Quanex Building Products reported Q1 2024 net sales of $239.2 million, down 8.7% year over year, as demand softened and pricing dynamics shifted, particularly in the North American cabinet components segment. The company nevertheless delivered margin expansion on a consolidated basis (adjusted EBITDA margin ~8.4%) driven by lower raw material costs, reduced stock-based compensation, and lower interest expense, offsetting a higher operating expense cadence and continued volume headwinds. Net income rose to $6.2 million ($0.19 per share) on a reported basis, and management reiterated confidence in the medium-term demand backdrop, citing improving North American housing activity and the potential for March/late-year recovery in R&R demand tied to lower interest rates.
Management guided for the full year 2024 with net sales around $1.1 billion and adjusted EBITDA of $145–$150 million, with FCF guidance of $85–$90 million. This implies incremental margin improvement through the year as volume gains and operating leverage materialize, though the second quarter is expected to reflect continued pressures from a seasonally weaker backdrop and some pricing headwinds, especially in Europe. Quanex also highlighted its strong balance sheet (net debt to LTM adjusted EBITDA of 0.1x) and ongoing capital allocation priority toward deleveraging, organic/inorganic growth, and select shareholder-friendly actions. The quarter’s performance underscores the company’s resilience in a cyclical end-market while maintaining a disciplined approach to cost control and portfolio diversification via non-fenestration segments and the LMI/QCM expansion.