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QUANEX ANNOUNCES THIRD QUARTER RESULTS

 HOUSTON, Aug. 26 /PRNewswire/ -- Quanex Corporation (NYSE: NX), today announced third quarter 1993 earnings of $2.7 million or 9 cents per share on net sales of $154 million. For nine months ended fiscal 1993, earnings were $5.1 million or 5 cents per share on net sales of $456 million. Fiscal 1992 third quarter results were net income of $2.2 million or 8 cents per share on net sales of $142 million. Comparable nine month 1992 results were income before cumulative effect of the accounting change for retiree medical benefits of $5.9 million or 38 cents per share on net sales of $415 million.
 Operating income for third quarter 1993 was $7 million compared to $5.7 million for third quarter 1992. The increase in operating income was principally due to improved margins for Quanex's steel tube business and to higher volumes for its hot rolled steel bar business (MacSteel) and cold finished steel bar business (LaSalle Steel). Compared to third quarter 1992, MacSteel operating income increased $884 thousand (20 percent) to $5.3 million and LaSalle Steel operating income increased $602 thousand (54 percent) to $1.7 million. Steel tube operating income for third quarter 1993 was $1.0 million compared to a loss of $745 thousand while the aluminum building products business (Nichols-Homeshield) third quarter 1993 income was $2.1 million compared to $2.3 million for 1992.
 Outlook
 "Prospects for our hot rolled steel bar and cold finished steel bar businesses should remain favorable through the fiscal year. With the announcements of reductions in the domestic production of aluminum ingot, we have experienced some strengthening in aluminum sheet pricing to the benefit of our aluminum building products business," said Robert C. Snyder, president and chief executive officer of Quanex Corporation. "We continue to improve quality at our aluminum mini-mill. We expect that improved quality will allow Nichols-Homeshield to compete in higher value added markets. Looking forward, I expect that fiscal fourth quarter earnings will be the best this year, in accordance with typical seasonal patterns," said Snyder.
 Cash Position
 As of July 31, 1993 Quanex's cash and cash equivalents totaled $94 million. The Company will continue to experience a negative financing cost arbitrage until these monies are invested in the business. "We are currently searching for a business acquisition that will allow Quanex the opportunity for profitable growth. At the same time we continue to have an opportunistic attitude for investing cash balances. In response to unsolicited offers during the third quarter, Quanex purchased 100,000 shares of its common stock at an average price of $14.56," continued Snyder.
 Personnel
 As previously announced, Vernon E. Oechsle joined Quanex on Aug. 1, 1993 as executive vice president and chief operating officer. Mr. Oechsle comes to Quanex from Allied Signal-Automotive in Michigan, where he served as their chief operating officer.
 Dividend Declared
 The Board of Directors declared a regular quarterly dividend of 14 cents per share on the common stock and 43 cents per share on Quanex depositary convertible exchangeable preferred stock. Both are payable on Sept. 30, 1993 to shareholders of record on Sept. 16, 1993.
 CORPORATE PROFILE
 Quanex is a technological leader in the manufacture of steel and aluminum specialized metal products for transportation, capital equipment, home building and remodeling and energy processing markets.
 Latest 12 Month Data: Sales: $613.2 million, operating income: $16.9 million, net income: $5.3 million, cash provided by operations: $37.5 million, earnings per primary share: $(.04), quarterly common dividend rate: 14 cents per share, book value per share: $10.63, long-term debt to capitalization: 36.1 percent, return (loss) on common equity: (.4 percent), common stock price range (52 week High & Low): $21 $14.
 QUANEX CORPORATION
 Consolidated Income Statements
 (in thousands, except per share data)
 Three Months Ended Nine Months
 July 31, July 31,
 1993 1992 1993 1992
 (Unaudited) (Unaudited)
 $153,500 $141,899 Net sales $456,300 $415,192
 136,584 126,704 Cost of sales 411,375 369,574
 16,916 15,195 Gross profit 44,925 45,618
 Selling, general and
 9,873 9,493 administrative expense 30,783 29,483
 7,043 5,702 Operating income 14,142 16,135
 (3,732) (3,981) Interest expense (10,988) (12,004)
 586 1,127 Capitalized interest 1,262 3,928
 720 1,005 Other, net 4,318 2,169
 Income before income
 taxes and cumulative
 effect of accounting
 4,617 3,853 change 8,734 10,228
 (1,939) (1,619) Income tax expense (3,668) (4,296)
 Income before cumulative
 effect of accounting
 2,678 2,234 change 5,066 5,932
 Cumulative effect of
 accounting change, net
 of related income tax
 -- -- benefit of $18,181 -- (25,108)
 2,678 2,234 Net income (loss) 5,066 (19,176)
 (1,484) (1,170) Preferred dividends (4,451) (1,170)
 Net income attributable
 $ 1,194 $ 1,064 to common stockholders $ 615 $(20,346)
 Weighted average common
 13,346 12,897 shares outstanding 13,532 12,467
 Earnings (loss) per
 common share:
 Primary - before
 cumulative effect of
 0.09 0.08 accounting change 0.05 0.38
 Primary - cumulative
 effect of accounting
 N/A N/A change 0.00 (2.01)
 0.09 0.08 Primary 0.05 (1.63)
 Common stock dividends
 $ 0.14 $ 0.13 per share $ 0.42 $ 0.39
 QUANEX CORPORATION
 Industry Segment Information
 (in thousands)
 Three months ended July 31,
 Volume Sales
 1993 1992 1993 1992
 (Unaudited)
 Hot rolled steel bars 112.6 tons 88.8 tons $53,739 $42,685
 Cold finished steel bars 47.4 tons 38.4 tons 38,815 31,842
 Steel lubes 17.4 tons 25.3 tons 23,544 26,413
 Aluminum building
 products 28,497 lbs 22,943 lbs 40,588 37,820
 Other N/A N/A (3,186) 3,139
 Total -- -- $153,500 $141,899
 Operating income
 1993 1992
 Hot rolled steel bars $5,255 $4,371
 Cold finished steel bars 1,718 1,116
 Steel lubes 1,043 (745)
 Aluminum building products 2,120 2,343
 Other (3,093) (1,383)
 Total $7,043 $5,702
 QUANEX CORPORATION
 Nine months ended July 31,
 Volume Sales
 1993 1992 1993 1992
 (Unaudited)
 Hot rolled steel bars 331.2 tons 284.9 tons $156,102 $137,475
 Cold finished steel bars 132.6 tons 105.2 tons 108,204 88,015
 Steel lubes 92.9 tons 71.1 tons 93,845 80,222
 Aluminum building
 products 74,730 lbs 65,602 lbs 101,693 98,053
 Other N/A N/A (3,544) 11,427
 Total -- -- $456,300 $415,192
 Operating income
 1993 1992
 Hot rolled steel bars $15,119 $14,748
 Cold finished steel bars 4,562 2,769
 Steel lubes 6,724 384
 Aluminum building products (2,608) 4,197
 Other (9,655) (5,963)
 Total $14,142 $16,135
 NOTE: Certain 1992 data has been reclassified in order to conform with the current year's presentation.
 QUANEX CORPORATION
 Consolidated Balance Sheets
 (in thousands)
 July 31, October 31,
 1993 1992 1992 1991
 (Unaudited) Assets (Audited)
 $93,574 $102,005 Cash and equivalents $96,858 $31,116
 Accounts receivable,
 65,753 59,998 net 66,778 55,021
 73,121 78,061 Inventories 80,077 72,369
 4,127 3,972 Other current assets 6,697 5,484
 236,575 244,036 Total current assets 250,410 163,990
 Property, plant and
 238,923 236,383 equipment, net 239,538 220,038
 34,201 35,149 Goodwill, net 34,912 35,860
 Designated cash and
 -- -- equivalents -- 17,000
 6,172 12,300 Other assets 9,889 9,571
 $515,871 $527,868 Total assets $534,749 $446,459
 Liabilities and
 stockholders'
 equity
 $ 54,691 $ 57,111 Accounts payable $ 66,403 $ 55,298
 29,984 29,012 Accrued expenses 29,352 33,241
 Current portion of
 206 193 long-term debt 200 6,309
 444 201 Other -- --
 Total current
 85,325 86,517 liabilities 95,955 94,848
 128,617 139,065 Long-term debt 128,694 156,483
 Deferred pension
 10,801 11,856 credits 9,884 10,212
 Deferred postretirement
 47,580 45,284 welfare benefits 45,949 --
 15,863 13,444 Deferred income taxes 16,675 32,428
 288,186 296,166 Total liabilities 297,157 293,971
 86,250 86,250 Preferred stock 86,250 --
 6,655 6,523 Common stock 6,819 5,868
 Additional paid-in
 85,160 76,254 capital 87,260 59,885
 49,620 62,675 Retained earnings 57,263 86,735
 Total stockholders'
 227,685 231,702 equity 237,592 152,488
 Total liabilities and
 $515,871 $527,868 stockholders' equity $534,749 $446,459
 QUANEX CORPORATION
 Consolidated Cash Flow Statements
 (In Thousands)
 Three months ended Nine months ended
 July 31, July 31,
 1993 1992 1993 1992
 (Unaudited) (Unaudited)
 Operating activities:
 Net income before cumulative
 $ 2,678 $ 2,234 effect of accounting change $ 5,066 $ 5,932
 7,158 7,007 Depreciation and amortization 22,758 20,075
 (364) -- Facilities realignment accrual (2,326) --
 (72) (1,083) Deferred income taxes 1,126
 (803)
 (74) 362 Pension costs 917 1,644
 588 665 Post retirement welfare benefits 1,631 45,284
 Cumulative effect of accounting
 -- -- change -- (43,289)
 Working capital provided by
 9,914 9,185 operations 29,172 28,843
 Decrease (increase) in accounts
 5,156 3,042 receivable 3,505 (4,977)
 1,472 (1,583) Decrease (increase) in inventory(2,985) (5,692)
 Increase (decrease) in accounts
 (4,236) (848) payable (10,734) 1,813
 Increase (decrease) in accrued
 (11) (3,085) expenses 239 (4,229)
 427 (471) Other, net 615 1,713
 Cash provided (used) by
 12,722 6,240 operations 19,812 17,471
 Capital expenditures, net of
 (10,834) (7,204) retirements (25,897) (35,171)
 Cash provided (used) by other
 (878) (1,719) investment activities 17,845 12,862
 Cash provided (used) by
 (4,794) 83,069 financing activities (15,044) 75,727
 (3,784) 80,386 Increase (decrease) in cash (3,284) 70,889
 97,358 21,619 Beginning of period cash 96,858 31,116
 $ 93,574 $102,005 End of period cash $ 93,574 $102,005
 -0- 8/26/93
 /CONTACT: Jeff Galow, 713-877-5327, or Ann Meador, 713-961-4600, both of Quanex Corporation/
 (NX)


CO: Quanex Corporation ST: Texas IN: MNG SU: ERN

LD -- NY071 -- 6384 08/26/93 17:39 EDT
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