Quanex Building Products Corporation Fiscal 2011 First Quarter Results

Loss from Continuing Operations of $0.13 per Diluted Share

Loss Included $0.09 per Diluted Share of Special Items

Engineered Products Sales up 15% - Outperformed the End Market

Previously Announced Agreement to Acquire Edgetech I.G.

Repurchased $1.5 million of Common Stock at Average Cost of $17.36 per
Share

HOUSTON, Feb. 24, 2011 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation
(NYSE:NX) today released fiscal 2011 first quarter results for the period ending
January 31, 2011. Combined segment revenue and combined segment operating loss
at the company's two businesses -- Engineered Products and Aluminum Sheet
Products -- were $159.8 million and $0.1 million, respectively. Revenue was up
compared to the year ago quarter due to the addition of new customers, new
products, and customers building inventory to meet pre-buying demand ahead of
the December 31, 2010, expiration of the $1,500 energy efficient window tax
credit. Operating income was down due to costs associated with rationalizing
operations, higher raw material costs and warranty expenses at Engineered
Products, and lower shipped pounds at Aluminum Sheet Products.

First Quarter Highlights

-- On January 31, 2011, an agreement was announced to acquire Edgetech, a
technological leader in insulating glass spacer products for residential
and commercial windows.
-- Consolidated segment revenue was $159.8 million compared to $151.4
million a year ago. Engineered Products revenue was $84.0 million
compared to $72.8 million a year ago; Aluminum Sheet Products revenue
was $79.1 million compared to $81.6 million a year ago.
-- Consolidated segment operating loss was $0.1 million compared to income
of $7.7 million a year ago. Engineered Products operating loss was $0.6
million compared to income of $4.1 million a year ago, and included
expenses of $5.2 million related to the consolidation and closing of
facilities (completed in Q1) and an increase in warranty accruals.
Aluminum Sheet Products operating income was $0.6 million, down from
$3.6 million a year ago due to lower shipped pounds.
-- Loss from continuing operations before income taxes was $7.7 million
compared to income of $1.8 million a year ago. The loss included $1.1
million of transaction costs associated with the pending acquisition of
Edgetech I.G.
-- Loss from continuing operations was $4.7 million compared to income of
$1.1 million a year ago.
-- Diluted loss per share from continuing operations was $0.13, which
included $0.09 of special items, compared to income per share of $0.03 a
year ago.

Segment Commentary

Engineered Products is focused on providing OEM window and door customers with
value-added fenestration components, products, and systems. Key markets are
residential remodeling activity (approx. 60% of sales) and housing starts
(approx. 40% of sales).

Engineered Products results (in millions)

1st qtr 2011 1st qtr
2010
-----------------
-----------------
Net sales $84.0 $72.8

Operating income ($0.6) $4.1

"We believe the segment outperformed the end market as our sales were up 15%
over the year ago quarter, while Ducker Worldwide data indicated U.S.
residential window shipments were down 5%," said David D. Petratis, president
and chief executive officer of Quanex Building Products. "The higher sales
reflect the continuing progress we are making with our sales initiatives with
large and regional window and door customers. I am very pleased with the
traction we are gaining with our sales programs and new products, and I look
forward to the day when we see real improvement in our end markets."

"An operating loss of $0.6 million was disappointing, but not totally
unexpected. Raw material costs were up; labor expense was temporarily up as we
used overtime to meet a hike in orders in November and December; additionally,
we had costs associated with rationalizing facilities, increased warranty costs,
and higher sales and marketing costs associated with our organic growth
initiatives," continued Petratis. "While many of these expenses were planned,
having them hit in the first quarter, when our segment income is generally at
its lowest point of the year, has a big impact. We expect to see higher second
quarter operating income now that the bulk of these expenses are behind us."

"The company announced on January 31st it intends to purchase Edgetech I.G. in a
$107 million cash deal. Acquiring Edgetech is subject to regulatory approval and
we are confident the deal will close. Edgetech is a well run organization with
an impressive track record of growth over the last several years, despite a
slowdown in the end markets. They are a technological leader in spacer products
with a strong presence in Europe, a market that Quanex is looking to penetrate,"
said Petratis. "We will have more details to share once the acquisition is
closed."

Aluminum Sheet Products is a leading provider of common alloy aluminum sheet
through its Nichols Aluminum operation and its products are used in the home
construction and remodeling markets (approx. 70% of sales) and transportation
market (approx. 20% of sales).

Aluminum Sheet Products results (in millions)

1st qtr 1st qtr
2011 2010
---------- ----------
Net sales $79.1 $81.6
Operating income $0.6 $3.6
Shipped pounds 52 61

"The Aluminum Association reported aluminum shipments in the first quarter were
up 10% from a year ago. Our first quarter shipments were 52 million pounds, down
15% from the year ago quarter. Part of our underperformance can be attributed to
relatively weak building and construction demand in the quarter, where we have a
sizable presence, compared to relatively strong distribution and transportation
demand, where we have a relatively small presence. You may also recall this time
last year our customers were aggressively restocking to meet pre-buying demand
ahead of the expiration of the $8,000 first time home buyers tax credit. This
quarter they were destocking. We also had maintenance outages in the quarter,
some of which were deferred from last year because of strong demand throughout
much of 2010 and we wanted to give our customers uninterrupted service during
that time," said Petratis. "Our sales in the quarter were $79 million, down 3%
over the year ago quarter due to lower shipped pounds that were partially offset
by higher aluminum prices."

"The aluminum spread (sales less material costs) was up 9% from a year ago, and
up 11% over the sequential fourth quarter due to rising aluminum prices.
Operating income was down from year ago results primarily due to the lower
shipped pounds. The outlook for aluminum sheet demand in the second quarter
looks much better than the first quarter as the traditional spring building
season starts to kick-in, and therefore, we are expecting an increase in shipped
pounds and higher operating income compared to the first quarter."

Cash Position

"We had a cash balance of $182 million and our total debt outstanding stood at
$1.9 million at the end of the first quarter," Petratis continued. "The company
will use $107 million of cash to acquire Edgetech I.G. Cash provided by
operating activities from continuing operations in the quarter was $0.7 million.
Our $270 million revolving credit facility remained untapped, but due to the
facility's covenant requirements, the available balance at quarter end was
$178.9 million. Future uses of cash could be to fund organic growth activities,
fund the common stock dividend, make acquisitions, and repurchase outstanding
shares. During the quarter, we repurchased $1.5 million of our common stock at
an average price of $17.36 per share."

2011 Business Outlook

"Our financial guidance for 2011 remains unchanged even after taking into
account the costs recognized in the first quarter. We continue to believe that
residential repair & remodeling activity and housing starts will be lackluster
in 2011. The spike in demand we saw in November and December was associated with
the expiration of the tax credit for energy efficient windows, and was followed
by soft demand in January. High foreclosure activity, tight credit markets,
large inventories of homes available for sale and continued high unemployment
leave us with a very challenging business environment in the near term,"
Petratis said. "However, I remain very confident in the long-term health of the
U.S. economy and the building and construction markets where we compete."

"We expect Engineered Products to earn about $35 million of operating income in
2011, essentially flat to 2010. We expect to see slightly higher sales in 2011
compared to 2010 because of ongoing residential repair & remodeling share gains
by our large customers, and to a lesser extent, gains we will make with national
and regional customers through our organic growth initiatives. However, along
with slightly better expected sales, we will see higher operating expenses as we
continue to invest in organic growth," said Petratis.

"At Aluminum Sheet Products, we expect to earn about $25 million of operating
income in 2011, compared to the $30 million we earned in 2010. The $25 million
is based on lower shipped pounds, as we don't expect to see the level of
restocking activity that was present in the first half of 2010 repeated in the
first half of 2011," continued Petratis.

"Guidance for 2011 assumes no LIFO activity and excludes estimated corporate
expenses (before transaction costs) of $26 million. Capital expenditures and
depreciation & amortization are estimated to be $30 million and $29 million,
respectively. Corporate expenses and capital expenditures include $2.5 million
and $9 million, respectively, of costs associated with the launch of our
Enterprise Resource Program, which when completed in 2014, will enhance and
streamline our back office processes, improve data collection and provide a
foundation to support future growth opportunities," concluded Petratis.

Growth Initiatives

Quanex's organic growth programs are focused on the collaboration of its
Engineered Products Group (EPG): Mikron, Truseal and Homeshield. The sales and
marketing teams of EPG work collectively to utilize their combined capabilities
to grow profitable revenue. Activities are focused on an existing customer base
of national window and door companies and regional customer opportunities. EPG
engineers are also working together to develop products and systems that provide
customers with the latest innovations in energy efficiency.

Dividend Declared

The Board of Directors declared a quarterly cash dividend of $0.04 per share on
the company's common stock, payable March 31, 2011, to shareholders of record on
March 15, 2011.

Corporate Profile

Quanex Building Products Corporation is an industry-leading manufacturer of
engineered materials, components and systems serving the U.S. window and door
markets. It is a ROIC-driven company that grows shareholder returns through a
combination of organic growth via new products and new programs, and
acquisitions.

The Quanex Building Products Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=1117

Financial Statistics as of 01/31/11

Book value per common share: $11.61; Total debt to capitalization: 0.4%; Return
on invested capital: 4.2%; Actual number of common shares outstanding:
37,503,325.

Definitions

Book value per common share -- calculated as total stockholders' equity as of
balance sheet date divided by actual number of common shares outstanding;

Total debt to capitalization -- calculated as the sum of both the current and
long-term portion of debt, as of balance sheet date, divided by the sum of both
the current and long-term portion of debt plus total stockholders' equity as of
balance sheet date;

Return on invested capital -- calculated as the total of the prior 12 months net
income plus prior 12 months after-tax interest expense and capitalized interest,
the sum of which is divided by the trailing five quarters average total debt
(current and long term) and total stockholders' equity.

Statements that use the words "expect," "could," "should," "believe," "will,"
"might," or similar words reflecting future expectations or beliefs are
forward-looking statements. The statements in this release are based on current
expectations. Actual results or events may differ materially from this release.
Factors that could impact future results may include, without limitation, the
effect of both domestic and global economic conditions, the impact of
competitive products and pricing, and the availability and cost of raw
materials. For a more complete discussion of factors that may affect the
company's future performance, please refer to the company's 10-K filing on
December 20, 2010, under the Securities Exchange Act of 1934, in particular the
section titled, "Private Securities Litigation Reform Act" contained therein.

For additional information, visit the company's website at www.quanex.com

QUANEX BUILDING PRODUCTS CORPORATION
INDUSTRY SEGMENT INFORMATION
(In thousands)
(Unaudited)

Three months ended

January 31,
-----------------------

2011 2010
----------- ----------
Net Sales:
Engineered Products $ 84,010 $ 72,809

Aluminum Sheet Products 79,139 81,563
----------- ----------
Building Products 163,149 154,372

Eliminations (3,341) (2,950)
----------- ----------

Net Sales $ 159,808 $ 151,422
=========== ==========

Operating Income (Loss):
Engineered Products $ (649) $ 4,077

Aluminum Sheet Products 551 3,634
----------- ----------
Building Products (98) 7,711

Corporate and Other (7,568) (5,864)
----------- ----------

Operating Income
(Loss) $ (7,666) $ 1,847
=========== ==========

QUANEX BUILDING PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

Three months ended

January 31,
-----------------------

2011 2010
----------- ----------

Net sales $ 159,808 $ 151,422
Cost of sales (exclusive of items shown
separately below) 139,655 126,134
Selling, general and administrative 20,294 16,107

Depreciation and amortization 7,525 7,334
----------- ----------
Operating income (loss) (7,666) 1,847
Interest expense (121) (124)

Other, net 100 78
----------- ----------
Income (loss) from continuing
operations before income taxes (7,687) 1,801

Income tax benefit (expense) 2,959 (718)
----------- ----------
Income (loss) from continuing
operations (4,728) 1,083
Income (loss) from discontinued
operations, net of taxes (12) (889)
----------- ----------

Net income (loss) $ (4,740) $ 194
=========== ==========

Basic earnings per common share:
Earnings (loss) from continuing
operations $ (0.13) $ 0.03
Income (loss) from discontinued
operations $ -- $ (0.02)
----------- ----------

Basic earnings (loss) per share $ (0.13) $ 0.01
----------- ----------

Diluted earnings per common share:
Earnings (loss) from continuing
operations $ (0.13) $ 0.03
Income (loss) from discontinued
operations $ -- $ (0.02)
----------- ----------

Diluted earnings (loss) per share $ (0.13) $ 0.01
----------- ----------

Weighted average common shares
outstanding:
Basic 37,092 37,340
Diluted 37,092 37,797

QUANEX BUILDING PRODUCTS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

January 31, October 31,

2011 2010
----------- --------------------------- -----------
Assets
$ 182,466 Cash and equivalents $ 187,178
49,388 Accounts receivable, net 87,007
56,097 Inventories 45,200
14,406 Deferred income taxes 10,547
Prepaid and other current
8,170 assets 8,229

Current assets of
-- discontinued operations 462
----------- --------------------------- -----------
310,527 Total current assets 338,623
Property, plant and
134,452 equipment, net 135,517
29,754 Deferred income taxes 30,563
25,189 Goodwill 25,189
43,897 Intangible assets, net 44,668

16,793 Other assets 16,690
----------- --------------------------- -----------

$ 560,612 Total assets $ 591,250
=========== =========================== ===========
Liabilities and
stockholders' equity
$ 53,424 Accounts payable $ 70,986
30,673 Accrued liabilities 43,447
Current maturities of
327 long-term debt 327

Current liabilities of
-- discontinued operations 30
----------- --------------------------- -----------
84,424 Total current liabilities 114,790
1,601 Long-term debt 1,616
Deferred pension and
3,934 postretirement benefits 3,667
Non-current environmental
12,027 reserves 12,027

23,150 Other liabilities 17,718
----------- --------------------------- -----------
125,136 Total liabilities 149,818

435,476 Total stockholders' equity 441,432
----------- --------------------------- -----------

Total liabilities and
$ 560,612 stockholders' equity $ 591,250
=========== =========================== ===========

QUANEX BUILDING PRODUCTS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)

Three months ended
January 31,
-----------------------

2011 2010
----------- ----------
Operating activities:
Net income (loss) $ (4,740) $ 194
(Income) loss from discontinued operations 12 889

Adjustments to reconcile net income (loss) to
cash provided by operating activities from
continuing operations:
Depreciation and amortization 7,542 7,352
Deferred income taxes (3,197) 654
Stock-based compensation 1,291 1,097

Changes in assets and liabilities, net of
effects from acquisitions and dispositions:
Decrease (increase) in accounts receivable 37,513 24,262
Decrease (increase) in inventory (10,889) (2,200)
Decrease (increase) in other current assets (598) 257
Increase (decrease) in accounts payable (19,164) (18,382)
Increase (decrease) in accrued liabilities (9,903) (5,929)
Increase (decrease) in income taxes payable 191 23
Increase (decrease) in deferred pension and
postretirement benefits 268 721

Other, net 2,356 23
----------- ----------
Cash provided by (used for) operating
activities from continuing operations 682 8,961
Cash provided by (used for) operating
activities from discontinued operations (68) (202)
----------- ----------
Cash provided by (used for) operating
activities 614 8,759
----------- ----------
Investing activities:
Capital expenditures, net of retirements (4,124) (3,727)
Proceeds from executive life insurance 683 --

Other, net 74 --
----------- ----------
Cash provided by (used for) investing
activities from continuing operations (3,367) (3,727)
Cash provided by (used for) investing
activities from discontinued operations -- --
----------- ----------
Cash provided by (used for) investing
activities (3,367) (3,727)
----------- ----------
Financing activities:
Repayments of long-term debt (15) (14)
Common stock dividends paid (1,501) (1,132)
Issuance of common stock from stock option
exercises, including related tax benefits 579 26
Purchase of treasury stock (1,504) --

Other, net 392 (201)
----------- ----------
Cash provided by (used for) financing
activities from continuing operations (2,049) (1,321)
Cash provided by (used for) financing
activities from discontinued operations (392) 201
----------- ----------
Cash provided by (used for) financing
activities (2,441) (1,120)
----------- ----------
Effect of exchange rate changes on cash and
equivalents 22 8
LESS: (Increase) decrease in cash and
equivalents from discontinued operations 460 1
----------- ----------
Increase (decrease) in cash and equivalents
from continuing operations (4,712) 3,921

Cash and equivalents at beginning of period 187,178 123,499
----------- ----------

Cash and equivalents at end of period $ 182,466 $ 127,420
=========== ==========

CONTACT: Financial Contact: Jeff Galow, 713-877-5327
Media Contact: Valerie Calvert, 713-877-5305