Quanex Building Products Corporation · NYSE:NX
Quanex Building Products — Investor Presentation (April 2008)
33 slides from Quanex Building Products's investor presentation, Apr 10, 2008
Slide 1: April 2008
April 2008 This presentation includes forward- looking statements about the prospects of Quanex Building Products Corporation. Please refer to the Company's Amended Form 10-12B/A filed on March 24, 2008.
Slide 2: Agenda
Agenda Transaction Overview Business Overview and Strategy Financial Overview Q & A
Slide 3: Separation Overview
On November 19, 2007, Quanex Corporation announced its plan to separate its Building Products and Vehicular Products businesses Building Products to be spun-off to shareholders in a taxable transaction Immediately following the spin-off, Quanex Corporation (consisting principally of Vehicular Produc
Slide 4: Spin-Off Summary
Anticipated Listing: NYSE: NX Distribution Ratio: 1:1 Estimated Shares Outstanding: 37.3 milion (1) Transaction Close: April 23 (1) Based on the number of shares of Quanex Corporation outstanding common stock as of 12/31/07. Spin-Off Summary
Slide 5: Vision
Vision Become North America's leading manufacturer of engineered building components sold to OEMs and distributors of building products
Slide 6: Company Snapshot
Company Snapshot Engineered Building Products Products Flat rolled aluminum sheet Mill finished Painted & coated PVC extruded window and doors products Window and door fenestration components Insulated glass sealant systems Markets(1) Sales(2) $524 $458 EBITDA/ Margin(3)(4) $76 / 14% $72 / 16% Op In
Slide 7: Nichols Aluminum
Nichols Aluminum We are a technological leader in the production of mill finished and value-add aluminum sheet. Our low-cost, scrap-based continuous caster is a differentiator for us. New residential construction and remodeling are our key markets.
Slide 8: Engineered Building Products
Engineered Building Products We produce window and door components for OEMs that primarily serve the residential building and remodeling markets. We're all about windows and doors and we supply the brand leaders!
Slide 9: Quanex Building Products Product Lines
Quanex Building Products Product Lines | PVC Extruded Window and Insulated Aluminum Window and Door Sealant Sheet Building Door Products Fenestration Systems Products ‘Components + Screens eal™ ished aluminum nea DuraSeal Finihedatuminn mouldings onic Roll formed: installation + Paintedand coated Ba
Slide 10: Engineered Products - Extruded Products
Engineered Products - Extruded Products Extruded Products Extruded Products
Slide 11: Engineered Products - Fenestration Components
Engineered Products - Fenestration Components
Slide 12: Engineered Products - Insulating Glass Sealants
Engineered Products - Insulating Glass Sealants
Slide 13: Aluminum Sheet Building Products - Nichols Aluminum
Aluminum Sheet Building Products - Nichols Aluminum
Slide 14: Company History
Quanex Building Products finishing facility 1989 1990 19911998 Company History Acquistion of Tease Opened new manufacturing cy In od River, OR 2005 2007 MARKET DRIVEN, PROCESS BASED.
Slide 15: Investment Highlights
Investment Highlights ‘Track MARKET DRIVEN, PROCESS BASED.
Slide 16: A Record of Innovation - Both Product and Process
A Record of Innovation - Both Product and Process Both Product and Process Both Product and Process
Slide 17: Cutting-Edge Capabilities
Cutting-Edge Capabilities Culture of continuous process improvement Broad application of lean manufacturing principles Value mapping Six Sigma methodologies Kaizen events Standardized work techniques Specialized Products Specialized Products Competitive Prices Best-in-Class Service and Logistics Low
Slide 18: Superior Reputation for Quality and Service
Superior Reputation for Quality and Service Just-in-time delivery Lead times as short as three days Low finished goods inventories On-time delivery rates well above 90% Cost-effective new product designs Collaborative design & engineering services State-of-the-art manufacturing processes Commitment
Slide 19: Strong Competitive Positions
Strong Competitive Positions Strong product engineering Product co-development practices Customized design and blending High-quality materials Proprietary manufacturing techniques Value-added finishing services Product Differentiation Preferred Supplier Status Defendable Market Positions Attractive,
Slide 20: Organic Growth Prospects
Quanex Bullding Products Organic Growth Prospects ‘Mikron\Wood™ ‘TruSeene™ Duralite™ Mikronin Sunbelt Expand distbuton hanes fo goth inEuropeand Asia RollTrusion"™ extruded products ‘Trusealin South and Southeast Envirosealed—a focuson enetgy efficiency Increase exposure inUS. remodeling ‘market Sol
Slide 21: Quanex Recent Product Launches
Quanex Recent Product Launches + MikronWood™ composite window. profiles + Tru-Defense™ door components + Solar panel components + TruScene™ invisible screens. + Duralite™ warm edge + Advanced thermal spacer coatings + RollTrusion™ Easy- Glide components, w MARKET DRIVEN, PROCESS BASED.
Slide 22: Recent and Continuing New Program Impact
Recent and Continuing New Program Impact
Slide 23: Seasoned Management Team
Quanex Bullding Products Ray Jean Tom Walker Kevin Delaney Paul Hammonds Jeff Galow Tom Brackmann ‘Mark Hermann Gus Coppola Dave Wemmer Seasoned Management Team Chief Executive Officer Chief Financial Officer General Counsel Corporate Development Investor Relations Aluminum Sheet Building Products E
Slide 24: Quanex Financial Review
Quanex Financial Review Tom walker m4 MARKET DRIVEN, PROCESS BASED
Slide 25: Settlement Cost Sensitivity
Settlement Cost Sensitivity *Assumes Quanex Building Products Corporation stock price on spin-off date $ in millions Source: Quanex Building Products Corporation Amended Form 10-12B/A filed March 24, 2008
Slide 26: Balance Sheet Summary
Balance Sheet Summary (Unaudited, $ in million, except per share amounts) Source: Quanex Building Products Corporation Amended Form 10-12B/A filed March 24, 2008. (1) Assumes a Quanex Corporation stock price of $53 per share. (2) Book value per share defined as stockholders' equity divided by outsta
Slide 27: Income Statement Summary
Income Statement Summary Engineered Building Products Aluminum Sheet Building Products $ in millions, Source: Quanex Building Products Amended Form 10-12(b) filed March 24, 2008. (1) Prior to inter-segment eliminations. (2) Prior to corporate overhead and LIFO charges. (3) See reconciliation in Appe
Slide 28: Key Drivers Outlook
Key Drivers Outlook Even though the housing market in 2008 is expected to be the worst in 20 years, we expect to: Continue to outperform the market Be in an enviable position to take advantage of a market recovery Sources: Global Insights (Housing Starts) - March 2008, NAHB (Remodeling) - October 20
Slide 29: Springboard for Growth
History of strong cash flow and attractive financial performance Conservative capital structure No debt $21 million available cash(1) Considerable resources to fund growth strategy Strong, stable cash flows Significant borrowing capacity $275 million revolver Springboard for Growth (1) Subject to ad
Slide 30: Acquisitions & Summary
Quanex Bullding Products Acquisitions & Summary iy Jean MARKET DRIVEN, PROCESS BASED
Slide 31: Acquisition Strategy
Acquisition Strategy Strong Balance Sheet Debt free Significant dry powder Interior and exterior fenestrations targets Expand residential footprint Extend product and process adjacencies to commercial markets Strengthen position in energy-efficient products and applications
Slide 32: Highlights
QBP - A solid business with a record of outperforming its served markets Historically strong cash flows Pristine balance sheet Seasoned management team Demonstrated integration skills Exciting growth potential Highlights
Slide 33: Appendix A
33 Appendix A In addition to using Net Sales and Operating Income to evaluate the Company's financial performance, it also utilizes other financial metrics to evaluate performance, including the non-GAAP financial metric EBITDA. The Company defines EBITDA as earnings before interest expense, taxes,
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