Quanex Building Products Corporation reported record revenue growth and earnings for the year, despite continued supply chain challenges and inflation, said George Wilson, president and CEO.
“Demand for the products we manufacture remained strong throughout our fiscal year and that continues today,” he added. “Our liquidity position has improved meaningfully over the past year, and our balance sheet is strong. We were able to pay down $65 million of bank debt in fiscal 2021, and we are very close to being net debt free. We are focused on closing the valuation gap that currently exists between us and our peers. As such, the board has authorized a new $75 million share repurchase program, which reflects our strong balance sheet, commitment to returning capital to shareholders and overall confidence in the ability of the company to continue to grow and create value for shareholders over time.”
Quanex reported net sales growth of 14.2% and 25.9% during the three months and 12 months ended October 31, 2021, respectively. The increases were mostly due to improved demand across all product lines and operating segments combined with higher prices primarily related to the pass through of raw material cost inflation, according to the company.
For the fourth quarter and full year, the company posted net sales growth of 10.1% and 19.6%, respectively, in its North American Fenestration segment.
The decrease in earnings for the three months ended October 31, 2021, was driven by inflationary pressures and supply chain challenges. The increase in earnings for the 12 months ended October 31, 2021, was largely due to higher volumes, improved operating leverage and better pricing. This increase was somewhat offset by higher raw material costs and an increase in selling, general and administrative expenses, according to the company.
Looking forward, Wilson said challenges persist, so the company is refraining from providing guidance for 2022.
“Demand remains strong, but ongoing supply chain disruptions continue to create day-to-day operational challenges and ultimately reduce our visibility in the near-term,” he said. “Based on current fundamentals, trends, and recent conversations with our customers, we are taking a measured approach to 2022 guidance. As such, we believe it would be premature to give guidance at this time. However, we feel confident in our ability to realize margin expansion on a consolidated basis in fiscal 2022, second-half weighted, and we remain cautiously optimistic for the year. We intend to re-visit guidance when we report earnings for the first quarter of 2022.”