Quanex Building Products Corporation · NYSE:NX
Quanex Building Products — Investor Presentation (January 2020)
14 slides from Quanex Building Products's investor presentation, January 2020
Slide 1: Investor Presentation
Investor Presentation January 2020
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 3Q15: Acquired HL Plastics $2,500 Pre 2008 16.0% Spin/Sale 1Q16: Acquired Woodcraft ~14% Acquired 14.0% Aluminite 1Q13 $2,000 Acquired ~11.5% 12.0% Edgetech 2Q11 ~10% Net Sales ($ in Milli
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 ~60% 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 30 U.S. 2 U.K. 1 Germany • short lead times Qu
Slide 6: 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 7: 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 2013 2014 2015 2016 2017 2018 2019 ($10) ($30) ($50) 1st Half 3rd Quarter 4th Quarter Fiscal Year Note: Please reference slide 12 in the Appendix for a re
Slide 8: 2019 Highlights & 2020 Guidance
2019 Highlights & 2020 Guidance 2019 Highlights 2020 Guidance • Above market sales growth in NA & EU ~$865M - ~$885M Fenestration segments Net Sales • Consolidated Adjusted EBITDA margin expansion of ~140 basis points ~$102 - $110M Margin Expansion ~60bps Y/Y to the Midpoint of Guidance • Cash Provi
Slide 9: Quanex: A Compelling Investment Opportunity
Quanex: A Compelling Investment Opportunity EXECUTING ON STRATEGIC PRIORITIES TO DRIVE SHAREHOLDER VALUE CREATION Favorable components outsourcing trend supports opportunity to drive above market growth in key categories Solid balance sheet…Leverage Ratio(1) of 1.2x as of 10.31.19 Delivering s
Slide 10: Appendix
APPENDIX Quanex building products
Slide 11: Solid Balance Sheet with Flexible Capital Structure
Solid Balance Sheet with Flexible Capital Structure RENEWED FOCUS ON RETURNING CAPITAL TO SHAREHOLDERS NX Capitalization ($ in thousands) 10.31.19 Cash & Cash Equivalents $30,868 Senior Secured Revolving Credit Facility due 2023 (1) 142,500 Capital Leases and Other 15,865 Total Debt $158,365 Net Deb
Slide 12: GAAP/Non-GAAP Reconciliation (Unaudited)
GAAP/Non-GAAP Reconciliation (Unaudited) FREE CASH FLOW ($ in thousands) Q1 Q2 Q3 Q4 Fiscal 2013 Cash provided by operating activities ($30,340) $9,557 $27,360 $36,942 $43,519 Capital expenditures ($11,500) ($10,596) ($12,421) ($3,414) ($37,931) Free Cash Flow ($41,840) ($1,039) $14,939 $33,528 $5,5
Slide 13: 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 2020 Annual Incentive Award • 20% weighting on Revenue g
Slide 14: 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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