Record Quarter for Earnings
Margin Expansion Across All Operating Segments
Repaid $25 Million in Bank Debt
Balance Sheet and Liquidity Remain Strong
Solid Improvement in Cash Provided by Operating Activities
HOUSTON, Aug. 31, 2023 (GLOBE NEWSWIRE) -- Quanex Building Products Corporation (:NX) (“Quanex” or the “Company”) today announced its results for the three months ended July 31, 2023.
The Company reported the following selected financial results:
| Three Months Ended July 31, | Nine Months Ended July 31, | ||||||
| ($ in millions, except per share data) | 2023 | 2022 | 2023 | 2022 | |||
| Net Sales | $299.6 | $324.0 | $835.1 | $914.0 | |||
| Gross Margin | $78.6 | $72.6 | $197.5 | $201.0 | |||
| Gross Margin % | 26.2% | 22.4% | 23.7% | 22.0% | |||
| Net Income | $31.7 | $25.9 | $55.1 | $63.7 | |||
| Diluted EPS | $0.96 | $0.78 | $1.67 | $1.91 | |||
| Adjusted Net Income | $31.9 | $26.2 | $59.7 | $64.0 | |||
| Adjusted Diluted EPS | $0.97 | $0.79 | $1.81 | $1.92 | |||
| Adjusted EBITDA | $48.5 | $44.2 | $108.8 | $113.8 | |||
| Adjusted EBITDA Margin % | 16.2% | 13.6% | 13.0% | 12.5% | |||
| Cash Provided by Operating Activities | $64.1 | $51.7 | $102.6 | $49.9 | |||
| Free Cash Flow | $56.7 | $46.0 | $80.1 | $30.4 | |||
(See Non-GAAP Terminology Definitions and Disclaimers section, Non-GAAP Financial Measure Disclosure table, Selected Segment Data table and reconciliation tables for additional information)
George Wilson, President and Chief Executive Officer, stated, “The results we reported for the three months ended July 31, 2023 were a record for Quanex from both an earnings and margin perspective. Demand continued to improve across all product lines during the third quarter of this year compared to the first half of the year. In addition, we believe the customer inventory rebalancing that impacted results in our fenestration segments in the first half have subsided and did not affect third quarter results.
“When compared to the third quarter of 2022, revenue declined in the third quarter of 2023 across all operating segments as ongoing macroeconomic challenges led to market volume declines and some pricing pressure, mostly due to surcharge rollbacks and index pricing decreases in North America as raw material costs declined. Despite this pressure on the topline, we converted well and realized margin expansion across all operating segments. Our continued focus on operational efficiency proved beneficial and our ability to flex our cost structure to meet demand trends across product lines also helped improve our profitability during the quarter.
“We continue to do a good job of managing working capital and generating cash, which enabled us to pay down our bank debt by $25 million during the third quarter. In fact, we are currently on track to generate record free cash flow this year. In addition, our balance sheet remains strong, and our leverage ratio improved compared to the second quarter of this year.” (See Non-GAAP Terminology Definitions and Disclaimers section for additional information)
Third Quarter 2023 Results Summary
The Company reported net sales of $299.6 million during the three months ended July 31, 2023, which represents a decrease of 7.5% compared to $324.0 million for the same period of 2022. The decrease was mostly attributable to softer market demand and lower pricing in North America. Quanex realized a decline in net sales of 4.1% for the third quarter of 2023 in its North American Fenestration segment. Excluding the contribution from the LMI Custom Mixing assets we acquired on November 1, 2022, net sales in the North American Fenestration segment would have declined by 14.9% year-over-year. The Company reported a decline in net sales of 23.6% in its North American Cabinet Components segment and a decrease of 2.8% in net sales in its European Fenestration segment, excluding foreign exchange impact. (See Sales Analysis table for additional information)
The increase in earnings for the three months ended July 31, 2023 was largely attributable to operational efficiency gains, cost control and a decrease in income tax expense. As such, Quanex was able to realize margin expansion in each of its operating segments and on a consolidated basis.
Balance Sheet Update
As of July 31, 2023, Quanex had total debt of $110.8 million ($57.9 million excluding real-estate leases that are considered “finance” leases under U.S. GAAP) and the Company’s leverage ratio of Net Debt to LTM Adjusted EBITDA decreased to 0.3x (Net Debt free excluding these real-estate leases). As of July 31, 2023, Quanex’s LTM Adjusted EBITDA was $147.5 million and LTM Net Income, the most directly comparable GAAP measure, was $79.8 million. (See Non-GAAP Terminology Definitions and Disclaimers section, Net Debt Reconciliation table and Last Twelve Months Adjusted EBITDA Reconciliation table for additional information)
Outlook
Mr. Wilson commented, “We were cautiously optimistic heading into the second half of our fiscal year based on our belief that we were seeing a return to normal seasonality. Our third quarter results reinforced that belief. Based on our results year-to-date, combined with our operational execution, recent demand trends and conversations with our customers, we are updating our guidance for fiscal 2023. On a consolidated basis for fiscal 2023, we currently estimate that we will generate net sales of approximately $1.125 billion, which is towards the lower end of prior guidance as indicated on our last earnings call; however, we are increasing our Adjusted EBITDA* guidance to $150 million to $155 million.
Our capital allocation priorities continue to be generating cash, paying down debt, evaluating growth opportunities and opportunistically buying back our stock.”
*When Quanex provides expectations for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measures is generally not available without unreasonable effort. Certain items required for such a reconciliation are outside of the Company’s control and/or cannot be reasonably predicted or estimated, such as the provision for income taxes.
Conference Call and Webcast Information
The Company has also scheduled a conference call for Friday, September 1, 2023 at 11:00 a.m. ET (10:00 a.m. CT) to discuss the release. A link to the live audio webcast will be available on Quanex’s website at http://www.quanex.com in the Investors section under Presentations & Events.
Participants can pre-register for the conference call using the following link: https://register.vevent.com/register/BI9e428e0cc86a46139a82d87ee6276d56
Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, it is recommended that participants dial into the conference call ten minutes ahead of the scheduled start time. A replay will be available for a limited time on the Company’s website at http://www.quanex.com in the Investors section under Presentations & Events.
About Quanex
Quanex is a global manufacturer with core capabilities and broad applications across various end markets. The Company currently collaborates and partners with leading OEMs to provide innovative solutions in the window, door, vinyl fencing, solar, refrigeration and cabinetry markets. Looking ahead, Quanex plans to leverage its material science expertise and process engineering to expand into adjacent markets.
For more information contact Scott Zuehlke, Senior Vice President, Chief Financial Officer & Treasurer, at 713-877-5327 or [email protected].
Non-GAAP Terminology Definitions and Disclaimers
Adjusted Net Income (defined as net income further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges, asset impairment charges, other net adjustments related to foreign currency transaction gain/loss and effective tax rates reflecting impacts of adjustments on a with and without basis) and Adjusted EPS are non-GAAP financial measures that Quanex believes provide a consistent basis for comparison between periods and more accurately reflects operational performance, as they are not influenced by certain income or expense items not affecting ongoing operations. EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net) and Adjusted EBITDA (defined as EBITDA further adjusted to exclude purchase price accounting inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of certain fixed assets, restructuring charges and asset impairment charges) are non-GAAP financial measures that the Company uses to measure operational performance and assist with financial decision-making. Net Debt is defined as total debt (outstanding balance on the revolving credit facility plus financial lease obligations) less cash and cash equivalents. The leverage ratio of Net Debt to LTM Adjusted EBITDA is a financial measure that the Company believes is useful to investors and financial analysts in evaluating Quanex’s leverage. In addition, with certain limited adjustments, this leverage ratio is the basis for a key covenant in the Company’s credit agreement. Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures. Quanex uses the Free Cash Flow metric to measure operational and cash management performance and assist with financial decision-making. Free Cash Flow is measured before application of certain contractual commitments (including capital lease obligations), and accordingly is not a true measure of the Company’s residual cash flow available for discretionary expenditures. Quanex believes Free Cash Flow is useful to investors in understanding and evaluating the Company’s financial and cash management performance. Quanex believes that the presented non-GAAP measures provide a consistent basis for comparison between periods and will assist investors in understanding the Company’s financial performance when comparing results to other investment opportunities. The presented non-GAAP measures may not be the same as those used by other companies. Quanex does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with U.S. GAAP.
Forward Looking Statements
Statements that use the words “estimated,” “expect,” “could,” “should,” “believe,” “will,” “might,” or similar words reflecting future expectations or beliefs are forward-looking statements. The forward-looking statements include, but are not limited to, the following: impacts from public health issues (including pandemics, such as the recent COVID-19 pandemic) on the economy and the demand for Quanex’s products, the Company’s future operating results, future financial condition, future uses of cash and other expenditures, expenses and tax rates, expectations relating to Quanex’s industry, and the Company’s future growth, including any guidance discussed in this press release. The statements and guidance set forth in this release are based on current expectations. Actual results or events may differ materially from this release. For a complete discussion of factors that may affect Quanex’s future performance, please refer to the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2022, and the Company’s Quarterly Reports on Form 10-Q under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors”. Any forward-looking statements in this press release are made as of the date hereof, and Quanex undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(In thousands, except per share data)
(Unaudited) Three Months Ended July 31, Nine Months Ended July 31, 2023 2022 2023 2022 Net sales $299,640 $324,037 $835,091 $913,970 Cost of sales 221,065 251,446 637,586 712,931 Selling, general and administrative 30,516 28,822 94,631 87,774 Depreciation and amortization 10,596 9,734 31,672 30,554 Operating income 37,463 34,035 71,202 82,711 Interest expense (2,068) (724) (6,571) (1,849)Other, net 402 398 591 905 Income before income taxes 35,797 33,709 65,222 81,767 Income tax expense (4,099) (7,801) (10,103) (18,098)Net income $31,698 $25,908 $55,119 $63,669 Earnings per common share, basic $0.97 $0.79 $1.68 $1.92 Earnings per common share, diluted $0.96 $0.78 $1.67 $1.91 Weighted average common shares outstanding: Basic 32,716 32,999 32,841 33,093 Diluted 32,919 33,173 33,031 33,256 Cash dividends per share $0.08 $0.08 $0.24 $0.24
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited) July 31, 2023 October 31, 2022ASSETS Current assets: Cash and cash equivalents $73,252 $55,093 Accounts receivable, net 96,204 96,018 Inventories, net 105,368 120,890 Prepaid and other current assets 12,764 8,664 Total current assets 287,588 280,665 Property, plant and equipment, net 245,912 180,400 Operating lease right-of-use assets 45,804 56,000 Goodwill 186,409 137,855 Intangible assets, net 78,617 65,035 Other assets 3,479 4,662 Total assets $847,809 $724,617 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $71,464 $77,907 Accrued liabilities 54,237 52,114 Income taxes payable - 1,049 Current maturities of long-term debt 2,278 1,046 Current operating lease liabilities 7,388 7,727 Total current liabilities 135,367 139,843 Long-term debt 107,234 29,628 Noncurrent operating lease liabilities 39,291 49,286 Deferred pension benefits - 3,917 Deferred income taxes 23,741 22,277 Other liabilities 16,221 14,831 Total liabilities 321,854 259,782 Stockholders’ equity: Common stock 372 372 Additional paid-in-capital 250,882 251,947 Retained earnings 384,623 337,456 Accumulated other comprehensive loss (31,890) (49,422)Treasury stock at cost (78,032) (75,518)Total stockholders’ equity 525,955 464,835 Total liabilities and stockholders' equity $847,809 $724,617
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited) Nine Months Ended July 31, 2023 2022Operating activities: Net income$55,119 $63,669 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 31,672 30,554 Loss on the disposition of capital assets Stock-based compensation 1,828 1,707 Deferred income tax 177 505 Other, net 2,423 2,647 Changes in assets and liabilities: Decrease (increase) in accounts receivable 9,918 (5,306)Decrease (increase) in inventory 23,864 (48,280)Increase in other current assets (439) (824)(Decrease) increase in accounts payable (15,471) 2,765 Decrease in accrued liabilities (5,152) (4,721)(Decrease) increase in income taxes payable (3,534) 7,522 Increase (decrease) in deferred pension benefits 22 (239)Increase in other long-term liabilities 609 32 Other, net 1,523 (177)Cash provided by operating activities 102,559 49,854 Investing activities: Business acquisition (91,302) - Capital expenditures (22,450) (19,488)Proceeds from disposition of capital assets 183 134 Cash used for investing activities (113,569) (19,354)Financing activities: Borrowings under credit facilities 102,000 70,500 Repayments of credit facility borrowings (60,000) (70,500)Debt issuance costs - (1,210)Repayments of other long-term debt (1,954) (1,301)Common stock dividends paid (7,952) (7,916)Issuance of common stock 753 502 Payroll tax paid to settle shares forfeited upon vesting of stock (567) (1,412)Purchase of treasury stock (5,593) (6,600)Cash provided by (used for) financing activities 26,687 (17,937)Effect of exchange rate changes on cash and cash equivalents 2,482 (2,594)Decrease in cash and cash equivalents 18,159 9,969 Cash and cash equivalents at beginning of period 55,093 40,061 Cash and cash equivalents at end of period$73,252 $50,030
FREE CASH FLOW AND NET DEBT RECONCILIATION
(In thousands)
(Unaudited) The following table reconciles the Company's calculation of Free Cash Flow, a non-GAAP measure, to its most directly comparable GAAP measure. The Company defines Free Cash Flow as cash provided by operating activities less capital expenditures. Three Months Ended July 31, Nine Months Ended July 31, 2023 2022 2023 2022Cash provided by operating activities$64,099 $51,735 $102,559 $49,854Capital expenditures(7,376) (5,703) (22,450) (19,488)Free Cash Flow$56,723 $46,032 $80,109 $30,366 The following table reconciles the Company's Net Debt which is defined as total debt principal of the Company plus finance lease obligations minus cash. As of July 31, 2023 2022 Revolving credit facility$55,000 $38,000 Finance lease obligations(1)55,792 20,105 Total debt(2)110,792 58,105 Less: Cash and cash equivalents73,252 50,030 Net Debt$37,540 $8,075 (1) Includes $52.9 million and $18.8 million in real estate lease liabilities considered finance leases under U.S. GAAP as of July 31, 2023 and July 31, 2022, respectively.(2) Excludes outstanding letters of credit.
NON-GAAP FINANCIAL MEASURE DISCLOSURE
LAST TWELVE MONTHS ADJUSTED EBITDA RECONCILIATION
(In thousands, except per share data)
(Unaudited) Reconciliation of Last Twelve Months Adjusted EBITDA Three Months Ended July 31, 2023 Three Months Ended April 30, 2023 Three Months Ended January 31, 2023 Three Months Ended October 31, 2022 Total Reconciliation Reconciliation Reconciliation Reconciliation ReconciliationNet income as reported $31,698 $21,512 $1,909 $24,667 $79,786 Income tax expense 4,099 5,551 453 3,329 13,432 Other, net (402) 29 (218) (136) (727)Interest expense 2,068 2,244 2,259 710 7,281 Depreciation and amortization 10,596 10,456 10,620 9,555 41,227 EBITDA 48,059 39,792 15,023 38,125 140,999 Cost of sales(1) - 48 - - 48 Selling, general and administrative(1),(2) 395 63 5,448 564 6,470 Adjusted EBITDA $48,454 $39,903 $20,471 $38,689 $147,517 (1) Loss on damage to manufacturing facilities caused by weather.(2) Transaction and advisory fees.
NON-GAAP FINANCIAL MEASURE DISCLOSURE
(In thousands, except per share data)
(Unaudited) Reconciliation of Adjusted Net Income and Adjusted EPS Three Months Ended
July 31, 2023
Three Months Ended
July 31, 2022
Nine Months Ended
July 31, 2023
Nine Months Ended
July 31, 2022
Net Income
Diluted EPS
Net Income
Diluted EPS
Net Income
Diluted EPS
Net Income
Diluted EPS
Net income as reported $ 31,698 $ 0.96 $ 25,908 $ 0.78 $ 55,119 $ 1.67 $ 63,669 $ 1.91 Net income reconciling items from below 201 $ 0.01 257 $ 0.01 4,550 $ 0.14 291 $ 0.01 Adjusted net income and adjusted EPS $ 31,899 $ 0.97 $ 26,165 $ 0.79 $ 59,669 $ 1.81 $ 63,960 $ 1.92 Reconciliation of Adjusted EBITDA Three Months Ended
July 31, 2023
Three Months Ended
July 31, 2022
Nine Months Ended
July 31, 2023
Nine Months Ended
July 31, 2022
Reconciliation
Reconciliation
Reconciliation
Reconciliation
Net income as reported $ 31,698 $ 25,908 $ 55,119 $ 63,669 Income tax expense 4,099 7,801 10,103 18,098 Other, net (402) (398) (591) (905) Interest expense 2,068 724 6,571 1,849 Depreciation and amortization 10,596 9,734 31,672 30,554 EBITDA 48,059 43,769 102,874 113,265 EBITDA reconciling items from below 395 419 5,954 550 Adjusted EBITDA $ 48,454 $ 44,188 $ 108,828 $ 113,815 Reconciling Items Three Months Ended
July 31, 2023
Three Months Ended
July 31, 2022
Nine Months Ended
July 31, 2023
Nine Months Ended
July 31, 2022
Income Statement
Reconciling Items
Income Statement
Reconciling Items
Income Statement
Reconciling Items
Income Statement
Reconciling Items
Net sales $ 299,640 $- $ 324,037 $- $ 835,091 $- $ 913,970 $- Cost of sales 221,065 - 251,446 - 637,586 (48)(1)712,931 - Selling, general and administrative 30,516 (395)(2)28,822 (419)(2)94,631 (5,906) (1),(2)87,774 (550)(2)EBITDA 48,059 395 43,769 419 102,874 5,954 113,265 550 Depreciation and amortization 10,596 - 9,734 - 31,672 - 30,554 - Operating income 37,463 395 34,035 419 71,202 5,954 82,711 550 Interest expense (2,068) - (724) - (6,571) - (1,849) - Other, net 402 (126) (3)398 (82) (3)591 (36) (3)905 (164) (3)Income before income taxes 35,797 269 33,709 337 65,222 5,918 81,767 386 Income tax expense (4,099) (68) (4)(7,801) (80) (4)(10,103) (1,368) (4)(18,098) (95) (4)Net income $ 31,698 $ 201 $ 25,908 $ 257 $ 55,119 $ 4,550 $ 63,669 $ 291 Diluted earnings per share $ 0.96 $ 0.78 $ 1.67 $ 1.91 (1) Loss on damage to manufacturing facilities caused by weather.(2) Transaction and advisory fees.(3) Foreign currency transaction gains.(4)Tax impact of net income reconciling items.
SELECTED SEGMENT DATA
(In thousands)
(Unaudited) This table provides gross margin, operating (loss) income, EBITDA, and Adjusted EBITDA by reportable segment. Non-operating expense and income tax expense are not allocated to the reportable segments. NA Fenestration EU Fenestration NA Cabinet Components Unallocated Corp & Other TotalThree months ended July 31, 2023 Net sales $177,081 $67,889 $55,385 $(715) $299,640 Cost of sales 135,126 41,266 44,935 (262) 221,065 Gross Margin 41,955 26,623 10,450 (453) 78,575 Gross Margin % 23.7% 39.2% 18.9% 26.2%Selling, general and administrative 14,254 8,039 5,095 3,128 30,516 Depreciation and amortization 5,033 2,434 3,084 45 10,596 Operating income (loss) 22,668 16,150 2,271 (3,626) 37,463 Depreciation and amortization 5,033 2,434 3,084 45 10,596 EBITDA 27,701 18,584 5,355 (3,581) 48,059 Transaction and advisory fees - - - 395 395 Adjusted EBITDA $27,701 $18,584 $5,355 $(3,186) $48,454 Adjusted EBITDA Margin % 15.6% 27.4% 9.7% 16.2% Three months ended July 31, 2022 Net sales $184,744 $67,613 $72,480 $(800) $324,037 Cost of sales 142,970 47,212 61,543 (279) 251,446 Gross Margin 41,774 20,401 10,937 (521) 72,591 Gross Margin % 22.6% 30.2% 15.1% 22.4%Selling, general and administrative 14,644 8,256 5,335 587 28,822 Depreciation and amortization 4,044 2,327 3,273 90 9,734 Operating income (loss) 23,086 9,818 2,329 (1,198) 34,035 Depreciation and amortization 4,044 2,327 3,273 90 9,734 EBITDA 27,130 12,145 5,602 (1,108) 43,769 Transaction and advisory fees - - - 419 419 Adjusted EBITDA $27,130 $12,145 $5,602 $(689) $44,188 Adjusted EBITDA Margin % 14.7% 18.0% 7.7% 13.6% Nine months ended July 31, 2023 Net sales $487,036 $186,604 $163,577 $(2,126) $835,091 Cost of sales 382,315 119,421 136,722 (872) 637,586 Gross Margin 104,721 67,183 26,855 (1,254) 197,505 Gross Margin % 21.5% 36.0% 16.4% 23.7%Selling, general and administrative 41,707 23,996 15,939 12,989 94,631 Depreciation and amortization 15,328 7,135 8,988 221 31,672 Operating income (loss) 47,686 36,052 1,928 (14,464) 71,202 Depreciation and amortization 15,328 7,135 8,988 221 31,672 EBITDA 63,014 43,187 10,916 (14,243) 102,874 Loss on damage to manufacturing facilities (Cost of sales) 35 - 13 - 48 Loss on damage to manufacturing facilities (SG&A) - - 200 - 200 Transaction and advisory fees - - - 5,706 5,706 Adjusted EBITDA $63,049 $43,187 $11,129 $(8,537) $108,828 Adjusted EBITDA Margin % 12.9% 23.1% 6.8% 13.0% Nine months ended July 31, 2022 Net sales $509,283 $199,954 $207,711 $(2,978) $913,970 Cost of sales 396,505 138,147 179,791 (1,512) 712,931 Gross Margin 112,778 61,807 27,920 (1,466) 201,039 Gross Margin % 22.1% 30.9% 13.4% 22.0%Selling, general and administrative 43,099 24,160 15,823 4,692 87,774 Depreciation and amortization 12,221 7,418 10,653 262 30,554 Operating income (loss) 57,458 30,229 1,444 (6,420) 82,711 Depreciation and amortization 12,221 7,418 10,653 262 30,554 EBITDA 69,679 37,647 12,097 (6,158) 113,265 Transaction and advisory fees - - - 550 550 Adjusted EBITDA $69,679 $37,647 $12,097 $(5,608) $113,815 Adjusted EBITDA Margin % 13.7% 18.8% 5.8% 12.5%
SALES ANALYSIS
(In thousands)
(Unaudited) Three Months Ended July 31, Nine Months Ended July 31, 2023 2022 2023 2022 NA Fenestration:(1) United States - fenestration$138,090 $162,215 $379,613 $447,425 International - fenestration 8,542 10,722 22,019 30,952 United States - non-fenestration 26,423 8,324 73,823 22,117 International - non-fenestration 4,026 3,483 11,581 8,789 $177,081 $184,744 $487,036 $509,283 EU Fenestration:(2) International - fenestration$51,752 $49,041 $142,009 $148,525 International - non-fenestration 16,137 18,572 44,595 51,429 $67,889 $67,613 $186,604 $199,954 NA Cabinet Components: United States - fenestration$4,486 $4,857 $12,613 $13,288 United States - non-fenestration 50,199 66,758 148,774 191,908 International - non-fenestration 700 865 2,190 2,515 $55,385 $72,480 $163,577 $207,711 Unallocated Corporate & Other: Eliminations$(715) $(800) $(2,126) $(2,978) $(715) $(800) $(2,126) $(2,978) Net Sales$299,640 $324,037 $835,091 $913,970 (1) Includes the net sales from the acquisition of LMI of $19.8 million and $54.0 million for the three and nine months ended July 31, 2023, respectively.(2) Reflects an increase of $2.2 million and a reduction of $8.6 million in revenue associated with foreign currency exchange rate impacts for the three and nine months ended July 31, 2023, respectively.
