Revenue during the quarter dropped 8.86 percent to $209.13 million from $229.46 million in the previous year period. Gross margin for the quarter contracted 61 basis points over the previous year period to 22.47 percent. Total expenses were 97.79 percent of quarterly revenues, up from 95.40 percent for the same period last year. That has resulted in a contraction of 239 basis points in operating margin to 2.21 percent.

Operating income for the quarter was $4.62 million, compared with $10.56 million in the previous year period.

However, the adjusted operating income for the quarter stood at $7.84 million compared to $10.43 million in the prior year period. At the same time, adjusted operating margin contracted 80 basis points in the quarter to 3.75 percent from 4.55 percent in the last year period.

Bill Griffiths, chairman, president and chief executive officer, commented, “Second quarter results came in as expected, despite weather related weakness in April. We completed the consolidation of our U.S. vinyl profiles business ahead of schedule and we are pleased with the progress of negotiations held with various cabinet customers related to margin dilutive revenue. In fact, we realized slight margin expansion in the cabinet components segment despite continued excessive overtime costs. We also saw margin expansion in our European engineered components segment. As anticipated, revenues were down year-over-year in our North American engineered components segment, driven by a further $17 million reduction due to the previously disclosed re-sourcing effort by a large vinyl profiles customer. Despite the lower top line, margins remained flat in this segment. The U.S. vinyl profiles business consolidation is behind us, and while still early, we feel we have turned the corner at Woodcraft. As such, we are confident in achieving our second half margin expansion and cash flow expectations and are comfortable with our previously disclosed 2017 guidance.”

The company has spent $25.45 million cash to meet investing activities during the first six months as against cash outgo of $262.39 million in the last year period. It has incurred net capital expenditure of $16.96 million on net basis during the first six months, up 2.87 percent or $0.47 million from year ago period.

The company has spent $1.04 million cash to carry out financing activities during the first six months as against cash inflow of $243.46 million in the last year period.

Cash and cash equivalents stood at $14.51 million as on Apr. 30, 2017, down 49.96 percent or $14.49 million from $29 million on Apr. 30, 2016.

Working capital declines
Quanex Building Products Corporation has witnessed a decline in the working capital over the last year. It stood at $91.35 million as at Apr. 30, 2017, down 23.48 percent or $28.03 million from $119.38 million on Apr. 30, 2016. Current ratio was at 1.89 as on Apr. 30, 2017, down from 2.16 on Apr. 30, 2016.

Cash conversion cycle (CCC) has increased to 31 days for the quarter from 28 days for the last year period. Days sales outstanding were almost stable at 17 days for the quarter, when compared with the last year period.

Days inventory outstanding was almost stable at 25 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went down to 11 days for the quarter from 13 for the same period last year.