Cash used in investing activities			(6,808	)			(11,206	)
Financing activities:
Repayments of other long-term debt			(23	)			(26	)
Common stock dividends paid			(1,448	)			(1,490	)
Issuance of common stock			—				331
Excess tax benefit from share-based compensation			60				1
Purchase of treasury stock			(42,748	)			—
Cash used in financing activities			(44,159	)			(1,184	)
Effect of exchange rate changes on cash and cash equivalents			254				(55	)
Decrease in cash and cash equivalents			(56,460	)			(23,929	)
Cash and cash equivalents at beginning of period			120,384				49,736
Cash and cash equivalents at end of period		$	63,924			$	25,807

NOTE: The cash flow statement presentation includes the sources and uses of cash for the discontinued operations as operating, investing and financing cash flows, as applicable, combined with such cash flows for continuing operations, as permitted by U.S. GAAP.

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QUANEX BUILDING PRODUCTS CORPORATION

NON-GAAP FINANCIAL MEASURE DISCLOSURE

(In thousands)

(Unaudited)

EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) is a non-GAAP financial measure that Quanex management uses to measure its operational performance and assist with financial decision-making. EBITDA is a key metric used by management in determining the value of annual incentive awards for its employees. We believe this non-GAAP measure (included under market conditions outlined in our forward-looking guidance) provides a consistent basis for comparison between periodes, and will assist investors in understanding our financial performance when comparing our results to other investment opportunities. EBITDA may not be the same as that used by other companies. The company does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

 

		Three Months Ended January 31,
		2015				2014
		Quanex				Quanex
Net loss		$	(3,071	)		$	(3,900	)
(Income) loss from discontinued operations, net of taxes			(23	)			2,689
Income tax (benefit) expense			(2,813	)			304
Other, net			151				(96	)
Interest expense			141				141
Operating loss			(5,615	)			(862	)
Depreciation and amortization			8,208				8,544
EBITDA		$	2,593			$	7,682
Financial Statistics as of January 31, 2015
Book value per common share:						$	11.22
Total debt to capitalization:							0.2	%
Return on invested capital:							7.3	%
Actual number of common shares outstanding:							33,976,102

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QUANEX BUILDING PRODUCTS CORPORATION

PRE-TAX & AFTER TAX PRESENTATION

(In millions, except per share data)

(Unaudited)

 

Pre-Tax Presentation		Q1 2015 $MM				Q1 2014 $MM
Operating Loss from Continuing Operations As Reported		$	(5.9	)		$	(0.9	)
Benefit (Reduction) to Operating Income (Loss):
IG Warranty Reserve Benefit			—				(2.8	)
Transaction Related Expenses			—				0.4
Discontinued ERP Expenses*			—				0.3
Operating Loss from Continuing Operations As Adjusted		$	(5.9	)		$	(3.0	)

 

After-Tax Presentation		Q1 2015 $MM				Q1 2015 EPS				Q1 2014 $MM				Q1 2014 EPS
Loss from Continuing Operations As Reported		$	(3.1	)		$	(0.09	)		$	(1.2	)		$	(0.03	)
Benefit (Reduction) to EPS:
IG Warranty Reserve Benefit			—				—				(2.1	)			(0.06	)
Transaction Related Expenses			—				—				0.2				0.01
Discontinued ERP Expenses			—				—				0.2				0.01
Diluted Loss from Continuing Operations As Adjusted *		$	(3.1	)		$	(0.09	)		$	(2.9	)		$	(0.07	)

 

*	Q1 2014 includes $258K of accelerated depreciation related to the SAP Implementation