Quanex Building Products Corporation · NYSE:NX
Quanex Building Products — Investor Presentation (March 2021)
16 slides from Quanex Building Products's investor presentation, March 2021
Slide 1: Investor Presentation
Investor Presentation March 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement Note on 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
Slide 3: Evolution of Quanex
Evolution of Quanex SIGNIFICANT IMPROVEMENT IN PROFITABILITY Quanex Corporation 2Q14: Divested Nichols Aluminum Pre 2008 3Q15: Acquired HL Plastics $2,500 16.0% Spin/Sale 1Q16: Acquired Woodcraft ~14% Acquired 14.0% Aluminite 1Q13 ~12.3% $2,000 Acquired ~11.5% 12.0% Edgetech 2Q11 ~10% Net Sales ($ i
Slide 4: Quanex At-A-Glance
Quanex At-A-Glance INDUSTRY-LEADING, “PURE PLAY” BUILDING PRODUCTS MANUFACTURER Quanex is the largest supplier of components to IG SPACERS SCREENS & OTHER OEMs in the building products sector. OEMs’ customer ~55% NA FENESTRATION 15% base is predominately focused on serving new construction and R&R m
Slide 5: Geographic Footprint
Geographic Footprint FACILITIES STRATEGICALLY LOCATED TO BETTER SERVE CUSTOMERS • Facilities feature efficient plant design and flexible manufacturing processes, enabling Quanex to produce a wide variety of custom engineered products and components with 28 U.S. 2 U.K. 1 Germany • short lead times Qu
Slide 6: Solid Balance Sheet with Flexible Capital Structure
Solid Balance Sheet with Flexible Capital Structure AMPLE LIQUIDITY NX Capitalization ($ in thousands) 01.31.21 Cash & Cash Equivalents $43,426 Senior Secured Revolving Credit Facility due 2023 (1) 98,000 Finance/Capital Leases and Other 15,618 Total Debt $113,619 Net Debt $70,193 Stockholders' Equi
Slide 7: Outsourcing Trends to Benefit Quanex
Outsourcing Trends to Benefit Quanex DOMESTIC WINDOW OEMs ANTICIPATED TO FAVOR COMPONENT OUTSOURCING GOING FORWARD Rationale for Expected Growth in Outsourcing Includes: Current Market Conditions Impact on Outsourcing Trends Outsourcing Allows OEM Labor Labor Continues To Be A Major Force To Focus O
Slide 8: Favorable Free Cash Flow Trend – 2H Weighted
Favorable Free Cash Flow Trend – 2H Weighted FREE CASH FLOW GENERATION IS TOP PRIORITY FREE CASH FLOW HISTORY (1) $70 $50 ($ in Millions) $30 $10 2014 2015 2016 2017 2018 2019 2020 ($10) ($30) ($50) 1st Half 3rd Quarter 4th Quarter Fiscal Year Note: Please reference slide 12 in the Appendix for a re
Slide 9: 2020 Highlights & 2021 Guidance
2020 Highlights & 2021 Guidance RECENTLY RAISED GUIDANCE 2020 Highlights 2021 Guidance • Successfully navigated COVID-19 ~$945M - ~$965M challenges Net Sales (~12% Growth Y/Y to the Midpoint) • Consolidated Adjusted EBITDA margin expansion of ~80 basis points Y/Y ~$112 - $122M • Solid balance sheet
Slide 10: Quanex: A Compelling Investment Opportunity
Quanex: A Compelling Investment Opportunity EXECUTING ON STRATEGIC PRIORITIES TO DRIVE SHAREHOLDER VALUE CREATION ✓ Favorable residential housing tailwinds & components outsourcing trends support opportunity to drive above market growth in key categories ✓ Solid balance sheet…Leverage Ratio(1) of 0.
Slide 11: Appendix
APPENDIX Quanex building products
Slide 12: GAAP/Non-GAAP Reconciliation (Unaudited)
GAAP/Non-GAAP Reconciliation (Unaudited) FREE CASH FLOW ($ in thousands) Q1 Q2 Q3 Q4 Fiscal 2014 Cash provided by operating activities ($11,484) $461 $20,777 $11,024 $20,778 Capital expenditures ($6,748) ($11,849) ($10,429) ($4,753) ($33,779) Free Cash Flow ($18,232) ($11,388) $10,348 $6,271 ($13,00
Slide 13: GAAP/Non-GAAP Reconciliation (Unaudited)
GAAP/Non-GAAP Reconciliation (Unaudited) ADJUSTED NET INCOME & ADJUSTED EBITDA QUANEX BUILDING PRODUCTS CORPORATION NON-GAAP FINANCIAL MEASURE DISCLOSURE (In thousands, except per share data) (Unaudited) Three Months Ended Three Months Ended Three Months Ended Three Months Ended Reconciliation of Ad
Slide 14: GAAP/Non-GAAP Reconciliation (Unaudited)
GAAP/Non-GAAP Reconciliation (Unaudited) NET DEBT 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 January 31, 2021 2020 Revolving Credit Facility $98,000 $152,500 Finance Lease Obligations
Slide 15: Executive Compensation
Executive Compensation ALIGNED WITH SHAREHOLDERS Performance-based compensation philosophy at target • Base salary targeted at market 50th percentile • Annual incentive award based on specific metrics • Long-term incentives as referenced below 2021 Annual Incentive Award • 40% weighting on Revenue g
Slide 16: Investor Contact
Investor Contact: Scott Zuehlke SVP, Chief Financial Officer & Treasurer 1800 West Loop South, Suite 1500 Houston, TX 77027 (713) 877-5327 scott.zuehlke@quanex.com WWW.QUANEX.COM
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