Quanex Building Products : January 2021 Investor Presentation

Investor Presentation

January 2021

Safe Harbor Statement

Note on 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 presentation. 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, 2020, and Quanex'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 presentation are made as of the date hereof, and the Company undertakes no obligation to update or revise any forward-looking statements to reflect new information or events.

Note on Non-GAAPFinancial Measures: Adjusted Net Income (Loss) (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 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 EBITDA (defined as net income or loss before interest, taxes, depreciation and amortization and other, net, as described in the Company's filings with the Securities and Exchange Commission) are non-GAAP financial measures that Quanex's management uses to measure its operational performance and assist with financial decision-making. Adjusted EBITDA is EBITDA as further adjusted to exclude non-recurring items such as purchase price inventory step-ups, transaction costs, certain severance charges, gain/loss on the sale of fixed assets, restructuring charges and asset impairment charges. Free Cash Flow is a non-GAAP measure calculated using cash provided by operating activities less capital expenditures. 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 these non-GAAP measures provide a consistent basis for comparison between periods, and will assist investors in understanding the Company's financial performance when comparing our results to other investment opportunities. While Quanex considers Adjusted Net Income, EBITDA, Adjusted EBITDA and Free Cash Flow to be important measures of operating performance, it does not intend for this information to be considered in isolation or as a substitute for net income or other measures prepared in accordance with US GAAP. Due to the high variability and difficulty in predicting certain items that affect GAAP net income (such as unusual gains and losses, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions or divestitures and the timing and potential significance of tax considerations), information reconciling forward-looking Adjusted EBITDA as presented to GAAP financial measures is generally not available without unreasonable effort. The presented non-GAAP measures may not be the same as those used by other companies. The Company 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.

2

Evolution of Quanex

SIGNIFICANT IMPROVEMENT IN PROFITABILITY

Quanex

2Q14: Divested Nichols Aluminum

Corporation

3Q15: Acquired HL Plastics

$2,500

Pre 2008

1Q16: Acquired Woodcraft

Spin/Sale

~14%

Acquired

$2,000

Aluminite 1Q13

~12.3%

Acquired

~11.5%

Edgetech 2Q11

Millions)in($

$1,500

~10%

Sales

$1,000

~6%

Net

$500

~5%

~2%

$0

FY 2007

FY 2009

FY 2012

FY 2013

FY2018

FY2019

FY2020

Building Products

Aluminum

Steel

EBITDA Margin

Net Sales

Note: EBITDA adjusted to exclude non-recurring items referenced in Safe Harbor Statement on slide 2.

16.0%

14.0%

12.0%

10.0%

8.0%	Margin
6.0%	EBITDA

4.0%

2.0%

0.0%

3

Quanex At-A-Glance

INDUSTRY-LEADING, "PURE PLAY" BUILDING PRODUCTS MANUFACTURER

Quanex is the largest supplier of components to		~55%	IG SPACERS	SCREENS & OTHER
OEMs in the building products sector. OEMs' customer			15%
base is predominately focused on serving new	55%	NA FENESTRATION
construction and R&R markets	(~60% R&R)

MANUFACTURING FACILITIES

Super	Duraseal®	Screens
Spacer®

• 31 locations (~3 million sq. ft.)						VINYL PROFILES
• Sufficient capacity for growth
KEY FY20 FINANCIALS
• Net Sales: $851.6 Million					Quanex	Quanex
• Net Income: $38.5 Million					Architectural EnergyCore®
				Series™ System	System
• Adjusted Net Income: $40.7 Million				~25%
• Adjusted EBITDA: $104.5 Million(1)
• Cash Provided by Operating Activities: $100.8 Million				NA CABINET
• Free Cash Flow: $75.1 Million(2)
			COMPONENTS	Hardwood	Rigid Thermal Foil	Cabinet
CORPORATE HEADQUARTERS				(~70% R&R)	Cabinet Door	Cabinet Door	Face Plate
Houston, Texas	15%				Drawer Front
						IG SPACERS
EMPLOYEES	EU Engineered		~20%	VINYL PROFILES
~4,000	Components			Energy
			EU FENESTRATION
					Efficient
				(~95% R&R)		Vinyl Profile
							Super	Rigid IG
							Spacer®	Spacer
(1) Adjusted Net Income and Adjusted EBITDA excludes non-recurring items referenced in Safe Harbor Statement on slide 2.	Conservatory Roof
Systems
(2) Free Cash Flow is defined as cash provided by operating activities less capital expenditures. Free Cash Flow is measured before application of certain contractual	4
commitments (including capital lease obligations), and accordingly is not a true measure of the Company's residual cash flow available for discretionary expenditures.