Quanex lifts margins and repays US$42.25 million of debt as volumes weaken
Fiscal third-quarter sales rose 1.3% to US$501.8 million, while pricing and improved execution supported higher margins and debt reduction.
Quanex Building Products Corporation reported fiscal third-quarter sales of US$501.8 million, up 1.3% from a year earlier. Gross margin increased to 28.2% from 27.9%, while company-defined adjusted EBITDA rose to US$72.7 million from US$70.3 million. The adjusted EBITDA margin improved to 14.5% from 14.2%.
The company generated US$47.8 million in company-defined free cash flow, compared with US$46.2 million a year earlier, and used part of that cash to repay US$42.25 million of debt. Net debt to last-twelve-month adjusted EBITDA declined to 2.8 times from 3.1 times at the end of the second quarter.
Performance varied across Quanex’s businesses. Custom Solutions delivered the strongest growth, with sales up 8.5% to US$111.0 million on higher volumes and improved pricing. Hardware Solutions sales fell 2.7%, although its adjusted EBITDA margin improved to 12.2% from 10.9%.
Extruded Solutions sales rose 2.8%, but higher pricing more than offset lower volumes. The results therefore point to pricing and execution supporting revenue and profitability, while volume weakness remained in two segments.
Quanex reported total debt of US$672.2 million and net debt of US$610.1 million at 31 July, alongside reported liquidity of US$363.1 million. For the first nine months, however, company-defined free cash flow fell to US$24.2 million from US$35.6 million, while operating cash flow declined to US$57.3 million from US$76.6 million.
