Quanex Building Products Corporation (NYSE:NX) Q1 2016 Earnings Conference Call - Preliminary Transcript

Mar 08, 2016 • 11:00 am ET


Quanex Building Products Corporation (NYSE:NX) Q1 2016 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen, and welcome to the Quanex Building Products Fiscal First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference maybe recorded.

I would now like to turn the conference over to our host of today's call Mr. Scott Zuehlke, VP of Investor Relations and Treasurer. You may begin.

Scott Zuehlke

Good morning and thanks for joining on the call. On the call with me today is Bill Griffiths, our Chairman, President and CEO; and Brent Korb, our Senior Vice President of Finance and Chief Financial Officer. This conference call will contain forward-looking statements. For a detailed description of our disclaimer, please see our earnings release issued yesterday afternoon and posted to our website.

Before I turn the call over to Brent, I'd like to mention that we have set a date for the Analyst and Investor Day that was mentioned on last quarter's earnings call. The event will be held in New York on June 29, at the New York Stock Exchange and will be a great opportunity for us to communicate our story and strategy in more detail. Specifics about the event will be distributed over the coming months. We hope to see you all at the NYSE in June.

I will now turn the call over to Brent to discuss financial results. Thank you, Scott. We are very excited to have Scott on Board. He has hit the ground running and has developed a plan for us to be very active over the next year spreading the word about the positive transformation that we have accomplished over the last two years.

Turning to the quarter, consolidated net sales during the three months ended January 31, 2016 increased 58% to $201 million, compared to the same period of 2015. The increase in net sales was primarily driven by contributions from the HL Plastics & Woodcraft acquisition.

EBITDA performance during the first quarter was excellent across all product line and quadrupled to $10.8 million compared to the first quarter of 2015. After adjusting for $5.1 million in transaction costs, and a $2.3 million one-time expense related to a purchase price allocation inventory step-up at Woodcraft, adjusted EBITDA increased significantly to $18.2 million compared to $2.6 million last year.

The acquisitions alone contributed approximately $8.8 million through adjusted EBITDA during the first quarter. The comparable Legacy business, which was more than three times as profitable in the first quarter of this year as it was in the first quarter of last year, contributed to an incremental $6.8 million in EBITDA, largely driven by improvement in our Vinyl Profile business in North America where the teams work throughout 2015 as delivered improvements in productivity.

Switching to leverage and cash flow, let me remind you that immediately following the closing of Woodcraft on November 2 of last year, we had net debt of approximately $304.8 million