Despite inflation and supply chain challenges, Quanex Building Products Corp. saw a record second quarter. George Wilson, president and CEO, said the company had noticeable revenue growth and improved profitability.
“Demand for our products was better than expected during the second quarter, and we started to see the benefit of our pass-through pricing strategy,” said Wilson. “Inflationary pressures are ongoing, but we still expect further margin expansion in the second half of our fiscal year. Managing working capital continues to be a challenge in this inflationary environment as the value of our inventory continues to increase, but overall, our balance sheet and liquidity remain strong. We will be focused on generating cash, paying down debt and opportunistically repurchasing our stock in the second half of this year.”
Net sales grew 19.4% during the three months ended April 30, 2022, compared to the same period of 2021. The increase was mainly due to the pass-through of raw material cost inflation, causing price increases.
For the quarter, net sales grew 21.7% and 13.0% in its North American Fenestration segment and European Fenestration segment respectively.
Looking ahead, Wilson said the company’s goal is to increase guidance based on its strong quarter results alongside the success of the pass-through pricing strategy and ongoing conversations with customers.
“We are very cognizant of the current macro-related uncertainties, but we continue to believe that the underlying fundamentals for residential housing are positive and demand for our products remains healthy,” he said. “For the second half of our fiscal year, we now expect low double-digit revenue growth in our North American Fenestration segment. Overall, on a consolidated basis and assuming the current inflation and supply chain challenges do not worsen materially, we estimate this will equate to net sales of $1.18 billion to $1.2 billion, which we expect will generate approximately $150 million to $155 million in Adjusted EBITDA in fiscal 2022.”