Quanex Sales are Up in Third QuarterAugust 30th, 2011 by DWM Magazine
Quanex Building Products released its third-quarter financial results and says net sales were $252.4 million, 12 percent higher than a year ago, due primarily to the acquisition of Edgetech.
The company reported diluted earnings from continuing operations of $0.24 per share, which included $0.01 per share from Edgetech’s results. The $0.24 per share also included special expense items totaling $0.06 per share. In the third quarter of 2010, diluted earnings from continuing operations were $0.27 per share, which included special expense items of $0.02 per share.
Excluding results of Edgetech and special expense items, third-quarter 2011 earnings were even to a year ago.
In the Engineered Products Group (EPG) third-quarter net sales were $124.1 million, which included $23.7 million of net sales from Edgetech. Excluding Edgetech, net sales were nearly flat compared to the third quarter of 2010, which had the benefit of a $1,500 energy-efficient window tax credit program, according to Quanex.
Third-quarter operating income was $14.1 million, which included $1.0 million of operating income from Edgetech. Edgetech’s results were negatively impacted in the quarter by a step-up in inventory expense of $0.7 million related to the purchase method of accounting. Excluding Edgetech, operating income was equal to the third quarter of 2010 despite headwinds in the end markets.
The company also reported that its EPG experienced higher raw material costs in the quarter, which were generally offset by higher prices, surcharges and productivity improvements. Truseal, one of the company’s warm-edge, insulating glass spacer divisions, initiated an oil-based raw material surcharge effective May 1. The surcharge helped Truseal offset the rising cost of butyl, a key raw material of the business, says Quanex.
“Stagnant home construction and remodeling activity, high levels of homes available for sale, high unemployment and a tight credit market continue to create a difficult business environment for Quanex,” the company says. “A case for a lack of recovery in the housing market in 2012 continues to build, and the company now anticipates flat to reduced customer demand in the coming quarters.”