2014

NCI Building Systems Reports First Quarter Fiscal 2012 Results -- Revenues Increased 28% to $244 Million; Volume Was Up 14% --

-- Adjusted EBITDA Was Up 383% to $12 Million --

-- All Three Business Units Posted Substantial Growth in Revenues and Operating Profits --

-- Bookings Grew 16%; Backlog Increased to $222 Million --

HOUSTON, March 6, 2012 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the first quarter ended January 29, 2012.

First Quarter 2012 Financial Results

"This was our best first quarter performance since 2008 and represents an excellent start to fiscal 2012," commented Norman C. Chambers, Chairman, President and Chief Executive Officer. "We achieved double-digit revenue growth in each of our business segments, driven by higher volumes, firmer prices and excellent execution. Significant operating leverage, resulting from the efficiencies gained in our manufacturing, engineering and supply chain operations over the last several years, led to substantial increase in adjusted EBITDA and a positive swing in operating income of $18 million for the quarter. Our companywide 14% volume increase reflected improved demand from certain sectors of our addressable market and mild weather conditions that resulted in some shipment pull-through, benefiting first quarter results. Our volume growth compared favorably with the 5.4% decline in new starts in the nonresidential construction market measured in square feet, as reported by McGraw-Hill."

"Each of our three business segments grew faster than their respective markets, taking advantage of opportunities to capture additional business, broaden end markets and extend geographical reach. Revenue growth was again led by our Buildings group, which posted a 38% increase in sales, and its first quarter bookings were 16% above the comparable year-ago period. Backlog at the end of the quarter reached $222 million, up 3.2% sequentially and 8.4% year-over-year. Similar to recent quarters, the rate of converting backlog into production was approximately 30% faster than the same period of 2010. This reflected the greater proportion of 'book for production' projects in our backlog and our progress in shortening delivery times."

"Operating profitability increased substantially from last year's first quarter at each of our business segments, where higher volumes and ongoing efficiencies resulted in double-digit declines in engineering, selling, general and administrative (ESG&A) costs per ton," Mr. Chambers said.

For the first quarter, sales were $243.6 million, up 28% from the $190.1 million reported in last year's first quarter. The gross profit margin was 22%, compared to 17.6% in the year-ago first quarter.

Engineering, selling, general and administrative expenses were $49.3 million, or 20.3% of revenues, compared to $47.7 million, or 25.1% of revenues, in last year's first quarter. The Company reported an operating profit of $4.3 million, a significant improvement over the adjusted operating loss of $12.8 million incurred in the comparable 2011 period. Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization, and cash and other non-cash items, in accordance with the Company's bank credit agreement, was $12.4 million compared to negative $4.4 million in last year's first quarter.

For the first quarter of 2012, the Company reported net income of $589,000. Including the accrual of preferred stock dividends and accretion of $6.6 million and a non-cash beneficial conversion feature charge of $4 million, the net loss applicable to common shares was $10 million. In last year's first quarter, the Company incurred a net loss of $12.7 million and a net loss applicable to common shares of $20.7 million, which included the accrual of preferred stock dividends and accretion of $6.2 million and a non-cash beneficial conversion feature charge of $1.8 million.

The adjusted loss per diluted common share, excluding the non-cash beneficial conversion charge and other special items, was $0.32; the reported net loss per diluted share was $0.54. This compares to an adjusted net loss per diluted share of $0.99 and a reported net loss per diluted share of $1.14 in last year's first quarter. The weighted average number of common shares used in the calculation of first quarter 2012 per share amounts was 18.7 million compared to 18.1 million last year.

Inventory levels increased 22.3% over the same period of the prior year to $102.1 million, reflecting approximately 10% more volume to support the increased activity levels and approximately 12% higher raw material unit costs. Annualized inventory turnover was 7.9 turns for the first quarter compared to 7.5 turns year-over-year and 8.9 turns sequentially.

Capital expenditures were $5.8 million; net cash from operating activities was negative $4.2 million.

First Quarter Segment Performance

The Company reported an operating profit of $4.3 million, which is a significant improvement over the adjusted operating loss of $12.8 million incurred in the comparable period of the prior year.

"Each of our three business segments contributed to the strong improvement in operating results in the 2012 first quarter," Mr. Chambers said.

Third-party revenues for the Coatings group increased 18% year-over-year, reflecting its continued success in opening and penetrating new end markets. The group's geographic reach, will be further enhanced when the new Middletown coating facility becomes operational in 2013. Operating income increased 54%, reflecting higher volumes from both external and intersegment demand and the benefits of ongoing efficiency enhancements.

The Components group's third-party revenues increased 18% in the first quarter as compared to the year-ago period, benefiting from improved demand from certain manufacturing sectors and growth in new products, particularly insulated metal panels. Operating income of $5.5 million increased significantly due to the higher activity levels and reduced operating costs this quarter. This performance represents substantial improvement as compared to a very difficult first quarter last year, when the segment was only modestly profitable.

The Buildings group's third-party revenues increased 38% year-over-year, and operating profit was $7.6 million, representing a $12.8 million improvement over the prior year's adjusted loss. This significant turnaround reflected revenue benefits from improved demand in the manufacturing, warehousing and energy sectors of the market and recognition of our value-add to builders and profitability improvement from the production efficiencies that we continue to achieve.

Market Commentary

In the first quarter of our fiscal 2012, low-rise nonresidential construction activity measured in square feet declined 6.4% from the comparable period in fiscal 2011, as reported by McGraw-Hill.

The American Institute of Architects' Architectural Billing Index published for January 2012 was 50.9 and the commercial and industrial component of the Index remained above 50 for the fifth consecutive month.

McGraw-Hill is currently forecasting that nonresidential construction activity measured in square feet will be 2% higher in calendar 2012 compared to calendar 2011. McGraw-Hill projects CY 2012 square footage at 685 million, up from 673 million in 2011, with most of the increase taking place in the second half of the calendar year. 

Summary and Outlook

"Our strong first quarter performance has set the stage for a fiscal 2012 first half that will show a marked improvement over the similar period in fiscal 2011 across key financial metrics, including revenues, Adjusted EBITDA, and operating income. This will all occur despite the lack of a meaningful recovery in business conditions in the nonresidential construction market. The progress we are making is being driven by the ability of each of our business units to capitalize on the modest uptick in demand from certain market sectors, develop new products and enter new markets, and reduce our costs per ton through the cumulative effects of our ongoing efficiency programs," Mr. Chambers said.

"We expect to enter the seasonally stronger second half of fiscal 2012 in an excellent position to benefit from the modest improvement in demand from our end markets that is projected by industry analysts," Mr. Chambers concluded.

The NCI Building Systems, Inc. first quarter conference call is scheduled for March 6, 2012, at 5:00 PM ET. Please call 1-412-858-4600 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.ncilp.com. To access the taped replay, please dial 1-412-317-0088 and the passcode 10009517# when prompted. The Webcast archive and taped replay will both be available two hours after the call through March 13, 2012.

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.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act. These statements and other statements identified by 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; 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 30, 2011, 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)







For the Three Months Ended


January 29,


January 30,


2012


2011





Sales

$      243,603


$      190,086

Cost of sales

189,981


156,541

     Gross profit

53,622


33,545


22.0%


17.6%





Engineering, selling, general and administrative expenses

49,337


47,681

     Income (loss) from operations

4,285


(14,136)





Interest income

28


47

Interest expense

(3,324)


(4,224)

Other income, net

26


579





Income (loss) before income taxes

1,015


(17,734)

Provision (benefit) for income taxes

426


(5,009)


42.0%


28.2%





Net income (loss)

$             589


$       (12,725)

Convertible preferred stock dividends and accretion

6,608


6,230

Convertible preferred stock beneficial conversion feature

4,020


1,786

Net loss applicable to common shares

$       (10,039)


$       (20,741)









Loss per common share:




   Basic

$           (0.54)


$           (1.14)

   Diluted

$           (0.54)


$           (1.14)





Weighted average number of common shares outstanding:




   Basic

18,693


18,149

   Diluted

18,693


18,149





Increase in sales

28.2%







Gross profit percentage

22.0%


17.6%





Engineering, selling, general and administrative




   expenses percentage

20.3%


25.1%



NCI BUILDING SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)











January 29,


October 30,




2012


2011




(Unaudited)



ASSETS






Cash and cash equivalents

$         66,706


$         78,982


Restricted cash

2,837


2,836


Accounts receivable, net

79,722


95,381


Inventories, net

102,055


88,531


Deferred income taxes

20,168


20,405


Income tax receivable

1,123


1,272


Prepaid expenses and other

14,916


14,847


Investments in debt and equity securities, at market

4,228


4,483


Assets held for sale

4,875


4,874



Total current assets

296,630


311,611








Property plant and equipment, net

208,659


208,514


Goodwill  

5,200


5,200


Intangible assets, net

23,739


24,254


Other assets

10,387


11,575



Total assets

$       544,615


$       561,154







LIABILITIES AND STOCKHOLDERS' DEFICIT  





Note payable

$                 -


$              292


Accounts payable

79,322


88,158


Accrued compensation and benefits

30,320


34,616


Accrued interest

346


1,309


Other accrued expenses

47,031


49,668



Total current liabilities

157,019


174,043








Long-term debt

130,199


130,699


Deferred income taxes

7,378


7,312


Other long-term liabilities

10,076


10,081



Total long-term liabilities

147,653


148,092








Series B cumulative convertible participating preferred stock

280,558


273,950








Redeemable common stock  

179


759








Common stock

924


924


Additional paid-in capital

233,148


237,244


Accumulated deficit

(266,307)


(266,896)


Accumulated other comprehensive loss

(5,579)


(5,485)


Treasury stock, at cost

(2,980)


(1,477)



Total stockholders' deficit

(40,794)


(35,690)









Total liabilities and stockholders' deficit

$       544,615


$       561,154



NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)







For the Three Months Ended


January 29, 2012


January 30, 2011





Cash flows from operating activities:




     Net income (loss)

$                       589


$             (12,725)

     Adjustments to reconcile net income (loss) to net cash used in




           operating activities:




           Depreciation and amortization

7,371


8,449

           Share-based compensation expense

1,972


1,685

           (Gain) loss on sale of property, plant and equipment

2


(18)

           Provision for doubtful accounts

(6)


457

           Provision (benefit) from deferred income taxes

292


(5,035)

     Changes in working capital:




           Accounts receivable

15,204


19,523

           Inventories

(13,524)


(2,062)

           Income tax receivable

174


366

           Prepaid expenses and other

591


(642)

           Accounts payable

(8,836)


(6,990)

           Accrued expenses

(7,987)


(2,892)

           Other, net

(47)


(448)





Net cash used in operating activities

(4,205)


(332)





Cash flows from investing activities:




     Capital expenditures

(5,770)


(2,247)

     Proceeds from sale of property, plant and equipment

25


41





Net cash used in investing activities

(5,745)


(2,206)





Cash flows from financing activities:




Decrease of restricted cash

(1)


(2)

Excess tax benefits from share-based compensation arrangements

-


464

Payment of cash dividends on Convertible Preferred Stock

-


(5,550)

Payments on term loan

(500)


(2,750)

Payments on note payable

(292)


(289)

Payment of financing costs

(25)


(50)

Purchase of treasury stock

(1,503)


(1,478)





Net cash used in financing activities

(2,321)


(9,655)





Effect of exchange rate changes on cash and cash equivalents

(5)


(10)





Net decrease in cash and cash equivalents

(12,276)


(12,203)





Cash and cash equivalents at beginning of period

78,982


77,419





Cash and cash equivalents at end of period

$                  66,706


$               65,216







NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

(Unaudited)

(In thousands)





















Three Months Ended


Three Months Ended


$

%


January 29, 2012


January 30, 2011


Inc/(Dec)

Change



% of



% of






Total


Total



Sales:


Sales



Sales




Metal coil coating

$   49,083

16


$   42,274

18


$   6,809

16.1%

Metal components

105,752

36


90,305

39


15,447

17.1%

Engineered building systems

140,298

48


101,412

43


38,886

38.3%

Total sales

295,133

100


233,991

100


61,142

26.1%

Less: Intersegment sales

51,530

17


43,905

19


7,625

17.4%

Total net sales

$ 243,603

83


$ 190,086

81


$ 53,517

28.2%












% of



% of






Total


Total




Operating income (loss):


Sales



Sales




Metal coil coating

$     5,302

11


$     3,444

8


$   1,858

53.9%

Metal components

5,541

5


353

0


5,188

1469.7%

Engineered building systems

7,596

5


(5,410)

(5)


13,006

240.4%

Corporate

(14,154)

-


(12,523)

-


(1,631)

-13.0%

Total operating income (loss) (% of net sales)

$     4,285

2


$ (14,136)

(7)


$ 18,421

130.3%












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 January 29, 2012 and January 30, 2011

(Unaudited)

(In thousands)













For the Three Months Ended January 29, 2012


Metal Coil Coating


Metal Components


Engineered
Building
Systems


Corporate


Consolidated











Operating income (loss), GAAP basis

$      5,302


$           5,541


$                    7,596


$   (14,154)


$             4,285

Pre-acquisition contingency adjustment

-


-


-


-


-

Increase in actuarial determined general liability










   self-insurance reserve

-


-


-


-


-

"Adjusted" operating income (loss) (1)

$      5,302


$           5,541


$                    7,596


$   (14,154)


$             4,285






















For the Three Months Ended January 30, 2011


Metal Coil Coating


Metal Components


Engineered
Building
Systems


Corporate


Consolidated











Operating income (loss), GAAP basis

$      3,444


$              353


$                  (5,410)


$   (12,523)


$         (14,136)

Pre-acquisition contingency adjustment

-


-


252


-


252

Increase in actuarial determined general liability










   self-insurance reserve

-


1,101


-


-


1,101

"Adjusted" operating income (loss) (1)

$      3,444


$           1,454


$                  (5,158)


$   (12,523)


$         (12,783)





















(1)  The Company discloses a tabular comparison of "Adjusted" operating income (loss), which is a non-GAAP measure because it is instrumental

      in 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 consolidated statement of operations.







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)


















2nd Qtr


3rd Qtr


4th Qtr


1st Qtr


Trailing 12 Months


May 1,


July 31,


October 30,


January 29,


January 29,


2011


2011


2011


2012


2012

Net income (loss)

$ (3,229)


$       2,593


$           3,411


$             589


$                     3,364

Add:










    Depreciation and amortization

7,187


7,187


6,753


6,158


27,285

    Consolidated interest expense, net

3,870


3,864


3,685


3,296


14,715

    Provision (benefit) for income taxes

(1,786)


-


398


426


(962)

    Non-cash charges:










         Stock-based compensation

1,671


1,776


1,776


1,972


7,195

         Asset impairments (recoveries)

-


(93)


1,214


-


1,121

         Embedded derivative

(6)


(6)


(6)


(5)


(23)

         Pre-acquisition contingency adjustment

-


-


-


-


-

    Cash restructuring charges (recoveries)

-


(575)


283


-


(292)











    Adjusted EBITDA (1)

$  7,707


$     14,746


$         17,514


$        12,436


$                   52,403
































2nd Qtr


3rd Qtr


4th Qtr


1st Qtr


Trailing 12 Months


May 2,


August 1,


October 31,


January 30,


January 30,


2010


2010


2010


2011


2011

Net loss

$ (7,656)


$      (3,299)


$         (5,436)


$       (12,725)


$                  (29,116)

Add:










    Depreciation and amortization

7,480


7,457


7,309


7,236


29,482

    Consolidated interest expense, net

4,670


4,392


4,258


4,177


17,497

    Benefit from income taxes

(5,536)


(221)


(1,794)


(5,009)


(12,560)

    Non-cash charges:










         Stock-based compensation

1,403


1,374


1,375


1,685


5,837

         Asset impairments (recoveries)

(116)


(64)


221


-


41

         Embedded derivative

(4)


(7)


(7)


(7)


(25)

         Pre-acquisition contingency adjustment

-


-


178


252


430

    Cash restructuring charges

829


551


1,628


-


3,008

    Transaction costs

-


-


(250)


-


(250)






-





    Adjusted EBITDA (1)

$  1,070


$     10,183


$           7,482


$         (4,391)


$                   14,344





















(1) On October 20, 2009, the Company amended and restated its Term Note facility which defines adjusted EBITDA.  Adjusted EBITDA excludes non-cash charges

     for goodwill and other asset impairments, lower of cost or market charges 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

     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


January 29,

January 30,


2012

2011

Loss per diluted common share, GAAP basis

$           (0.54)

$           (1.14)

Convertible preferred stock beneficial conversion feature

0.22

0.10

Gain on embedded derivative, net of taxes

(0.00)

(0.00)

Increase in actuarial determined general liability self-insurance reserve, net of taxes

-

0.04

Pre-acquisition contingency adjustment, net of taxes

-

0.01

"Adjusted" loss per diluted common share (1)

$           (0.32)

$           (0.99)








Fiscal Three Months Ended


January 29,

January 30,


2012

2011

Net loss applicable to common shares, GAAP basis

$       (10,039)

$       (20,741)

Convertible preferred stock beneficial conversion feature

4,020

1,786

Gain on embedded derivative, net of taxes

(3)

(5)

Increase in actuarial determined general liability self-insurance reserve, net of taxes

-

790

Pre-acquisition contingency adjustment, net of taxes

-

181

"Adjusted" net loss applicable to common shares (1)

$         (6,022)

$       (17,989)










(1) The Company discloses a tabular comparison of "Adjusted" loss per diluted common share and net loss, which are non-GAAP measures,

       because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period.  "Adjusted"

       loss per diluted common share and net loss should not be considered in isolation or as a substitute for loss per diluted common share and

       net loss as reported on the face of our consolidated statement of operations.




NCI Building Systems, Inc.

Reconciliation of Segment Sales to Third Party Segment Sales (Internal Information)

(Unaudited)

(In thousands)



























%



1st Qtr 2012



1st Qtr 2011


Inc/(Dec)

Change

Metal Coil Coating









Total Sales

49,083

16%


42,274

18%

6,809

16%


Less:  Intersegment sales

28,845



25,081


3,764

15%


Third Party Sales

20,238

8%


17,193

9%

3,045

18%











Operating Income (Loss)

5,302

26%


3,444

20%

1,858

54%










Metal Components









Total Sales

105,752

36%


90,305

39%

15,447

17%


Less:  Intersegment sales

18,456



16,289


2,167

13%


Third Party Sales

87,296

36%


74,016

39%

13,280

18%











Operating Income (Loss)

5,541

6%


353

0%

5,188

1470%










Engineered Building Systems









Total Sales

140,298

48%


101,412

43%

38,886

38%


Less:  Intersegment sales

4,229



2,535


1,694

67%


Third Party Sales

136,069

56%


98,877

52%

37,192

38%











Operating Income (Loss)

7,596

6%


(5,410)

-5%

13,006

240%










Consolidated









Total Sales

295,133

100%


233,991

100%

61,142

26%


Less:  Intersegment sales

51,530



43,905


7,625

17%


Third Party Sales

243,603

100%


190,086

100%

53,517

28%











Operating Income (Loss)

4,285

2%


(14,136)

-7%

18,421

130%



SOURCE NCI Building Systems, Inc.



RELATED LINKS
http://www.ncilp.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.