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NCI Building Systems Reports Third Quarter Fiscal 2013 Results



        NCI Building Systems Reports Third Quarter Fiscal 2013 Results

PR Newswire

HOUSTON, Sept. 4, 2013

HOUSTON, Sept. 4, 2013 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS)
today reported financial results for the third quarter ended July 28, 2013.

Third Quarter Highlights:

  o Sales rose 6% to $317.2 million, compared to the same quarter last fiscal
    year, and increased 8%, sequentially.
  o Gross profit increased 2% to $67.0 million from $65.6 million in the
    comparable quarter last year, and rose 10% from $60.8 million in the
    previous quarter.
  o Adjusted EBITDA was $17.0 million, declining from $18.9 million in the
    third quarter of last fiscal year, but increasing from $10.6 million in
    the second quarter of 2013.
  o Adjusted net income, which excludes the impact of the cost related to the
    early extinguishment of the previous term loan, was $0.02 per diluted
    common share.
  o Quarter-end backlog, adjusted to include Metl-Span, was up slightly to
    $319.2 million compared to $311.7 million for the same period in fiscal
    2012 and $317.1 million in the second quarter of 2013.

Norman C. Chambers, Chairman, President and Chief Executive, commented, "We
generated sequential improvement in our operating results in the third quarter
despite a lack of meaningful pick-up in demand for nonresidential
construction.  The absence of any strong economic momentum continues to delay
many projects from moving to the construction phase.  As a result, our overall
volumes are lagging our internal expectations as most segments of
nonresidential construction continue to be impacted by flat-to-lower demand.

"Results across our end-markets and product categories continue to be mixed.
We produced strong year-over-year gains in component sales to the commercial
and industrial markets. However, they were more than offset by continued soft
demand in the agricultural market. Our Coatings group once again performed
well, delivering top-line growth and improved profitability both sequentially
and compared to last year's third quarter. The Buildings group was impacted by
continued pricing pressure, lower margin product mix and low fixed cost
leverage.

"With ten consecutive months of growth, the Architecture Billings C&I Index
and McGraw-Hill data continue to point toward a pick-up in nonresidential
construction activity over the next six to nine months. However, our backlog
is up only slightly both sequentially and compared to last year's third
quarter. We believe that as demand picks up, we will benefit from increasing
levels of operating leverage and improved product mix. However, we are not
waiting for market tailwinds to improve our performance. The ongoing process
of improving efficiencies that began in 2009 with the rationalization of our
manufacturing plants has improved our visibility of areas that require
attention. We are taking additional actions to strengthen our customer service
efforts and to improve the productivity and quality of our manufacturing
operations."

Third Quarter 2013 Results

For the third quarter, sales grew 6.3% to $317.2 million from $298.5 million
in last year's third quarter mainly due to the full quarter contribution from
the Company's June 2012 Metl-Span acquisition.  On a sequential basis,
revenues were up 8.1% from $293.4 million in the second quarter.

Gross profit increased 2.2% to $67.0 million from $65.6 million in the third
quarter of 2012. Gross profit margin narrowed to 21.1% from 22.0% in the third
quarter of last year due to continued pricing pressure and increased
manufacturing costs due to ongoing investments in strategic initiatives,
including upgrading systems and manufacturing processes. The Company also
incurred ramp-up costs at the Middletown, Ohio coating and Mattoon, Illinois
insulated metal panel facilities.

Engineering, selling, general and administrative (ESG&A) expenses were $62.8
million, up from $55.6 million in the third quarter of 2012, primarily due to
the acquisition effect of Metl-Span and investments in strategic initiatives. 
As a percentage of revenues, ESG&A was 19.8% in the 2013 third quarter
compared to 18.6% in the prior year's period and 21.4% in the 2013 second
quarter.  The increase in expenditures was concentrated on improvements in our
distribution channels, manufacturing capabilities and customer responsiveness
as well as the incremental costs associated with the ramp-up of Middletown and
totaled approximately $2.3 million of ESG&A expenses this quarter with the
effect of the Metl-Span acquisition adding another $3.9 million.

Due to lower than anticipated volumes, competitive pricing and the incremental
costs associated with strategic initiatives, operating income declined to $4.3
million in the 2013 third quarter compared to $7.0 million in last year's
third quarter.

As noted above, Adjusted EBITDA, a non-GAAP measure, defined as earnings
before interest, taxes, depreciation and amortization, and cash and other
non-cash items, in accordance with the Company's credit agreement fell to
$17.0 million compared to $18.9 million reported in last year's third quarter
but increased 61% from $10.6 million in this year's second quarter. Please see
the reconciliation of Adjusted EBITDA to net income in the Company's financial
statements.

During the quarter, we incurred a predominantly non-cash charge of $21.5
million in debt extinguishment costs ($13.2 million after tax, or $0.21 per
diluted common share) associated with amending and extending our credit
agreement. The amendment extends the maturity until June 2019 and
substantially reduces our borrowing costs, which should result in annual
savings of nearly $12.0 million.

For the third quarter of 2013, the Company reported a net loss of $12.2
million, or $0.19 per diluted common share. Excluding the impact of the debt
extinguishment costs, NCI generated adjusted net income of $1.0 million, or
$0.02 per diluted common share. The weighted average number of common shares
used in the calculation of third quarter 2013 loss per diluted common share
was 64.2 million. In last year's third quarter, the Company reported a net
loss applicable to common shares of $52.1 million, which included a non-cash,
one-time convertible preferred stock amendment charge of $48.8 million related
to the elimination of NCI's quarterly dividend on its convertible preferred
shares, as well as $2.7 million in net acquisition related expenses and $4.0
million in net debt extinguishment costs associated with the Metl-Span
acquisition. Exclusive of these charges, net income applicable to common
shares would have been $0.9 million, or $0.05 per diluted common share. The
weighted average number of common shares used in the calculation of third
quarter 2012 loss per diluted common share was 19.0 million.  

Inventory levels increased 19.4% over the same period of the prior year to
$135.2 million due to lower demand than anticipated in the third quarter and
increased purchases ahead of announced steel price increases. Annualized
inventory turnover was 7.5 turns for the third quarter compared to 8.3 turns
in last year's third quarter and 7.5 turns in the second quarter of fiscal
2013.

Capital expenditures were $17.5 million for the first nine months of 2013. The
majority of our expenditures were targeted at upgrading facilities and
systems. The projects include refurbishing the Middletown coating facility,
integrating Metl-Span, enhancing the Coatings group's manufacturing
capabilities and launching system improvements in the Buildings group.
Year-to-date, the net cash used in operating activities was $9.1 million.

Third Quarter 2013 Segment Performance

The Coatings group third party sales grew 18.6% year-over-year and 5.2%
sequentially. Operating income increased to $5.5 million in the third quarter
of 2013 from $5.1 million in the third quarter of last fiscal year and $4.8
million in the 2013 second quarter. The performance of the group was led by
HVAC, lighting fixtures, and appliance sales and strong shipments of heavy
gauge packages to construction markets.  On August 6, two ovens in our
Jackson, Mississippi plant were damaged in a fire caused by an exhaust fan
failure.  There were no injuries or damage to the high value assets in the
plant.  Customer orders were transferred to our Ohio and Georgia facilities
and we did not experience meaningful delays in the scheduled deliveries.  In
the fiscal fourth quarter, we anticipate incurring between $0.5 and $1.0
million for incremental operating costs as we temporarily re-route customer
and internal orders. Over the next year, we anticipate recouping the majority
of those costs from our insurance carrier.

The Components group produced a 17.2% increase in third-party sales and an
8.7% increase sequentially. Operating income declined to $8.1 million from
$9.4 million in the same quarter last fiscal year and rose from $5.1 million
in the second quarter of 2013. The year-over-year decline in operating income
was due to the added costs associated with the integration of Metl-Span, the
ramping-up of the recently renovated Mattoon, Illinois plant, as well as
identifiable costs associated with investments in sales and marketing
resources and systems. These costs were partially offset by increased volume
in insulated metal panels as a result of the Metl-Span acquisition. 

The Buildings group's total sales were down 3.6% compared to last year's third
quarter, and third-party sales declined 3.5%. Sequentially, third party sales
grew 8.0%. Operating income declined to $6.1 million in the 2013 third
quarter, compared to $9.1 million in the comparable quarter last year and rose
from $4.2 million in the 2013 second quarter. The performance of the Buildings
group was impacted by continued pricing pressures in the low demand
environment as well as lower leverage on fixed costs.  

For additional information please see the CFO Commentary at www.ncigroup.com
under the investors tab.

Market Commentary

Leading indicators for nonresidential construction activity remain positive.
The economy has been experiencing a strong residential recovery, which usually
precedes a nonresidential recovery, as nonresidential vacancy rates decline
and the labor markets continue to improve.  However, the construction economy
in the third quarter was suppressed by the sluggishness of the broader
economy. In the third quarter of NCI's fiscal 2013, low-rise nonresidential
construction starts (measured in square feet) decreased 10.7% from the
comparable period in fiscal 2012, as reported by McGraw-Hill.

The American Institute of Architects' Architecture Billing Index (ABI)
remained in growth mode in July at 52.7, jumping one full point from 51.6 in
June and essentially flat with May at 52.9. The new projects inquiry index was
up sharply in July to 66.4 from 62.6 in June.

The latest Fed Senior Loan Officer Survey shows the demand for nonresidential
loans strengthening in combination with the continued easing of lending
standards. This favorable environment supports the improved growth in real
nonresidential investment that for the last calendar quarter grew 4.6%
year-over-year. 

Summary/Outlook

"Our performance so far this year has been challenged mainly due to lower
volumes and pricing," noted Mr. Chambers. "The recent additions to backlog in
the period continue to reflect a number of larger projects and an increased
level of design/build projects with better margins. Operationally, the
Components group delivered significant growth in Commercial/Industrial sector
sales to NCI's largest OEM customers and insulated metal panels. The Coatings
group continues to benefit from higher volumes and expanding margins. In
addition, the Middletown, Ohio light gauge paint line has ramped production
and the facility remains on track to become profitable in the fourth fiscal
quarter of 2013. We have also announced a price increase for several of our
product lines.

"Given that low-rise nonresidential construction starts have declined in the
first nine months of fiscal 2013, we think it is unlikely the market will
recover sufficiently to post annual growth in volume.  We remain positive that
the industry, during the next few years, will return to the 40 year trend of
1.3 billion square feet of new construction starts.  It is for that reason
that we continue to invest in our business during the early stage of economic
recovery to enhance our earnings and growth as the economy recovers," Mr.
Chambers concluded.

Conference Call Information

The NCI Building Systems, Inc. third quarter conference call is scheduled for
Wednesday, September 4, 2013, at 5:00 PM ET. Please dial 1-480-629-9692 or
1-877-941-8609 to participate in the call. To listen to a live broadcast of
the call over the Internet or to review the archived call, please visit the
Company's website at www.ncigroup.com. To access the taped replay, please dial
1-303-590-3030 or 1-800-406-7325 and the passcode 4636317# when prompted. The
taped replay will be available two hours after the call through September 18,
2013.  

NCI Building Systems, Inc. is one of North America's largest integrated
manufacturers of metal products for the nonresidential building industry. NCI
is comprised of a family of companies operating manufacturing facilities
across the United States and Mexico, with additional sales and distribution
offices throughout the United States and Canada.

Contact:

Layne de Alvarez
Director, Investor Relations
281-897-7710

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as "believe,"
"guidance," "potential," "expect," "should," "will," "forecast" and similar
expressions are forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect our current expectations, assumptions
and/or beliefs concerning future events. As a result, these forward-looking
statements rely on a number of assumptions, forecasts, and estimates and, as a
result, these forward-looking statements are subject to a number of risks and
uncertainties that may cause the Company's actual performance to differ
materially from that projected in such statements. Among the factors that
could cause actual results to differ materially include, but are not limited
to industry cyclicality and seasonality and adverse weather conditions;
ability to service the Company's debt; ability to integrate Metl-Span with the
Company's business or to realize the anticipated benefits of such acquisition;
fluctuations in customer demand and other patterns; raw material pricing and
supply; competitive activity and pricing pressure; general economic conditions
affecting the construction industry; financial crises or fluctuations in the
U.S. and abroad; changes in laws or regulations; and the volatility of the
Company's stock price. The Company's SEC filings, including our most recent
reports on Form 10-K, particularly under Item 1A "Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended October 28,
2012, identify other important factors, though not necessarily all such
factors, that could cause future outcomes to differ materially from those set
forth in the forward-looking statements. NCI expressly disclaims any
obligation to release publicly any updates or revisions to these
forward-looking statements to reflect any changes in its expectations. 

 

 

 NCI BUILDING SYSTEMS, INC. 
 CONSOLIDATED STATEMENTS OF OPERATIONS 
 (Unaudited) 
 (In thousands, except per share data) 
                                 Fiscal Three Months     Fiscal Nine Months
                                Ended                   Ended 
                                 July 28,    July 29,    July 28,    July 29, 
                                2013        2012        2013        2012
 Sales                          $ 317,201   $ 298,488   $ 908,184   $ 792,322
 Cost of sales                  250,163     232,903     719,440     615,113
      Gross profit              67,038      65,585      188,744     177,209
                                21.1%       22.0%       20.8%       22.4%
 Engineering, selling, general  62,761      55,605      186,014     156,110
and administrative expenses 
 Acquisition-related costs      -           2,946       -           4,836
      Income from operations    4,277       7,034       2,730       16,263
 Interest income                29          44          101         100
 Interest expense               (5,159)     (4,203)     (17,624)    (10,589)
 Debt extinguishment costs,     (21,491)    (6,437)     (21,491)    (6,437)
net 
 Other income (expense), net    219         (368)       859         11
 Loss before income taxes       (22,125)    (3,930)     (35,425)    (652)
 Provision (benefit) for        (9,933)     (663)       (14,264)    705
income taxes 
                                44.9%       16.9%       40.3%       -108.1%
 Net loss                       $ (12,192)  $           $ (21,161)  $  
                                            (3,267)                 (1,357)
 Convertible preferred stock    -           -           -           16,352
dividends and accretion 
 Convertible preferred stock    -           -           -           11,878
beneficial conversion feature 
 Convertible preferred stock    -           48,803      -           48,803
amendment 
 Net loss applicable to common  $ (12,192)  $ (52,070)  $ (21,161)  $ (78,390)
shares 
 Loss per common share: 
    Basic                       $           $           $           $    
                                (0.19)      (2.74)      (0.62)      (4.16)
    Diluted                     $           $           $           $    
                                (0.19)      (2.74)      (0.62)      (4.16)
 Weighted average number of
common shares outstanding: 
    Basic                       64,217      18,997      34,290      18,830
    Diluted                     64,217      18,997      34,290      18,830
 Increase in sales              6.3%                    14.6%
 Gross profit percentage        21.1%       22.0%       20.8%       22.4%
 Engineering, selling, general
and administrative expenses     19.8%       18.6%       20.5%       19.7%
percentage 

 

 NCI BUILDING SYSTEMS, INC. 
 CONSOLIDATED BALANCE SHEETS 
 (In thousands) 
                                              July 28,         October 28, 
                                             2013             2012
                                              (Unaudited) 
 ASSETS 
  Cash and cash equivalents                  $       16,149   $       55,158
  Restricted cash                            -                1,375
  Accounts receivable, net                   118,905          133,475
  Inventories, net                           135,201          106,015
  Deferred income taxes                      36,933           21,926
  Income tax receivable                      2,068            549
  Prepaid expenses and other                 21,709           16,864
  Investments in debt and equity securities, 4,601            4,076
 at market 
  Assets held for sale                       2,879            2,397
              Total current assets           338,445          341,835
  Property, plant and equipment, net         262,118          268,875
  Goodwill                                   75,226           76,746
  Intangible assets, net                     49,989           53,028
  Deferred financing costs, net              4,538            11,000
              Total assets                   $     730,316    $     751,484
 LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) 
  Current portion of long-term debt          $         2,384  $         2,500
  Note payable                               835              515
  Accounts payable                           103,707          113,177
  Accrued compensation and benefits          40,641           43,066
  Accrued interest                           255              345
  Other accrued expenses                     56,316           60,455
              Total current liabilities      204,138          220,058
  Long-term debt, net                        240,991          234,444
  Deferred income taxes                      35,592           35,565
  Other long-term liabilities                11,866           11,995
              Total long-term liabilities    288,449          282,004
  Series B cumulative convertible            -                619,950
 participating preferred stock 
  Common stock                               1,466            925
  Additional paid-in capital                 634,011          4,991
  Accumulated deficit                        (391,011)        (369,850)
  Accumulated other comprehensive loss       (6,645)          (6,568)
  Treasury stock, at cost                    (92)             (26)
              Stockholders' equity           237,729          (370,528)
             (deficit) 
              Total liabilities and          $     730,316    $     751,484
             stockholders' equity (deficit) 

 

 

NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
                                            Fiscal Nine Months Ended 
                                           July 28, 2013     July 29, 2012 
Cash flows from operating activities:
      Net loss                             $      (21,161)  $          (1,357)
      Adjustments to reconcile net loss to
net cash (used in) provided by operating
activities:
            Depreciation and amortization  29,991           21,992
            Share-based compensation       10,335           6,183
expense
            Non-cash debt extinguishment   17,582           6,436
costs
            (Gain) loss on sale of         (38)             20
property, plant and equipment
            Provision for doubtful         1,424            (409)
accounts
            Provision (benefit) from       (14,865)         86
deferred income taxes
      Changes in operating assets and
liabilities, net of effect of
acquisitions:
            Accounts receivable            13,146           5,143
            Inventories                    (29,186)         (16,330)
            Income tax receivable          (1,859)          (146)
            Prepaid expenses and other     (2,624)          (1,610)
            Accounts payable               (5,561)          (3,072)
            Accrued expenses               (5,160)          3,281
            Other, net                     (1,167)          28
Net cash (used in) provided by operating   (9,143)          20,245
activities
Cash flows from investing activities:
      Acquisition, net of cash acquired    -                (140,991)
      Capital expenditures                 (17,545)         (22,288)
      Proceeds from sale of property,      -                55
plant and equipment
Net cash used in investing activities      (17,545)         (163,224)
Cash flows from financing activities:
Proceeds from stock options exercised      674              -
Decrease in restricted cash                1,375            1,461
Proceeds on term loan                      -                237,499
Payments on term loan                      (10,375)         (131,325)
Payments on note payable                   (1,239)          (1,193)
Proceeds from Amended ABL Facility         5,000            -
Payment of financing costs                 (6,215)          (8,679)
Excess tax benefits from share-based       974              1
compensation arrangements
Purchase of treasury stock                 (2,438)          (1,524)
Net cash (used in) provided by financing   (12,244)         96,240
activities
Effect of exchange rate changes on cash    (77)             75
and cash equivalents
Net decrease in cash and cash equivalents  (39,009)         (46,664)
Cash and cash equivalents at beginning of  55,158           78,982
period
Cash and cash equivalents at end of period $       16,149   $          32,318

 

NCI Building Systems, Inc
Business Segments
(Unaudited)
(In thousands)
                   Three Months Ended   Three Months Ended  $           %
                   July 28, 2013        July 29, 2012       Inc/(Dec)   Change
                                % of                % of 
                                Total               Total
Sales:                          Sales               Sales
     Metal coil    $    56,478  15      $   54,342  15      $     2,136 3.9%
coating
     Metal         161,008      43      142,092     39      18,916      13.3%
components
     Engineered    158,369      42      164,265     46      (5,896)     -3.6%
building systems
          Total    375,855      100     360,699     100     15,156      4.2%
sales
     Less:         58,654       16      62,211      17      (3,557)     -5.7%
Intersegment sales
          Total    $  317,201   84      $ 298,488   83      $   18,713  6.3%
net sales
                                 % of                % of 
Operating income                Sales               Sales
(loss):
     Metal coil    $      5,521 10      $     5,112 9       $           8.0%
coating                                                      409
     Metal         8,054        5       9,372       7       (1,318)     -14.1%
components
     Engineered    6,123        4       9,078       6       (2,955)     -32.6%
building systems
     Corporate     (15,421)     -       (16,528)    -       1,107       6.7%
          Total
operating income   $      4,277 1       $     7,034 2       $   (2,757) -39.2%
(loss) (% of
sales)
                   Nine Months Ended    Nine Months Ended   $           %
                    July 28, 2013        July 29, 2012      Inc/(Dec)   Change
                                % of                % of 
                                Total               Total
Sales:                          Sales               Sales
     Metal coil    $  155,539   15      $ 152,264   16      $     3,275 2.2%
coating
     Metal         462,075      43      354,586     37      107,489     30.3%
components
     Engineered    454,030      42      453,278     47      752         0.2%
building systems
          Total    1,071,644    100     960,128     100     111,516     11.6%
sales
     Intersegment  163,460      15      167,806     17      (4,346)     -2.6%
sales
          Total    $  908,184   85      $ 792,322   83      $ 115,862   14.6%
net sales
                                 % of                % of 
Operating income                Sales               Sales
(loss):
     Metal coil    $    15,818  10      $   15,304  10      $           3.4%
coating                                                      514
     Metal         19,263       4       23,931      7       (4,668)     -19.5%
components
     Engineered    14,360       3       23,414      5       (9,054)     -38.7%
building systems
     Corporate     (46,711)     -       (46,386)    -       (325)       -0.7%
          Total
operating income   $      2,730 0       $   16,263  2       $ (13,533)  -83.2%
(loss) (% of
sales)

 

NCI BUILDING SYSTEMS, INC.
BUSINESS SEGMENTS
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)
EXCLUDING SPECIAL CHARGES
FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012
(Unaudited)
(In thousands)
                       For the Three Months Ended July 28, 2013 
                       Metal     Metal        Engineered
                      Coil      Components   Building      Corporate    Consolidated 
                      Coating                Systems 
 Operating income     $         $            $                         $        
 (loss), GAAP basis    5,521     8,054        6,123       $  (15,421)   4,277
 (2)
                       For the Three Months Ended July 29, 2012 
                       Metal     Metal        Engineered
                      Coil      Components   Building      Corporate    Consolidated 
                      Coating                Systems 
 Operating income     $         $            $            $  (16,528)  $        
 (loss), GAAP basis    5,112     9,372        9,078                     7,034
 Acquisition-related  -         -            -            2,946        2,946
 costs
 "Adjusted"           $         $            $                         $        
 operating income      5,112     9,372        9,078       $  (13,582)   9,980
 (loss) (1)

    The Company discloses a tabular comparison of "Adjusted" operating income
    (loss), which is a non-GAAP measure because it is instrumental in
(1) comparing the results from period to period.  "Adjusted" operating income
    (loss) should not be considered in isolation or as a substitute for
    operating income (loss) as reported on the face of our statement of
    operations.
(2) The Company did not incur any special charges during the three months
    ended July 28, 2013.

 

 

NCI BUILDING SYSTEMS, INC.
BUSINESS SEGMENTS
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)
EXCLUDING SPECIAL CHARGES
FOR THE NINE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012
(Unaudited)
(In thousands)
                       For the Nine Months Ended July 28, 2013 
                       Metal     Metal        Engineered
                      Coil      Components   Building      Corporate    Consolidated 
                      Coating                Systems 
 Operating income     $         $            $                         $        
 (loss), GAAP basis    15,818    19,263      14,360       $  (46,711)  2,730
 (2)
                       For the Nine Months Ended July 29, 2012 
                       Metal     Metal        Engineered
                      Coil      Components   Building      Corporate    Consolidated 
                      Coating                Systems 
 Operating income     $         $            $            $  (46,386)  $       16,263
 (loss), GAAP basis    15,304    23,931      23,414
 Acquisition-related  -         -            -            4,836        4,836
 costs
 Actuarial
 determined general
 liability            -         (1,929)      -            -            (1,929)
 self-insurance
 charges (recovery)
 Executive            -         -            -            508          508
 retirement
 "Adjusted"           $         $            $    
 operating income      15,304    22,002      23,414       $  (41,042)  $       19,678
 (loss) (1)

    The Company discloses a tabular comparison of "Adjusted" operating income
    (loss), which is a non-GAAP measure because it is  instrumental in
(1) comparing the results from period to period.  "Adjusted" operating income
    (loss) should not be considered in isolation or as a substitute for
    operating income (loss) as reported on the face of our statement of
    operations.
(2) The Company did not incur any special charges during the nine months ended
    July 28, 2013.

 

 

 

NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,
AMORTIZATION AND OTHER NONCASH ITEMS ("ADJUSTED EBITDA")
(Unaudited)
(In thousands)
                       4th Qtr    1st Qtr    2nd Qtr    3rd Qtr     Trailing
                                                                    12 Months
                        October    January    April      July 28,    July 28, 
                       28,        27,        28, 
                       2012       2013       2013       2013        2013
                       $          $          $                      $        
Net income (loss)      6,270       (3,627)    (5,342)   $(12,192)        
                                                                     (14,891)
Add:
     Depreciation and  10,355     9,122      8,809      9,066       37,352
amortization
     Consolidated      6,226      6,244      6,149      5,130       23,749
interest expense, net
     Provision
(benefit) for income   3,379      (1,825)    (2,506)    (9,933)     (10,885)
taxes
    
Acquisition-related    153        -          -          -           153
costs
     Debt
extinguishment costs,  -          -          -          21,491      21,491
net
     Non-cash charges:
          Stock-based  3,116      3,442      3,445      3,448       13,451
compensation
          Asset        13         -          -          -           13
impairments 
          Embedded     (5)        (5)        (4)        (50)        (64)
derivative
     Adjusted EBITDA   $          $                                 $        
(1)                    29,507     13,351     $  10,551  $  16,960          
                                                                     70,369
                       4th Qtr    1st Qtr    2nd Qtr    3rd Qtr     Trailing
                                                                    12 Months
                        October    January    April      July 29,    July 29, 
                       30,        29,        29, 
                       2011       2012       2012       2012        2012
                       $          $          $                      $        
Net income (loss)      3,411         589      1,321     $  (3,267)           
                                                                     2,054
Add:
     Depreciation and  6,753      6,158      5,841      7,248       26,000
amortization
     Consolidated      3,685      3,296      3,034      4,159       14,174
interest expense, net
     Provision
(benefit) for income   398        426        942        (663)       1,103
taxes
    
Acquisition-related    -          396        1,494      2,946       4,836
costs
     Debt
extinguishment costs,  -          -          -          6,437       6,437
net
     Cash              283        -          -          -           283
restructuring charges 
     Executive         -          -          508        -           508
retirement
     Non-cash charges:
          Stock-based  1,776      1,972      2,119      2,090       7,957
compensation
          Asset
impairments            1,214      -          -          (22)        1,192
(recoveries)
          Embedded     (6)        (5)        (6)        (5)         (22)
derivative
     Adjusted EBITDA   $          $                                 $        
(1)                    17,514     12,832     $  15,253  $  18,923          
                                                                     64,522

    The Company's Credit Agreement defines adjusted EBITDA.  Adjusted EBITDA
    excludes non-cash charges for goodwill and other asset impairments and
    stock compensation as well as certain non-recurring charges.   As such,
    the historical information is presented in accordance with the definition
    above. Concurrent with the amendment and restatement of the Term Note
(1) facility, the Company entered into an Asset-Backed Lending facility which
    has substantially the same definition of adjusted EBITDA except that the
    ABL facility caps certain non-recurring charges.  The Company is
    disclosing adjusted EBITDA, which is a non-GAAP measure, because it is
    used by management and provided to investors to provide comparability of
    underlying operational results.

 

 

 

NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
"ADJUSTED" LOSS PER DILUTED COMMON SHARE AND NET LOSS COMPARISON 
(Unaudited)
                           Fiscal Three Months Ended  Fiscal Nine Months Ended
                            July 28,     July 29,      July 28,     July 29, 
                           2013         2012          2013         2012
Net loss per diluted       (0.19)       (2.74)        (0.62)       (4.16)
common share, GAAP basis
Convertible preferred
stock beneficial           -            2.57          -            3.22
conversion feature and
amendment
Acquisition-related costs, -            0.14          -            0.20
net of taxes
Debt extinguishment costs, 0.21         0.21          0.39         0.21
net of taxes
Actuarial determined
general liability          -            -             -            (0.06)
self-insurance charges
(recovery), net of taxes
Executive retirement, net  -            -             -            0.02
of taxes
Adjustment for
participating securities   -            (0.13)        -            -
interest in earnings, net
of taxes
"Adjusted" net income
(loss) per diluted common  0.02         0.05          (0.23)       (0.57)
share (1)
                           Fiscal Three Months Ended  Fiscal Nine Months Ended
                            July 28,     July 29,      July 28,     July 29, 
                           2013         2012          2013         2012
Net loss applicable to     $(12,192)    $(52,070)     $(21,161)    $(78,390)
common shares, GAAP basis
Convertible preferred
stock beneficial           -            48,803        -            60,681
conversion feature and
amendment
Acquisition-related costs, -            2,683         -            3,847
net of taxes
Debt extinguishment costs, 13,238       3,965         13,238       3,965
net of taxes
Actuarial determined
general liability          -            -             -            (1,188)
self-insurance charges
(recovery), net of taxes
Executive retirement, net  -            -             -            313
of taxes
Adjustment for
participating securities   -            (2,458)       -            -
interest in earnings, net
of taxes
"Adjusted" net income
(loss) applicable to       $    1,046   $       923   $  (7,923)   $(10,772)
common shares (1)

    The Company discloses a tabular comparison of "Adjusted" net income (loss)
    per diluted common share and "Adjusted" net income (loss) applicable to
    common shares, which are non-GAAP measures, because they are referred to
    in the text of our press releases and are instrumental in comparing the
(1) results from period to period.  "Adjusted" net income (loss) per diluted
    common share and "Adjusted" net income (loss) applicable to common shares
    should not be considered in isolation or as a substitute for net loss per
    diluted common share and net loss applicable to common shares as reported
    on the face of our statement of operations.

 

 

 NCI Building Systems, Inc. 
 Reconciliation of Segment Sales to Third Party Segment Sales (Internal
Information) 
(Unaudited)
(In thousands)
                                                                      %
                             3rd Qtr         3rd Qtr       Inc/(Dec)   Change 
                            2013            2012 
 Metal Coil Coating 
  Total Sales               56,478    15%   54,342   15%  2,136       3.9%
  Less: Intersegment sales  33,450          34,927        (1,477)     -4.2%
  Third Party Sales         23,028    7%    19,415   7%   3,613       18.6%
  Operating Income (Loss)   5,521     24%   5,112    26%  409         8.0%
 Metal Components 
  Total Sales               161,008   43%   142,092  39%  18,916      13.3%
  Less: Intersegment sales  20,567          22,278        (1,711)     -7.7%
  Third Party Sales         140,441   44%   119,814  40%  20,627      17.2%
  Operating Income (Loss)   8,054     6%    9,372    8%   (1,318)     -14.1%
 Engineered Building
Systems 
  Total Sales               158,369   42%   164,265  46%  (5,896)     -3.6%
  Less: Intersegment sales  4,637           5,006         (369)       -7.4%
  Third Party Sales         153,732   49%   159,259  53%  (5,527)     -3.5%
  Operating Income (Loss)   6,123     4%    9,078    6%   (2,955)     -32.6%
 Consolidated 
  Total Sales               375,855   100%  360,699  100% 15,156      4.2%
  Intersegment              58,654          62,211        (3,557)     -5.7%
  Third Party Sales         317,201   100%  298,488  100% 18,713      6.3%
  Operating Income (Loss)   4,277     1%    7,034    2%   (2,757)     -39.2%
                             YTD             YTD                      %
                             3rd Qtr         3rd Qtr       Inc/(Dec)  Change
                            2013            2012 
 Metal Coil Coating 
  Total Sales               155,539   15%   152,264  16%  3,275       2.2%
  Less: Intersegment sales  91,403          93,039        (1,636)     -1.8%
  Third Party Sales         64,136    7%    59,225   7%   4,911       8.3%
  Operating Income (Loss)   15,818    25%   15,304   26%  514         3.4%
 Metal Components 
  Total Sales               462,075   43%   354,586  37%  107,489     30.3%
  Less: Intersegment sales  55,925          62,152        (6,227)     -10.0%
  Third Party Sales         406,150   45%   292,434  37%  113,716     38.9%
  Operating Income (Loss)   19,263    5%    23,931   8%   (4,668)     -19.5%
 Engineered Building
Systems 
  Total Sales               454,030   42%   453,278  47%  752         0.2%
  Less: Intersegment sales  16,132          12,615        3,517       27.9%
  Third Party Sales         437,898   48%   440,663  56%  (2,765)     -0.6%
  Operating Income (Loss)   14,360    3%    23,414   5%   (9,054)     -38.7%
 Consolidated 
  Total Sales               1,071,644 100%  960,128  100% 111,516     11.6%
  Less: Intersegment sales  163,460         167,806       (4,346)     -2.6%
  Third Party Sales         908,184   100%  792,322  100% 115,862     14.6%
  Operating Income (Loss)   2,730     0%    16,263   2%   (13,533)    -83.2%

 

 

SOURCE NCI Building Systems, Inc.

Website: http://www.ncigroup.com
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