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QUANEX ANNOUNCES FISCAL 1991 EARNINGS; COMMON DIVIDEND INCREASED

 QUANEX ANNOUNCES FISCAL 1991 EARNINGS; COMMON DIVIDEND INCREASED
 HOUSTON, Dec. 4 /PRNewswire/ -- Quanex Corporation (NYSE: NX), a "Fortune 500" company and leading manufacturer of specialty metal products, today announced net income of $12.4 million on sales of $589 million and primary earnings per share (EPS) of $1.02 for the fiscal year ended Oct. 31, 1991. This compares to net income of $28 million and EPS of $2.03 for 1990. Also announced was fourth quarter 1991 net income of $4.4 million and EPS of $.38; this compares to $9.1 million and $.68 in the fourth quarter of last year. Although earnings were down sharply, Quanex growth and market diversification strategies enabled it to remain profitable while many industry peers report major losses. Fiscal 1991 earnings met the company's previously stated expectations that EPS would be about half of that earned in fiscal 1990.
 Steel Bar Results Now Reported Separately
 for MacSteel & LaSalle Divisions
 To reflect the different end-market dynamics of its steel bar businesses, the company has begun reporting MacSteel's results in the "Hot Rolled Steel Bars segment." LaSalle Steel's results are reported in the "Cold Finished Steel Bars segment." MacSteel is a low cost producer of high quality hot rolled alloy and bearing steel bars. LaSalle Steel produces precision surface cold finished steel bars with customized mechanical and metallurgical properties.
 MacSteel and Nichols-Homeshield (N-H) Contribute 89 Percent
 of 1991 Operating Income
 Although all industry segments were profitable in 1991, MacSteel and N-H were the principal contributors. MacSteel's operating income totalled $22 million ($56.00 per ton), 63 percent of the corporate total and 33 percent of total sales. MacSteel's cleaner steel expansion was recently completed; board of director's approval of Phase II of the program will be requested when the direction of the economy is clear.
 N-H's Aluminum Building Products segment had operating income of $9.2 million or 26 percent of the corporate total with 24 percent of total sales. N-H is completing construction of a state-of-the-art aluminum mini-mill in Davenport, Iowa. MacSteel and N-H are key elements in the company's diversification and growth strategy.
 1992 Outlook Is Positive, First Quarter Expected
 to be Marginally Profitable
 Carl E. Pfeiffer, chairman and chief executive officer, said, "In spite of the current state of the economy we expect improved fiscal 1992 earnings. The amount of earnings improvement in 1992 will depend on the strength of the economy. If we can begin commercial operations at the new aluminum mini-mill as expected by next July, it will also benefit 1992 earnings.
 Our first quarter typically has the lowest earnings of the year due to seasonal factors and, combined with the poor economy, net income in the first quarter of 1992 could be breakeven to marginally profitable. Many Quanex products have a competitive advantage that reduces the cyclicality of our earnings. That was evident in 1991 as Quanex outperformed many companies to which it is compared and we expect this to continue."
 Debt to be Reduced by Partial Redemption
 Pfeiffer continued, "Although 1991 earnings declined 56 percent, cash flow from operations decreased only 28 percent to $40 million. Our long term debt to capital ratio is consistent with the company's $31 million cash position (not including designated cash of $17 million), cash flow from operations, debt maturities, dividend requirements and capital investment plans. Debt will be reduced, below Oct. 31, 1991 levels, by the previously announced $6.1 million partial redemption of our convertible subordinated debentures which expires Dec. 13, 1991. Depending on market conditions, subsequent partial redemptions of these debentures may be done."
 Quanex Board of Directors Declare Common Dividend Increase
 Pfeiffer concluded, "The board of directors has declared an increase in the quarterly dividend from $.12 to $.13 per share of Quanex common stock. Our primary use of cash flow is for capital investments to produce earnings growth, such as the new aluminum mini-mill project. However, this dividend increase reflects our desire to achieve a pattern of gradually increasing, sustainable dividends. The next quarterly common dividend is payable Dec. 31, 1991 to shareholders of record on Dec. 17, 1991."
 Corporate Profile
 Quanex is a technological leader in the manufacture of steel, aluminum and titanium metal products for transportation, capital equipment, home building and remodeling and energy processing markets.
 Latest 12 months data (through fourth quarter):
 Sales: $588.9 million
 Operating earnings: $35.1 million
 Net income: $12.4 million
 Cash from operations: $40.2 million
 Primary earnings per share: $1.02
 Quarterly common dividend rate: $.12 per share
 Book value per share: $12.99
 Long term debt/capitalization: 51.6 percent
 Return on shareholders' equity: 8.0 percent
 Common stock price range (52 week high & low): $23 and $10-1/8
 QUANEX CORPORATION
 Consolidated Income Statements
 (In thousands, except per share data)
 Three Months Ended Oct.31, 1991 1990
 (Unaudited)
 Net sales $151,458 $170,491
 Cost of sales 131,252 141,687
 Gross profit 20,206 28,804
 Selling, general &
 administrative expense 11,062 9,428
 Operating income 9,144 19,376
 Interest expense (4,505) (3,435)
 Capitalized interest 1,008 213
 Other, net 1,941 (1,441)
 Income before income taxes 7,588 14,713
 Income tax expense (3,184) (5,592)
 Net income 4,404 9,121
 Preferred dividends -- (787)
 Net income attributable to
 common stockholders $ 4,404 $ 8,334
 Weighted average common
 shares outstanding 11,694 12,166
 Earnings per common share:
 Primary $ 0.38 $ 0.68
 Assuming full dilution $ 0.35 $ 0.64
 Common stock dividends per share
 (record date) $ 0.12 $ 0.10
 Year Ended Oct. 31, 1991 1990
 (Audited)
 Net sales $588,888 $650,316
 Cost of sales 514,894 551,929
 Gross profit 73,994 98,387
 Selling, general &
 administrative expense 38,914 41,207
 Operating income 35,080 57,180
 Interest expense (17,657) (10,851)
 Capitalized interest 2,535 239
 Other, net 1,489 (1,374)
 Income before income taxes 21,447 45,194
 Income tax expense (9,007) (17,174)
 Net income 12,440 28,020
 Preferred dividends (524) (3,148)
 Net income attributable
 to common stockholders $11,916 $24,872
 Weighted average common
 shares outstanding 11,679 12,224
 Earnings per common share:
 Primary $ 1.02 $ 2.03
 Assuming full dilution $ 1.00 $ 1.94
 Common stock dividends per share
 (record date) $ 0.48 $ 0.40
 QUANEX CORPORATION
 Industry Segment Information
 (In thousands)
 Sales Operating Income
 Three Months Ended Oct. 31, 1991 1990 1991 1990
 (Unaudited)
 Hot rolled steel bars $ 51,612 $ 54,347 $ 7,086 $ 7,763
 Cold finished steel bars 24,166 30,952 (103) 947
 Steel tubes 25,308 33,016 (1,510) 5,441
 Aluminum building products 42,275 42,031 3,626 5,085
 Other and corporate expense 8,097 10,145 45 140
 Total $151,458 $170,491 $ 9,144 $19,376
 Sales Operating Income
 Year Ended Oct. 31, 1991 1990 1991 1990
 (Audited)
 Hot rolled steel bars $192,291 $213,567 $21,976 $28,778
 Cold finished steel bars 98,951 121,543 483 4,112
 Steel tubes 122,693 114,822 4,184 13,008
 Aluminum building products 138,957 153,702 9,225 15,178
 Other and corporate expense 35,996 46,682 (788) (3,896)
 Total $588,888 $650,316 $35,080 $57,180
 QUANEX CORPORATION
 Consolidated Balance Sheets
 (In thousands)
 At Oct. 31, 1991 1990
 Assets (Audited)
 Cash and equivalents $31,116 $24,053
 Accounts receivable, net 55,021 70,147
 Inventories 72,369 74,641
 Other current assets 5,484 1,145
 Total current assets 163,990 169,986
 Property, plant &
 equipment, net 220,038 187,712
 Goodwill, net 35,860 36,828
 Designated cash & equivalents 17,000 49,000
 Other assets 9,571 7,855
 Total assets $446,459 $451,381
 Liabilities & Stockholders' Equity
 Accounts payable $ 55,298 $ 64,033
 Accrued expenses 33,241 31,480
 Current portion of
 long-term debt 6,309 196
 Other -- 90
 Total current liabilities 94,848 95,799
 Long-term debt 156,483 131,302
 Deferred pension credits 10,212 11,450
 Deferred income taxes 32,428 31,400
 Stockholders' equity 152,488 181,430
 Total liabilities &
 stockholders' equity $446,459 $451,381
 QUANEX CORPORATION
 Consolidated Cash Flows Statements
 (In thousands)
 Three Months Ended Oct. 31, 1991 1990
 (Unaudited)
 Operating activities:
 Net income $4,404 $9,121
 Depreciation & amortization 6,169 5,174
 Deferred income taxes 2,756 4,411
 Other, net 2,422 1,656
 Working capital provided
 by operations 15,751 20,362
 Decrease (increase) in
 accounts receivable 1,941 (1,386)
 Decrease (increase)
 in inventory (3,030) (4,892)
 Increase (decrease)
 in accounts payable 7,748 (205)
 Increase (decrease)
 in accrued expense (1,471) 6,538
 Other, net (1,899) (2,242)
 Cash provided by operations 19,040 18,175
 Capital expenditures,
 net of retirement (11,116) (8,839)
 Cash provided (used)
 by other
 investment activities 14,718 (48,179)
 Cash provided (used) by
 financing activities (7,928) 43,455
 Increase (decrease) in cash 14,714 4,612
 Beginning of period cash 16,402 19,441
 End of period cash $31,116 $24,053
 Year Ended Oct. 31, 1991 1990
 (Audited)
 Operating activities:
 Net income $12,440 $28,020
 Depreciation &
 amortization 25,741 22,920
 Deferred income taxes 1,028 (632)
 Other, net 3,238 3,153
 Working capital provided
 by operations 42,447 53,461
 Decrease (increase) in
 accounts receivable 12,620 (6,564)
 Decrease (increase)
 in inventory (481) 1,378
 Increase (decrease) in
 accounts payable (7,091) 8,962
 Increase (decrease)
 in accrued expenses (2,819) (2,133)
 Other, net (4,461) 408
 Cash provided by operations 40,215 55,512
 Capital expenditures,
 net of retirement (47,190) (29,796)
 Cash provided (used) by
 other investment
 activities 30,102 (45,960)
 Cash provided (used) by
 financing activities (16,064) 19,451
 Increase (decrease) in cash 7,063 (793)
 Beginning of period cash 24,053 24,846
 End of period cash $31,116 $24,053
 -0- 12/4/91
 /CONTACT: W.F. Cleary or C.A. Meador of Quanex, 713-961-4600/
 (NX) CO: Quanex Corporation ST: Texas IN: MNG SU: ERN


JT -- NY045 -- 9172 12/04/91 11:57 EST
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