1900 WEST LOOP SOUTH
SUITE 1500
HOUSTON, TEXAS 77027
713.961.4600WWW.QUANEX.COM
MARKET DRIVEN
PROCESS BASED
NX NYSE
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ucts in a wide range of gauge, width, alloyand temper as well as offering manyvalue-added services such as leveling, slit-ting and coil-coating. Its customers areprimarily in the North American build-ing and construction market with sec-ondary markets being capital goods andtransportation markets. Nichols utilizesstate-of-the-art, computerized scraplending techniques that allow it to processlow grades of aluminum scrap, andemploys highly efficient Hazelett contin-uous casting technology that significantlyreduces its energy consumption comparedto competitors. These capabilities makeNichols one of the most profitable andlowest cost U.S. producers of aluminumsheet products for the North Americanbuilding and construction market.
The Engineered Building Productssegment produces rigid polyvinyl chlo-ride (PVC) extruded window and doorproducts, insulated glass sealant systems,window and door screens, door thresh-olds, divided light window products,and other fenestration components.Engineered Building Products designsand produces proprietary window anddoor systems, fabricated metal, wood andvinyl window and door components,spacer and sealant systems and other
FOCUS
Customers are the primary focus ofQuanex Building Products. QBP nurturesclose relationships by offering customersthe engineering expertise and manufac-turing experience to collaborate on newproducts, developing the processes toproduce them, and then delivering on ajust-in-time basis. QBPs’ contributionsenhance the performance, aesthetics anddistribution of the customers’ products.QBP has successfully fostered and grownlong term partnerships with some ofthe biggest names in the marketplace byutilizing this customer focused strategyand by being a low cost producer.
BUSINESS OVERVIEW
Quanex Building Products is comprisedof two segments – Aluminum Sheet Build-ing Products and Engineered BuildingProducts –manufacturing quality residentialbuilding products that are sold to OriginalEquipment Manufacturers (OEMs) anddistributors. With 18 production facilitiesin the United States and employing ap-proximately 2,600 employees, consolidatedsales for fiscal 2007 were $964 million.
SEGMENTS
Aluminum Sheet Building Products fea-tures Nichols Aluminum, a producer of360 million pounds annually of flat-rolledaluminum sheet that may be mill finishedor coated. Nichols produces its sheet prod-
Fiscal year ended October 31,2007 2006 2005
(in thousands)
Operating Results Data:Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 963,975 $ 1,043,773 $ 951,819Operating income. . . . . . . . . . . . . . . . . . . . . . . . . . . 88,614 103,805 101,965
Income from continuing operations.. . . . . . . . . . 57,411 64,284 61,969
Unaudited pro forma diluted earnings fromcontinuing operations per common share . . . . . . . $ 1.53 $ 1.69 $ 1.611
Become North America’s Leading Manufacturerof Engineered Components Sold to OEMsand Distributors of Building Products
VISION
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products for OEMs that serve the NorthAmerican new residential constructionand remodeling markets. EngineeredBuilding Products is distinguished bysuperior product development competen-cies and tight, long-standing customerrelationships built on its expertise inproduct design and engineering supportservices and the quality products theydeliver on a line sequenced or a just-in-time
basis. Many of these window and doorcustomers consider Quanex BuildingProducts’ businesses an extension of theirown enterprises.
MARKET POSITIONS
Quanex Building Products targets nichesof the North American window and doorand construction markets where it canpartner with customers to provide themwith customized solutions through a fullorchestration of industry-leading prod-ucts and services. This approach providesdifferentiation and earns the Company apreferred and, in many cases, exclusivesupply relationship with many of the bestknown brands in the industry. Customersturn to the experience and expertise ofQBP to address their product design andmanufacturing challenges when develop-ing new and cutting-edge products.
GROWTH STRATEGY
Quanex Building Products’ strategy is togrow both organically and through strate-gic acquisitions. The Company continuesto gain sales through partnerships with agrowing number of both domestic andglobal customers, and the introduction ofinnovative new products. In addition,Quanex Building Products continues toseek acquisitions of businesses that produceproducts that serve similar or adjacentmarkets in North America, Europeand Asia.
PRO FORMADILUTED EARNINGS PER SHAREFROM CONTINUING OPERATIONS
in Dollars
$1.00
’05 ’06 ’07
$2.00
*
PRO FORMANET SALES
in Millions
$800
$600
$400
$200
’05 ’06 ’07
$1,000
*
PRO FORMAOPERATING INCOME
in Millions
$80
$60
$40
$20
’05 ’06 ’07
$100
*
2*Source: Quanex BuildingProducts Form 10–12(b)filed January 11th, 2008
Fiscal year ended October 31,2007 2006 2005
(in thousands except share data)
. . . . . . . $ 963,975 $ 1,043,773 $ 951,819
. . . . . . . 88,614 103,805 101,965
. . . . . . . 57,411 64,284 61,969
m. . . . . . . $ 1.53 $ 1.69 $ 1.61
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3
• Largest manufacturer of extruded PVCproducts and accessories for window anddoor OEMs in the U.S.
• 4 production facilities
• Customer-specific PVC andcomposite profiles
• Impact resistant window anddoor components
• In-house window system designand testing
• Precision extrusion tooling designand manufacture
• In-house compound developmentand blending
•163 extrusion lines
• 35% share of U.S. vinyl new construction• 15% share of U.S. vinyl remodel/
replacement• 25% share of total U.S. vinyl market
• Scrap-based mini-mill manufacturer ofcoated and mill finish aluminum sheetproducts.
• 4 production facilities
• Mill finish aluminum sheet• Coated aluminum sheet
• 360 million lbs annual finished capacity• Cold rolling to gauge, annealing to
temper, leveling, custom coating andslitting
• 15% share of building and construction• 10% share of truck-trailer• 20% share of machinery and equipment• 5% share of electrical
DESCRIPTION
SIZE
MANUFACTURINGCAPABILITIES
ESTIMATED* MARKETPOSITION
KEYPRODUCTS
NICHOLS ALUMINUM PVC EXTRUDED WINDOW ANDDOOR PRODUCTS
ALUMINUM SHEETBUILDING PRODUCTS ENG
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*Based on 2007 data4
INSULATED GLASS SEALANT SYSTEMSWINDOW AND DOORFENESTRATION COMPONENTS
• Manufactures screens, grilles, thresholds,astragals and roll formed products forwindow and door manufacturers. Alsomanufactures architectural wood moldings.
• 8 production facilities
• Window and door screens• Wood window grilles• Door thresholds and astragals• Architectural moldings• Cladding• Window muntin and divided light grilles
• Roll forming• Slitting• Laser welding• Stamping• Coating• RolltrusionTM
• Wood molding• Component assembly
• 45% of wood patio door screens• 30% of wood window screens• 25% of roll-formed spacers• 10% of entry door thresholds
• Manufactures composite spacer products andsealants for fabricating windows and doors.Also manufactures insulating glass assemblyequipment.
• 2 production facilities• China startup (est. 12/08)
• Flexible Insulated Glass spacer systems• Insulating glass, window and door accessories• Besten fully automatic and manual insulating
glass fabrication equipment
• 21 extrusion lines• One continuous process mixing system• 10 conventional bulk mixers• State-of-the-art pilot plant facility• Research and development facility
• Large, diversified base of 800 customers inNorth America and another 200 globally
• 20% share of North America window & doormarket (footage)
• 50% share of U.S. window new construction• 10% share of U.S. window remodel/replacement
ENGINEERED BUILDING PRODUCTS
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RAYMOND A. JEANChairman, President and Chief Executive Officer
THOMAS M. WALKERSenior Vice President — Finance and Chief Financial Officer
KEVIN P. DELANEYSenior Vice President — General Counsel and Secretary
CORPORATE OFFICERS
Nichols AluminumDavenport and General Office1725 Rockingham RoadDavenport, Iowa 52802(563) 324-2121
Nichols Aluminum Alabama2001 Highway 20 WestDecatur, Alabama 35601(256) 353-1550
Nichols Aluminum Casting2101 J.M. Morris Blvd.Davenport, Iowa 52802(563) 322-0118
Nichols Aluminum Lincolnshire200 Schelter RoadLincolnshire, Illinois 60069(847) 634-3150
ALUMINUM SHEET BUILDING PRODUCTS
ENGINEERED BUILDING PRODUCTS
Mikron
Homeshield
Truseal Technologies
JOHN J. MANNIONVice President — Treasurer
PAUL A. HAMMONDSVice President — Corporate Development
BRENT L. KORBVice President — Corporate Controller
Mikron West (2)1034 Sixth Avenue NorthKent, Washington 98032(253) 854-8020
Mikron East100 Mikron WayRichmond, Kentucky 40475(859) 623-2643
Mikron Midwest501 North Elida StreetWinnebago, Illinois 61088(815) 335-2372
HOMESHIELD West Coast250 Steelhead WayThe Dalles, Oregon 97058(541) 298-1200
HOMESHIELD Richmond451 Industrial ParkwayRichmond, Indiana 47374(765) 966-0322
HOMESHIELD Rice Lake311 West Coleman StreetRice Lake, Wisconsin 54868(715) 234-9061
HOMESHIELD Chatsworth (2)7942 North 3350 East RoadChatsworth, Illinois 60921(815) 635-3171
HOMESHIELD Mounds View2270 Woodale DriveMounds View, Minnesota 55112(763) 231-4000
HOMESHIELD Luck501 Main StreetLuck, Wisconsin 54853(715) 472-2223
HOMESHIELD Dubuque1111 Purina DriveDubuque, Iowa 52001(563) 582-1472
Truseal Technologies6680 Parkland BoulevardSolon, Ohio 44139(216) 910-1500
Truseal Technologies403 Treuhaft BoulevardBarbourville, Kentucky 40906(606) 546-7300
5
Besten Equipment, Inc.6680 Parkland BoulevardSolon, Ohio 44139(216) 581-1166
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