Quanex Building Products Corp (NX) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by, and welcome to the First Quarter 2024 Quanex Building Products Corporation earnings conference call. (Operator Instructions) Please be advised today's conference is being recorded. I will now turn the conference over to your first speaker today, Scott Zuehlke, Senior Vice President, CFO and Treasurer. Please go ahead.

美好的一天，感謝您的支持，歡迎參加 Quanex 建築產品公司 2024 年第一季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。我現在將會議交給今天的第一位發言人，高級副總裁、財務長兼財務主管 Scott Zuehlke。請繼續。

Thanks for joining the call this morning. On the call with me today is George Wilson, our Chairman, President and CEO.

感謝您參加今天早上的通話。今天與我通話的是我們的董事長、總裁兼執行長喬治威爾森 (George Wilson)。

This conference call will contain forward-looking statements and some discussion of our non-GAAP measures forward looking statements and guidance discussed on this call and in our earnings release are based on current expectations. Actual results or events may differ materially from such statements and guidance and Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

本次電話會議將包含前瞻性陳述以及對我們的非公認會計原則措施的一些討論本次電話會議和我們的收益發布中討論的前瞻性陳述和指導均基於當前的預期。實際結果或事件可能與此類聲明和指導有重大差異，Quanex 不承擔更新或修改任何前瞻性聲明以反映新資訊或事件的義務。

For a more detailed description of our forward-looking statement disclaimer and a reconciliation of non-GAAP measures to the most directly comparable GAAP measures, please see our earnings release issued yesterday and posted to our website.

有關我們的前瞻性聲明免責聲明以及非公認會計準則衡量標準與最直接可比較的公認會計準則衡量標準的調節的更詳細說明，請參閱我們昨天發布並發佈在我們網站上的收益報告。

I'll now turn the call over to George for his prepared remarks.

現在我將把電話轉給喬治，聽他準備好講話。

Thanks, Scott, and good morning to everyone joining the call. Before I start my discussion on the quarter. I'd like to take a moment to publicly thank Bill Griffiths for his many years of dedicated service to Quanex. Bill began his career with Quanex as an independent director in 29 when the Quantic CEO. resigned in 2013.

謝謝斯科特，祝所有加入電話會議的人早安。在我開始討論本季之前。我想花點時間公開感謝 Bill Griffiths 多年來為 Quanex 提供的奉獻服務。Bill 29 年在 Quanex 開始了他的職業生涯，擔任獨立董事，當時擔任 Quantic 執行長。 2013年辭職。

Bill was asked by the Board to take over as Chairman and CEO, and he held that role for more than six years. He retired as CEO in January of 2020 and then served as Chairman for the next four years. He was instrumental in transitioning Quanex from a largely commoditized metals company into a true building products. Manufacturing Company has focused on developing a culture of safety, continuous improvement and profitable growth positions us well for the success we are realizing today. Thank you again, Bill for your commitment, dedication and service to Quanex and its employees, customers and shareholders. We wish you and Iris all the best in retirement.

董事會要求比爾接任董事長兼首席執行官，他擔任該職位超過六年。他於 2020 年 1 月辭去執行長職務，並在接下來的四年中擔任董事長。他在將 Quanex 從一家主要商品化的金屬公司轉變為真正的建築產品公司的過程中發揮了重要作用。製造公司致力於發展安全、持續改善和獲利成長的文化，為我們今天的成功奠定了良好的基礎。再次感謝 Bill 對 Quanex 及其員工、客戶和股東的承諾、奉獻和服務。我們祝福您和艾里斯退休後一切順利。

I'll now move on to my prepared remarks about our first quarter performance and our current outlook. Overall, the quarter played out as expected, revenues were down year over year as markets reverted to a more normal seasonal pattern and customer inventory levels declined as lead times and supply chains have improved. In addition, automatic index pricing mechanisms had a negative impact on revenue versus the prior year as raw material costs have declined, even with lower demand levels, we were able to realize margin expansion on a consolidated basis, mainly due to solid operational performance, holding discretionary pricing, lower stock-based comp expense and lower interest expense. We were very pleased with our operating cash flow generation, which enabled us to continue to pay down debt in the quarter where we are typically where we typically draw on our revolver.

現在，我將繼續就我們第一季的業績和當前的前景發表準備好的評論。總體而言，本季的表現符合預期，收入同比下降，因為市場恢復到更正常的季節性模式，隨著交貨時間和供應鏈的改善，客戶庫存水準下降。此外，由於原材料成本下降，自動指數定價機制對收入產生了負面影響，即使需求水平較低，我們也能夠在合併的基礎上實現利潤率擴張，這主要是由於穩健的營運業績，持有酌情定價、較低的股票補償費用和較低的利息費用。我們對我們的營運現金流產生非常滿意，這使我們能夠在我們通常使用左輪手槍的季度繼續償還債務。

With respect to the overall macro economic environment, we continue to believe we will see an uptick in demand in the second half of the year. And in North America, new housing starts, data has shown improvement and optimism is building around the prospect of lower interest rates later this year. If and when the Fed does take action to lower interest rates, we believe demand for our products will improve as customers gain confidence and choose to spend more money on housing in Europe.

就整體宏觀經濟環境而言，我們仍然相信下半年需求將會回升。在北美，新屋開工數據顯示有所改善，圍繞今年稍後降息的前景正在形成樂觀情緒。如果聯準會確實採取行動降低利率，我們相信，隨著客戶信心增強並選擇在歐洲的住房上花更多錢，對我們產品的需求將會改善。

We believe market improvements will occur at some point, but will lag North America due to the ongoing wars in Ukraine and Gaza and continued pressure on energy costs in these regions. But regardless of the demand equation we have shown over the past two years that the Quanex operating model is able to react quickly to produce favorable results. In addition, the long-term underlying fundamentals for residential housing continue to be very positive globally. Inflationary pressures have been mixed. Starting with labor costs.

我們相信市場在某個時候會出現改善，但由於烏克蘭和加薩持續的戰爭以及這些地區能源成本的持續壓力，市場將落後於北美。但無論需求方程式如何，我們在過去兩年中都表明，Quanex 營運模式能夠快速做出反應，產生有利的結果。此外，全球住宅的長期基本面仍然非常積極。通膨壓力好壞參半。從勞動成本開始。

We have seen a slowdown in the rate of wage inflation as hiring in most markets has slowed for the sourced materials that are most impactful to Quanex. We are seeing a stabilization in pricing and supply for aluminum, steel and resins we are still seeing input cost pricing pressures for films and engineered adhesives and some of the chemical feedstocks for our cabinet component products. We are now starting to see upward pricing movements for some of the hardwood species we purchase as lumber mills have reduced capacity in the market.

我們看到薪資通膨率放緩，因為大多數市場對 Quanex 影響最大的原物料招聘速度放緩。我們看到鋁、鋼和樹脂的定價和供應趨於穩定，我們仍然看到薄膜和工程黏合劑以及我們櫥櫃組件產品的一些化學原料的投入成本定價壓力。由於木材廠減少了市場產能，我們現在開始看到我們購買的一些硬木樹種的價格上漲。

Finally, from a logistics perspective, we have seen an increase in international shipping costs due to the disrupted shipping lanes in the Middle East. As we look forward to the rest of this year and into next year, I'm still confident that we are well positioned to meet expectations and continue our track record of positive performance.

最後，從物流角度來看，由於中東航線中斷，我們看到國際運輸成本增加。當我們展望今年剩餘時間和明年時，我仍然相信我們有能力滿足期望並繼續保持我們的積極業績記錄。

Our operations and supply chain teams are focused on servicing our customers and performing at a high level and are doing a fantastic job of generating operating cash flow from a growth and strategy execution point of view, our balance sheet is strong and ready to support growth projects as they arise. We continue to identify areas of opportunities to execute on our profitable growth plan, both organically and inorganically. Despite some short-term macro challenges and the uncertainty caused in an election year, we are in track to achieve all of our objectives.

我們的營運和供應鏈團隊專注於為客戶提供服務並維持高水準績效，從成長和策略執行的角度來看，我們在產生營運現金流方面做得非常出色，我們的資產負債表強勁，準備好支援增長項目當它們出現時。我們繼續尋找機會領域來執行我們的有機和無機獲利成長計劃。儘管存在一些短期宏觀挑戰以及選舉年帶來的不確定性，但我們有望實現所有目標。

I will now turn the call over to Scott, who will discuss our financial results in more detail.

我現在將把電話轉給斯科特，他將更詳細地討論我們的財務表現。

Thanks, George. On a consolidated basis, we reported net sales of $239.2 million during the first quarter of 2024, which represents a decrease of 8.7% compared to $261.9 million during the first quarter of 2023. The decrease was mostly attributable to softer market demand and lower pricing in North America, mostly in our Cabinet Components segment as pricing held up in our fenestration sites, net income increased to $6.2 million, or $0.19 per diluted share for the three months ended January 31, 2024, compared to $1.9 million or $0.06 per diluted share for the three months ended January 31, 2023.

謝謝，喬治。在合併基礎上，我們報告 2024 年第一季的淨銷售額為 2.392 億美元，與 2023 年第一季的 2.619 億美元相比下降了 8.7%。減少的主要原因是北美市場需求疲軟和定價較低，主要是我們的櫥櫃組件部門，因為我們的開窗站點定價保持不變，淨利潤增加至620 萬美元，即截至1 月31 日的三個月稀釋後每股收益0.19 美元，2024 年，相較之下，截至 2023 年 1 月 31 日的三個月為 190 萬美元，或稀釋後每股 0.06 美元。

After adjusting for one-time items, net income decreased slightly to $5.8 million or $0.18 per diluted share for the quarter compared to $6.1 million or again, $0.18 per diluted share for the same period of last year. On an adjusted basis, EBITDA for the quarter decreased to $19.3 million compared to $20.5 million during the same period of last year. However, we were able to realize margin expansion of approximately 30 basis points on a consolidated basis. The increase in reported earnings for the three months ended January 31, 2024 was largely due to a decline in raw material costs, a decrease in stock-based compensation expense and lower interest expense.

在一次性項目進行調整後，本季淨利潤小幅下降至 580 萬美元，即每股攤薄收益 0.18 美元，而去年同期淨利潤為 610 萬美元，即每股攤薄收益 0.18 美元。經調整後，本季 EBITDA 降至 1,930 萬美元，去年同期為 2,050 萬美元。然而，我們的綜合利潤率實現了約 30 個基點的擴張。截至2024年1月31日的三個月報告收益的增加主要是由於原物料成本下降、股票補償費用減少和利息費用減少。

Now for results by operating segment, we generated net sales of $148 million in our North American Fenestration segment for the first quarter of 2024, a decline of 3.3% compared to $153 million in the first quarter of 2023, driven by a decrease in volumes due to softer market demand. We estimate. The volumes in this segment declined by about 3% year over year, with pricing holding up relatively well. Adjusted EBITDA decreased slightly to $13.7 million in this segment compared to $15 million for the same period of 2023. Our Quanex custom mixing business, formerly LMI, continues to perform well. We're looking for ways to expand this business, both organically and otherwise.

現在按營運部門劃分的業績顯示，2024 年第一季我們的北美門窗部門淨銷售額為 1.48 億美元，與 2023 年第一季的 1.53 億美元相比下降了 3.3%，原因是銷量下降。市場需求疲軟。我們估計。該細分市場的銷量較去年同期下降約 3%，但價格保持相對較好。該細分市場調整後 EBITDA 略有下降，降至 1,370 萬美元，而 2023 年同期為 1,500 萬美元。我們的 Quanex 客製化混合業務（以前稱為 LMI）繼續表現良好。我們正在尋找有機或其他方式擴展這項業務的方法。

Our European Fenestration segment generated revenue of $49.4 million in the first quarter, which represents a decrease of about 10% compared to $55 million in the first quarter of 2023. We estimate that volumes declined by approximately 12% year over year in this segment with pricing up approximately 1% and positive foreign exchange translation impact of about 2%.

我們的歐洲門窗部門第一季的營收為 4,940 萬美元，與 2023 年第一季的 5,500 萬美元相比下降了約 10%。我們估計該細分市場的銷量年減約 12%，定價上漲約 1%，外匯換算帶來約 2% 的正面影響。

Adjusted EBITDA increased and came in at $10 million for the quarter compared to $9.7 million in the first quarter of 2023. Pricing held up nicely during the quarter, and we continue to perform well from an operational standpoint, which led to adjusted EBITDA margin expansion of 250 basis points year over year. Normalized buying from our European spacer customers supported results as the inventory rebalancing projects that impacted the business last year are no longer present continued improvements in operational metrics, combined with sourcing initiatives and pricing carryover all contributed to realizing margin expansion.

本季調整後 EBITDA 有所成長，達到 1,000 萬美元，而 2023 年第一季為 970 萬美元。本季定價維持良好，從營運角度來看，我們繼續表現良好，調整後 EBITDA 利潤率年增 250 個基點。我們的歐洲墊片客戶的正常化採購支持了業績，因為去年影響業務的庫存重新平衡項目不再存在，運營指標的持續改進，加上採購計劃和定價結轉，都有助於實現利潤率擴張。

In this segment, we generated net sales of $43.1 million in our North American Cabinet Components segment during the quarter, which was 21.1% lower than prior year. This decrease was driven by lower volumes and lower index pricing for hardwoods. We estimate the volumes declined by about 12% in this segment year over year with the remainder of the revenue decline versus Q1 of 2023 due to a decrease in price largely related to index pricing tied to the decline in hardwood costs. Adjusted EBITDA was negative for the quarter in this segment compared to $1.7 million in the first quarter of 2023. Positive operational execution is currently being masked by low volume, but we're hopeful for a rebound in this segment once consumer confidence is restored and the R&R market picks up.

在該細分市場中，本季我們的北美櫥櫃組件細分市場淨銷售額為 4,310 萬美元，比去年同期下降 21.1%。這一下降是由於硬木銷售下降和指數定價下降所致。我們估計該細分市場的銷售量年減約 12%，其餘收入較 2023 年第一季下降，原因是價格下降主要與與硬木成本下降相關的指數定價有關。該部門本季調整後 EBITDA 為負，而 2023 年第一季為 170 萬美元。目前，積極的營運執行被低銷售所掩蓋，但我們希望一旦消費者信心恢復且休閒娛樂市場回暖，該領域就會出現反彈。

Moving on to cash flow and the balance sheet. Cash provided by operating activities was $3.9 million for the first quarter of 2024, which represents an increase of 22.9% compared to $3.1 million for the first quarter of 2023. However, our free cash flow decreased for the quarter due to higher CapEx spend compared to the first quarter of last year.

轉向現金流和資產負債表。2024 年第一季經營活動提供的現金為 390 萬美元，較 2023 年第一季的 310 萬美元成長 22.9%。然而，由於資本支出高於去年第一季度，我們本季的自由現金流有所下降。

Our balance sheet continues to be strong. Our liquidity keeps improving and our leverage ratio of net debt to last 12 months. Adjusted EBITDA was unchanged versus last quarter at 0.1 times as of January 31st, 2024. Excluding real estate leases that are considered financed leases under US GAAP, we are net debt free.

我們的資產負債表仍然強勁。我們的流動性持續改善，淨債務槓桿持續12個月。截至 2024 年 1 月 31 日，調整後 EBITDA 與上季持平，為 0.1 倍。不包括根據美國公認會計原則被視為融資租賃的房地產租賃，我們沒有淨債務。

As George mentioned, we were able to prepay $5 million of debt during Q1, which isn't normal since we are typically a net borrower during our first fiscal quarter due to the seasonality of our business, we will remain focused on generating cash and paying down what little debt we have outstanding on our revolver. We will also maintain our focus on growing the company through organic, inorganic and innovative growth opportunities as they arise, while continuing to preserve our healthy balance sheet as always, the goal is to create shareholder value.

正如喬治所提到的，我們能夠在第一季預付500 萬美元的債務，這是不正常的，因為由於我們業務的季節性，我們在第一個財政季度通常是淨借款人，我們將繼續專注於產生現金和支付減少我們左輪手槍上所欠的少量債務。我們也將繼續專注於透過出現的有機、無機和創新成長機會來發展公司，同時繼續一如既往地保持健康的資產負債表，目標是創造股東價值。

As referenced in the earnings release, based on conversations with our customers' recent demand trends in the latest macro data, we're now comfortable providing official guidance for fiscal 2024, which is as follows net sales of approximately $1.1 billion, adjusted EBITDA of $145 million to $150 million, depreciation and amortization of approximately $44 million to $46 million, SG&A of $128 million to $130 million. Interest expense of $3.5 million to $4 million, a tax rate of 20% and CapEx of $40 million to $45 million. In addition, our guidance for free cash flow is $85 million to $90 million for fiscal 2024.

正如收益發布中所提到的，根據與客戶在最新宏觀數據中的近期需求趨勢的對話，我們現在願意提供2024 財年的官方指導，具體如下：淨銷售額約為11 億美元，調整後EBITDA為145 美元100 萬至 1.5 億美元，折舊和攤銷約為 4,400 萬至 4,600 萬美元，SG&A 為 1.28 億至 1.3 億美元。利息支出為 350 萬至 400 萬美元，稅率為 20%，資本支出為 4,000 萬至 4,500 萬美元。此外，我們對 2024 財年自由現金流的指導為 8,500 萬至 9,000 萬美元。

From a cadence perspective, for the second quarter of this year versus the second quarter of last year, we expect revenue to be flat to down 2% on a consolidated basis by segment for the second quarter of this year compared to the second quarter of last year, we expect revenue to be up 2% to 4% in our North American Fenestration segment, down 2% to 4% in our European Fenestration segment and down 11% to 13% in our North American Cabinet Components segment. On a consolidated basis, adjusted EBITDA margin is expected to be down 100 basis points to 150 basis points in the second quarter of 2024 again compared to the second quarter of last year.

從節奏的角度來看，今年第二季與去年第二季相比，我們預計今年第二季按細分市場劃分的合併收入與去年第二季相比將持平或下降 2%今年，我們預計北美門窗部門的營收將成長2% 至4%，歐洲門窗部門的營收將下降2% 至4%，北美櫥櫃零件部門的收入將下降11% 至13%。綜合來看，預計 2024 年第二季調整後 EBITDA 利潤率將比去年第二季再次下降 100 個基點至 150 個基點。

Operator, we are now ready to take questions.

接線員，我們現在準備好回答問題。

(Operator Instructions) Julio Romero, Sidoti.

（操作員說明）Julio Romero，Sidoti。

Hey, good morning, guys.

嘿，早上好，夥計們。

Good morning.

早安.

Could you speak to.

你能說話嗎？

Hey, good morning. Could you speak to what you're hearing from the OEM customers in regards to repair and remodel trends? And just talk about what you're hearing as to what can maybe improve demand in the second half of your fiscal year?

嗨，早安。您能否談談您從 OEM 客戶那裡聽到的有關維修和改造趨勢的資訊？請談談您所聽到的關於什麼可以改善您財年下半年的需求？

Yeah, the International Home Builder Show was last week and we spent a lot of time talking to many of the of our different customers and others throughout the segment. And I think the sentiment right now is that the back half of the year, we'll see a pickup on we've already seen new construction data start to show some improvement on. But, you know, everyone is convinced that the R&R demand it is there is pent-up and that with any movement in interest rates on the downward side, which everyone believes will happen at some point in the back half of the year that you'll see both new construction and R&R see an uptick. R&r will probably lag a little bit on to the new construction data, but everyone was extremely optimistic on what they see at the end of this year and going into next year.

是的，上週舉行了國際住宅建築商展，我們花了很多時間與許多不同的客戶和整個細分市場的其他人交談。我認為現在的情緒是，今年下半年，我們將看到新的建築數據開始顯示出一些改善的回升。但是，你知道，每個人都相信 R&R 需求已被壓抑，並且隨著利率的任何下行趨勢，每個人都認為這將在今年下半年的某個時候發生。我們將看到新建築和R&R 都會有所增加。R&R 可能會稍微落後於新的建築數據，但每個人都對今年年底和明年的情況非常樂觀。

Got it. That's very helpful there. And then maybe can you speak to the guidance and what's embedded for the full year across the segments from a margin perspective? And how do you see kind of that trajectory playing out for the full year across the three segments?

知道了。這非常有幫助。然後，也許您可以從利潤的角度談談指導意見以及全年各細分市場的內容嗎？您如何看待全年這三個細分市場的發展軌跡？

I mean, we've mentioned a couple of times now that on a consolidated basis, margins will be pressured a little bit year over year 2024 versus 2023. But as a cadence through the year, we expect margins to improve as the year progresses, which is typical seasonality in our business volume leverage, operating leverage improves throughout the year and we expect the same this year depending on the quarter. I mean we gave some cadence for for 2Q will do the same for 3Q and 4Q as the year progresses. But as you're modeling, you can expect margin improvement throughout the year.

我的意思是，我們已經多次提到，在綜合基礎上，與 2023 年相比，2024 年的利潤率將逐年受到一些壓力。但作為全年的節奏，我們預計利潤率會隨著時間的推移而改善，這是我們業務量槓桿的典型季節性，營運槓桿全年都會改善，我們預計今年也會有所改善，具體取決於季度。我的意思是，隨著時間的推移，我們為第二季制定了一些節奏，第三季和第四季也會這樣做。但當您進行建模時，您可以預期全年利潤率都會提高。

Okay.

好的。

Really helpful.

真的很有幫助。

There and then, Scott, the revenue guidance you gave for the North American Fenestration segment of up 2% to 4% year over year in the second quarter is a pretty nice step up sequentially from from Q1. Can you maybe just talk about what's embedded there from a price volume perspective?

Scott，您對北美門窗業務第二季度同比增長 2% 至 4% 的收入指引是比第一季連續增長的一個相當不錯的進步。您能否從價格數量的角度談談其中嵌入的內容？

Yeah.

是的。

I mean that again, typical seasonality, we start seeing a pickup towards the second part of the second quarter on price volume, I mean that volume is improving. That's most of it. We've been able to hold onto price for the most part we do expect expect some pricing pressure in the Finnish operation segments, both here and in Europe. However, volumes should start to improve, which will obviously help revenue and margin.

我的意思是，典型的季節性，我們開始看到第二季下半年價格量的回升，我的意思是交易量正在改善。這就是大部分。我們在很大程度上能夠保持價格不變，我們預計芬蘭的營運部門（無論是在這裡還是在歐洲）都會面臨一些定價壓力。然而，銷量應該開始改善，這顯然將有助於收入和利潤。

Okay, great. I'll pass it on and circle back with any follow-ups.

好的，太好了。我會將其轉發並進行後續跟進。

Thank you.

謝謝。

(Operator Instructions) Reuben Garner, Benchmark.

（操作員指示）Reuben Garner，基準。

Thank you. Good morning, everybody, and congrats to Bill on your retirement as you enjoy it. And George, congrats on your your move as well.

謝謝。大家早安，恭喜比爾退休，祝您退休愉快。喬治，也祝賀你的舉動。

So I guess to start, it looks like a continuation of a trend that we've seen in the last several quarters is what's kind of implied in your guidance where we'll see continued gross margin expansion despite some volume headwinds and that looks like some pricing headwinds as well. But we're deleveraging on the SG&A. Why am I thinking about that the right way in one and two, is that is that largely driven by kind of the mix shift that you're seeing where cabinets is a lower gross margin business and underperforming at the moment? Are you still price cost positive? Just kind of walk me through how you get to that assumption.

因此，我想首先，我們在過去幾季看到的趨勢似乎延續了您的指導中所暗示的內容，儘管存在一些銷售阻力，但我們將看到毛利率持續增長，而且看起來有些定價也面臨阻力。但我們正在對SG&A 進行去槓桿化。為什麼我在第一和第二點以正確的方式思考這一點，這很大程度上是由您所看到的混合轉變所驅動的，其中櫥櫃是毛利率較低且目前表現不佳的業務？您的價格成本仍然是正值嗎？請告訴我你是如何得出這個假設的。

So I'll give some general guidance there, Ruben. And first of all, thanks for your kind words for both Bill and I am you know, as we progress through the year, the improvement in margin is very tied to the uptick in volume. As you know, on some of our processes are continuing continuous type of extrusion process. So volume does play a big, big role in the gross margins of our business. I think we'll continue to see that and feel very comfortable. I think we're confident that we'll start to see some improvement in the volumes as well.

所以我會在那裡提供一些一般性指導，魯本。首先，感謝您對比爾和我的客氣話，您知道，隨著我們在這一年中取得進展，利潤率的提高與銷量的上升密切相關。如您所知，我們的一些製程屬於連續式擠壓製程。因此，銷量確實在我們業務的毛利率中發揮著巨大的作用。我想我們會繼續看到這一點並感到非常舒適。我認為我們有信心我們也會開始看到銷量的一些改善。

On the on the cabinet side of our business, we're starting to see a little bit of that. And again, as consumer confidence grows, and that's an area that tends to be focused on kitchen and bath remodels on. So we're pretty confident in the ability of all of our segments to grow to grow in terms of margin, the one that will be most pressured in Europe, and that's because of the continued softness in that market as well as some pricing pressure that they continue to face.

在我們業務的櫥櫃方面，我們開始看到一些這樣的情況。再說一遍，隨著消費者信心的增長，廚房和浴室的改造往往會成為人們關注的焦點。因此，我們對所有細分市場的利潤率成長能力非常有信心，歐洲將面臨最大的壓力，這是因為該市場持續疲軟以及一些定價壓力他們繼續面對。

And I guess on that note, George, the cabinet side, I guess the optimistic outlook that you can see that business turnaround, the life of this for the fenestration business are definitely outperformed over the last year or so. What do you think is driving that? Is it simply was there pull-forward demand from COVID for cabinets and not necessarily in Windows or something else?

我想在這一點上，喬治，內閣方面，我想你可以看到業務好轉的樂觀前景，門窗業務的壽命肯定比過去一年左右的表現要好。您認為是什麼推動了這個趨勢？難道只是因為新冠疫情對櫥櫃產生了拉動需求，而不一定是窗戶或其他東西？

Dan, what do you think that the cabinet space is underperforming fenestration?

丹，你認為櫥櫃空間的表現不如開窗？

You know, I do think that there was some of the COVID pull forward. Obviously, I think a lot of people focused on some remodeling in their house when when you're constrained to being indoors or at least the work from home. I think we did see a lot of that. I think that that type of product tends to be a little more discretionary on the art side versus the fenestration, if you're at a point where you have to replace a window or a door and you're effectively going to do it, it's not as much as a discretionary spend to some extent it is, but not as much as the cabinet. So I think you're right, there was a pull-forward effect and there is some some differences in terms of the demand fenestration versus cabinets in that regard.

你知道，我確實認為新冠疫情有一些推動作用。顯然，我認為當你被限制在室內或至少在家工作時，很多人會專注於對他們的房子進行一些改造。我想我們確實看到了很多這樣的情況。我認為，與開窗相比，這種類型的產品在藝術方面往往更加隨意，如果你必須更換窗戶或門並且你實際上會這樣做，那麼它是在某種程度上，它不像可自由支配支出那麼多，但也不像內閣那麼多。所以我認為你是對的，存在拉動效應，在這方面，開窗與櫥櫃的需求存在一些差異。

And can you point to I know you guys track the industry data pretty closely.

你能指出我知道你們非常密切地追蹤行業數據嗎？

Like have you been outperforming in fenestration because of some of your internal initiatives and maybe there's less of that in cabinets to be able to kind of outperform the underlying market at this point.

就像你在開窗方面表現出色，因為你的一些內部舉措，也許櫥櫃方面的表現較少，目前能夠跑贏基礎市場。

As you know, in our mind, I think we worked hard to get some share on, I think, performance during the COVID period, having having used sourcing and having a supply chain. That's what I would say they've been very structured to protect our customers from shortages and outages of health of the duplicity of processes across multiple facilities continues to help on. So I think we've been able to take advantage of that aspect. Overall, though, as you know, we may be a little ahead of some of the peer groups, but generally in line.

如您所知，在我們看來，我認為我們努力在新冠疫情期間的業績上獲得一些份額，我們已經使用了採購並擁有了供應鏈。這就是我想說的，他們的結構非常完善，可以保護我們的客戶免受短缺和健康中斷的影響，跨多個設施的雙重流程繼續提供幫助。所以我認為我們已經能夠利用這方面的優勢。總體而言，如您所知，我們可能稍微領先於一些同行群體，但總體上是一致的。

Okay, great. Good luck, guys. I'll pass it on there, things.

好的，太好了。祝大家好運。我會把它傳遞給那裡，事情。

Thank you.

謝謝。

(Operator Instructions) Steven Ramsey, Thompson Research Group.

（操作員說明）Steven Ramsey，湯普森研究小組。

Hi, this is Katherine Thompson calling in for Steven today. And Bill, not a lot of management play for many years and best of luck in your next chapter.

大家好，我是凱瑟琳湯普森今天打電話給史蒂文。比爾，多年來沒有太多的管理經驗，祝你在下一篇章好運。

And following up just on a few questions today. Just within the US, all the components grew at separate US administration. Could you discuss why US, non penetration sales continued to show solid growth and the drivers there and overall contribution to your guide.

今天就幾個問題進行跟進。就在美國境內，所有組成部分均由美國政府單獨管理。您能否討論為什麼美國的非滲透銷售繼續表現出穩健的成長以及那裡的驅動因素以及對您的指南的整體貢獻。

So the markets that are non fenestration on one of the larger ones we participate in the fencing market. And we also sell products into the solar market, which has had some pretty good demand and tends to be a little bit better on the profitability curve.

因此，我們參與的較大市場之一的非開窗市場是擊劍市場。我們也向太陽能市場銷售產品，該市場的需求相當不錯，而且獲利曲線往往更好一些。

And then in addition, our QCM, the acquisition of LMI has been, you know, extremely helpful and a great addition to our group. And that continues to be a focus on many industries outside of fenestration. It's a it's a very diverse set of markets it serves and then they performed very strong within our first quarter. So and as you know, part of our strategy has been to both bolster and build out our fenestration product portfolio as well as expand and grow into adjacent markets. And I think what you're starting to see is and the realization of that strategy, and we will continue to build on those on a go forward basis.

此外，我們的 QCM、LMI 的收購，你知道，對我們的團隊非常有幫助，也是一個巨大的補充。這仍然是開窗以外許多行業關注的焦點。它所服務的市場非常多元化，並且在我們的第一季表現非常強勁。因此，如您所知，我們策略的一部分是加強和建立我們的門窗產品組合，以及擴展到鄰近市場。我認為您開始看到的是該策略的實現，我們將繼續在此基礎上繼續前進。

Thanks. And then a follow-up on an earlier conversation. Just on residential R&R activity. Could you clarify what parts of or at least talk to the parts of the business, our total exposure that is to existing home sales versus new.

謝謝。然後是先前談話的後續。只是住宅 R&R 活動。您能否澄清一下業務的哪些部分或至少談談業務的哪些部分，我們對現有房屋銷售與新房銷售的整體敞口。

So on a consolidated basis were 65%, 70% weighted to R&R from our European Fenestration segment. And our North American Cabinet Components segment is definitely more weighted than that in total.

因此，在綜合基礎上，我們的歐洲門窗部門的 R&R 權重為 65%、70%。我們的北美櫥櫃組件細分市場的權重肯定比整體的權重更大。

Okay, perfect. And then final question in the North American segment put toward a 9.3% EBITDA margin, so down 30 basis points year over year and off from kind of like mid 10s results in the prior three quarters. Do you have and you talked about early, but just kind of against that backdrop, do you expect any issues similar to the US prior like you did in the previous year over the next quarters and getting back more specifically to that low to mid teen range. Thank you.

好的，完美。然後北美市場的最後一個問題是 EBITDA 利潤率為 9.3%，年減 30 個基點，與前三個季度 10 左右的水平相比有所下降。您是否有並且您很早就談過，但只是在這種背景下，您是否預計未來幾個季度會出現類似於美國之前的問題，就像您去年所做的那樣，並更具體地回到中低青少年範圍。謝謝。

And that have a lot to do with the seasonality of our business. And the low watermark is typically first quarter with a decent jump in each definitely in 2Q over 1Q and 3Q over 2Q, 4Q is typically could be better could be in line with 3Q just depending on weather and whether or not we hit winter earlier than expected, but yet we expect margins to improve sequentially.

這與我們業務的季節性有很大關係。低水位線通常是第一季度，第二季度比第一季度和第三季度比第二季度肯定都有不錯的跳躍，第四季度通常可能會更好，可能與第三季度一致，這取決於天氣以及我們是否比預期更早進入冬天，但我們預期利潤率將持續改善。

Okay. And then just one final question. And we were also at the builder show best attendance. I think in history, a lot of M&A chatter and the most that I've heard in many years what do you what are the types of opportunities that you see from an M&A standpoint for Quanex? And are how are you balancing that versus repurchasing your own shares?

好的。最後還有一個問題。我們也是建築商展上出席率最高的。我認為在歷史上，有很多關於併購的討論，我多年來聽到最多的，從併購的角度來看，您認為 Quanex 面臨哪些類型的機會？您如何平衡這一點與回購自己的股票？

So I think right now, the way I would answer that, I think growth is a major focus for us on a go-forward basis. So I think both organic and inorganic expansion of existing product lines and growth into new businesses through acquisition is absolutely a priority, and we've spent resources and time pursuing both sides of that.

所以我認為現在，我會回答這個問題，我認為成長是我們未來的主要關注點。因此，我認為現有產品線的有機和無機擴張以及透過收購發展新業務絕對是當務之急，我們已經花費了資源和時間來追求這兩個方面。

You know, I agree with you. I think we have seen more activity in M&A opportunities start to arise. I think the answer that I will give today is that we continue to remain very focused on the opportunities that we look at, we'll continue to check the boxes of either building out our existing markets with products and part of that adds to the portfolio or expand into new things and those opportunities have also got to improve the margin profile of the business.

你知道，我同意你的觀點。我認為我們已經看到更多的併​​購活動開始出現。我認為我今天要給出的答案是，我們將繼續非常關注我們所關注的機會，我們將繼續檢查是否用產品建立現有市場，並將其中的一部分添加到產品組合中或擴展到新事物，這些機會也必須改善業務的利潤狀況。

So we're focused on on revenue growth through adding a products in existing or new markets that improve the profitability profile of Quanex, and we will stay true to that mantra. And we have a solid business plan with or without M&A. And so we will be very diligent on what we do on a go-forward basis.

因此，我們專注於透過在現有或新市場中添加產品來提高收入成長，從而提高 Quanex 的獲利狀況，我們將恪守這一口號。無論是否進行併購，我們都有可靠的商業計劃。因此，我們將非常努力地繼續推進我們的工作。

And with everything that think our stock repurchases, I mean, we have a healthy conversation with our Board every quarter. It seems on capital allocation priorities the stock repurchase authorization we have in place. I think we have about $68 million left on that authorization. It's opportunistic. Clearly, our stock has performed pretty well versus our peers. So as we balance that with wanting to profitably grow this company, I think you can tell where the priorities lie.

我的意思是，對於所有認為我們股票回購的事情，我們每季都會與董事會進行健康的對話。似乎在資本配置優先順序上，我們已經制定了股票回購授權。我認為我們的授權還剩下大約 6800 萬美元。這是機會主義的。顯然，與同業相比，我們的股票表現相當不錯。因此，當我們平衡這一點與希望公司實現盈利成長時，我認為你可以知道優先事項在哪裡。

Okay, great. And best of luck.

好的，太好了。祝你好運。

Thanks.

謝謝。

(Operator Instructions) Kevin Jamie, Thompson Davis.

（操作員指示）Kevin Jamie、Thompson Davis。

Good morning, George and Scott. Kevin for Adam, maybe if we could talk a little bit about the pricing pressure that you guys noted on. Was it in line with what you saw in Q4? And do you think that it probably gets better or worse on a calendar year. It goes on.

早上好，喬治和斯科特。凱文（Kevin）代表亞當（Adam），也許我們可以談談你們注意到的定價壓力。這與您在第四季度看到的一致嗎？您認為一年中情況可能會變得更好還是更糟？它繼續下去。

And so I think the tenor of those conversations are very, very similar to what we saw at the back end of Q4 and obviously, the pressure is still there. I think we're starting to see signs of raw materials flattening out or in some cases may be starting to tick back up again on.

因此，我認為這些對話的基調與我們在第四季末看到的情況非常非常相似，顯然，壓力仍然存在。我認為我們開始看到原材料趨於平緩的跡象，或者在某些情況下可能開始再次回升。

So I think all of the discussions will probably continue to be robust. I think the data behind it will give a continued ammunition to say in all the markets are what they are right now, and we're actually seeing signs of that on the pricing needs civil. So I think for a couple of quarters, we'll continue to have a many discussions as it relates to the pricing levels that have happened over the last few years.

所以我認為所有的討論可能會繼續激烈。我認為背後的數據將提供持續的彈藥來說明所有市場的現狀，而且我們實際上已經看到了民間定價需求的跡象。因此，我認為在接下來的幾個季度中，我們將繼續進行許多討論，因為這與過去幾年發生的定價水平有關。

Appreciate that. And then maybe we could talk about ARM. It looks like your sales were probably in line and margins were above on the margin strength that you guys saw. Any NOI Q1 surprised you at all?

感謝。然後也許我們可以談談 ARM。看來你們的銷售額可能符合預期，利潤率也高於你們看到的利潤率。NOI Q1 有什麼讓你感到驚訝的嗎？

No, I don't think so. I think it's been exactly what we would have anticipated in our growth and margin. To some extent in only there's a little mix issue. There's obviously operational performance and I'm extremely proud of our operational and our supply chain teams of really being ahead of the curve.

不，我不這麼認為。我認為這正是我們對成長和利潤的預期。某種程度上只是存在一點混合問題。顯然有營運績效，我對我們的營運和供應鏈團隊真正處於領先地位感到非常自豪。

And so I don't think it's anything that we didn't anticipate

所以我認為這並不是我們沒有預料到的

And maybe we could talk about and a little. You've talked about it a couple of times, but maybe in general, what's driving the overall margin outperformance with them?

也許我們可以談談。您已經談論過幾次了，但也許總的來說，是什麼推動了他們的整體利潤率表現出色？

The decline in sales?

銷量下降？

So, you know, it's a combination of a couple of things. I think our price has been able to hold hold hold steady. I think our supply chains again, are doing a very good job of leveraging their buy across divisions, finding ways to continue to reengineer products and to enhance the margin of our products as well as in other to that, a little bit of a mix, a mix issue in the quarter to home.

所以，你知道，這是幾件事的結合。我認為我們的價格已經能夠保持穩定。我認為我們的供應鏈在利用跨部門的採購方面做得非常好，找到繼續重新設計產品並提高我們產品的利潤率以及其他方面的方法，有點混合，本季度的混合問題。

We obviously no different than any other company with a broad set of portfolio will go up and down on the markets, I would say the other thing that adds to the profitability piece here is and we mentioned in my in my comments at the beginning, I think we've established pretty well over the last couple of years that our cost model flexes really quick and up or down.

顯然，我們與任何其他擁有廣泛投資組合的公司沒有什麼不同，它們會在市場上上下波動，我想說的是，增加盈利能力的另一件事是，我們在開頭的評論中提到，我我認為在過去的幾年裡我們已經很好地確定了我們的成本模型的變化非常快，無論是上升還是下降。

And we've done a very good job of staying ahead of demand when it goes up and being able to take out costs faster than many when volume goes down. And I think the flexibility of that cost model is in play here, and that's what you're seeing.

我們做得非常好，在需求上升時保持領先於需求，並且在銷售下降時能夠比許多人更快地降低成本。我認為該成本模型的靈活性在這裡發揮了作用，這就是您所看到的。

We'd like to hit definitely showing up.

我們希望一定能出現。

And then maybe one final one just on on. This is more modeling, but on a penetration, SG&A was a little bit higher. Was there any one-time items in that.

也許最後一場比賽即將上演。這更多的是建模，但從滲透率來看，SG&A 略高一些。裡面有一次性物品嗎？

Maybe that just so.

也許正是如此。

I mean, net-net come into the top of my head. I'll look into it more and take it offline.

我的意思是，網路進入了我的腦海。我會進一步研究並使其離線。

Perfect.

完美的。

Sounds good. Appreciate the time guys.

聽起來不錯。珍惜時間，夥計們。

Thanks.

謝謝。

Thank you.

謝謝。

Thank you. I'm not showing any further questions in the queue. I would now like to turn the call back over to George Wilson for any closing remarks.

謝謝。我不會在隊列中顯示任何其他問題。現在我想將電話轉回給喬治·威爾遜，讓其發表結束語。

Thanks, for joining today, and we really appreciate your time, and we look forward to providing an update on our next earnings call in May. Thank you.

感謝您今天加入，我們非常感謝您抽出寶貴的時間，我們期待在五月的下一次財報電話會議上提供最新資訊。謝謝。

Thank you for participating in today's conference. This does conclude the program. You may now disconnect, and everyone have a great day.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連接，祝大家有個愉快的一天。