NCI Building Systems Reports Second Quarter Fiscal 2013 Results

Jun 04, 2013, 16:01 ET from NCI Building Systems, Inc.

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

Second Quarter Highlights:

  • Net sales rose 17.3% to $293.4 million, compared to the same quarter last fiscal year.
  • Gross profit increased 4.9% to $60.8 million from $58.0 million.
  • Adjusted EBITDA was $10.6 million, within the range previously disclosed on May 14, 2013.
  • Net loss per diluted common share of $0.28.
  • Quarter-end backlog increased 6% to $276 million compared to the same period in fiscal 2012.
  • Clayton, Dubilier & Rice, LLC (CD&R) managed funds converted all of their preferred shares to common shares.
  • Company priced and allocated commitments with respect to the proposed refinancing of its existing $240 million term loan, which will eliminate maintenance financial covenants and reduce annual interest expense by nearly $12 million.

Norman C. Chambers, Chairman, President and Chief Executive, commented, "We delivered second quarter results in line with our preliminary disclosure on May 14, 2013. As previously discussed, while we achieved double-digit revenue growth, primarily due to last year's acquisition of Metl-Span, volumes for the quarter were below our internal expectations. Poor winter weather conditions as compared to last year's second quarter resulted in weaker year-over-year demand for nonresidential construction and the slower release of work from our backlog. We also strategically invested in additional manufacturing personnel during the quarter, which temporarily put pressure on our operating margins, but also has positioned us to capitalize on stronger anticipated demand in the second half of the year. We exited the second quarter with a growing backlog comprised of a greater percentage of higher-margin design/build projects than at the end of the same period last year, which is reflective of the success of our recent marketing and sales initiatives."

"Results across our end-markets and product categories were mixed in the second quarter. We produced strong year-over-year gains in component sales to OEM customers, as well as higher insulated metal panel sales to the commercial and industrial markets, partially offset by soft demand in the agricultural market. Our Coatings group continued to diversify its revenue sources and maintained its profitability levels during the ramp-up of the new Middletown facility, while the Buildings group was affected by lower margin mix and pricing pressures."

"We ended the second quarter with progressively improving levels of quoting activity. Leading construction indicators and McGraw-Hill data continue to point to an increase in nonresidential construction activity in the second half of our fiscal 2013. We believe that as demand picks up, we should demonstrate increasing levels of operating leverage, with a greater portion of our revenue falling to the bottom line," Mr. Chambers concluded.

Recent Developments

  • On May 14, 2013, CD&R, the holders of NCI's convertible preferred shares, converted all of their preferred shares to common shares. The conversion eliminates all outstanding convertible preferred stock and will increase stockholders' equity by approximately $620 million beginning in the third quarter of fiscal 2013.
  • On May 14, 2013, NCI announced it would seek to refinance its existing $240 million term loan. In connection with the proposed refinancing, both Standard & Poor's and Moody's upgraded the Company's corporate credit ratings. The transaction priced and commitments were allocated over the last week and is expected to close at the end of June. The transaction will extend the maturity of the Company's term loan to 2019, eliminate financial maintenance covenants and generate annual interest cost savings (including a reduction in amortized debt issuance costs and issue discount) of nearly $12 million. Early debt extinguishment charges are expected to range between $20 million and $22 million in the 2013 third quarter and include the write-off of non-cash existing deferred debt issue costs and non-cash initial issue discount as well as a 1% cash payment for early termination.

Second Quarter 2013 Results

For the second quarter, net sales grew 17.3% to $293.4 million from $250.2 million in last year's second quarter mainly due to the contribution from the Company's June 2012 Metl-Span acquisition and the success of its cross-selling initiatives.

Gross profit increased 4.9% to $60.8 million from $58.0 million. Gross profit margin narrowed to 20.7% from 23.2% in the second quarter of last year due to elevated costs related to certain investments made in the Company's operations and as the result of increased competitive pricing pressure in the seasonally weak second quarter of our fiscal 2013. Additionally, the Company incurred costs related to the ramp-up of its newly refurbished state-of the-art coating facility and its insulated metal panel facility, and there were integration costs associated with the conversion of one of NCI's existing insulated metal panel plants to incorporate Metl-Span's manufacturing process. In addition, similar to the first quarter, the Company made investments in manufacturing personnel in this fiscal year to support the higher level of activity expected in the second half of 2013.

Engineering, selling, general and administrative (ESG&A) expenses were $62.8 million up from $51.6 million, primarily reflecting the addition of Metl-Span and last year's benefit of approximately $2.9 million in legal and bad debt recoveries. Current year ESG&A expenses also included higher non-cash stock compensation expense of $1.3 million and approximately $1.5 million of unique charges. As a percentage of revenues, ESG&A was 21.4% in the 2013 second quarter compared to 20.6% in the year-ago period. The Company reported an operating loss of $1.9 million compared to an operating profit of $4.9 million in last year's second quarter.

As previously disclosed, 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 secured credit facilities was $10.6 million compared to $15.3 million reported in last year's second quarter. Please see reconciliation of Adjusted EBITDA to net income in the Company's financial statements included in this release.

For the second quarter of 2013, the Company reported a net loss of $5.3 million, or $0.28 per diluted common share. In last year's second quarter, the Company reported net income of $1.3 million, but incurred a net loss applicable to common shares of $16.3 million, or $0.86 per share, which included the accrual of preferred stock dividends and accretion of $9.7 million and a non-cash beneficial conversion feature charge of $7.9 million

Inventory levels increased 18% over the same period of the prior year to $126 million, due primarily to the acquisition of Metl-Span. Annualized inventory turnover was 7.5 turns for the second quarter compared to 7.1 turns in last year's second quarter and 8.5 turns in the first quarter of fiscal 2013.

Capital expenditures were $12.7 million for the 2013 first half, which included finalizing the refurbishment of the Middletown coating facility, integration of Metl-Span with the Company's existing operations, and investments in both manufacturing capabilities in the Coatings group and system improvements in the Buildings group. The net cash used in operating activities was $4.4 million.

Second Quarter 2013 Segment Performance

The Coatings group reported that total sales and third party sales increased 2% and 12% year-over-year, respectively. Operating income dipped 3% to $4.8 million in the second quarter of 2013, compared to the second quarter last fiscal year primarily as the result of start-up costs for the new plant. The ramp-up of the Middletown, Ohio plant is progressing well, and the facility remains on track to be incrementally profitable in the fiscal 2013 fourth quarter.

The Components group increased total sales by 38% year-over-year and produced a 51% increase in third-party sales, demonstrating the benefits of the Metl-Span acquisition. Year-over-year operating income declined to $5.1 million from $9.0 million in the same quarter last fiscal year, as a result of several factors – increased pricing pressure in the seasonally weaker period, an unfavorable comparison to the prior year, which included $2.9 million of benefit from legal and bad debt recoveries, $1.3 million of current year investments in growth initiatives, $1.7 million of integration costs and investments for the Metl-Span acquisition and the ramp-up of the new Mattoon, Illinois panel plant.

The Buildings group's total sales were flat with last year's second quarter results, and third-party sales were down approximately 2%. Sales and margins were both impacted by pricing pressures associated with the seasonally weak second quarter, and the impact was exacerbated by notably poor weather conditions for construction activity as compared to last year's second quarter. Operating profit declined 38% to $4.2 million due to the aforementioned reasons, as well as investments made in additional manufacturing personnel to support an expected higher level of activity in the second half of 2013.

Market Commentary

Most leading indicators for nonresidential construction activity remain positive. These indicators include a burgeoning residential recovery, which historically precedes a nonresidential recovery, declining nonresidential vacancy rates, at levels in line with the previous cyclical recovery, favorable lending standards for nonresidential construction, comparable to the high growth period of the 1990's, and improving jobs data. One of the most encouraging data points is the marked improvement in April in the Dodge Momentum Index, which is at its highest level since 2008. All of these factors are in support of the early stages of a nonresidential construction recovery, with 2012 new construction starts measured in square feet of 753 million, up 7% from 2011, but well below average new starts over the last 40 years of approximately 1.3 billion square feet.

The American Institute of Architects' Architecture Billing Index (ABI) for the Commercial/Industrial (C/I) sector fell to 49 for the month of April. The C/I sector billing index has historically demonstrated a strong correlation to nonresidential construction starts. During the first year of the last cyclical recovery (2004-2007), the ABI experienced six consecutive months above 50 (indicating demand growth) followed by five consecutive months below 50 before the recovery firmly took hold. As a result, the recent dip in the ABI, which followed six consecutive months above 50, is not unexpected. 

In the second quarter of NCI's fiscal 2013, low-rise nonresidential construction starts (measured in square feet) increased by 1.6% from the comparable period in fiscal 2012, as reported by McGraw-Hill. McGraw-Hill continues to project that calendar year 2013 square footage will be approximately 800 million, up from the 753 million square feet reported in 2012, with most of the increase taking place in the second half of the calendar year.

Summary/Outlook

"Our performance improved throughout the fiscal second quarter, concluding with a profitable April," noted Mr. Chambers. "At the end of the period, the Buildings group had improved its backlog year-over-year by 10% in volume and 6% in value. The more recent additions to backlog in the period reflected an increased level of design/build projects with improved pricing. The Components group delivered significant growth in Commercial/Industrial sector sales for insulated metal panels. In addition, sales of core roofing and sidewall products to NCI's largest OEM customers showed meaningful quarterly growth for the first time since 2009. In the Coatings group, the Middletown, Ohio light gauge paint line continued to increase production and is on pace to contribute positively to profitability in the fiscal fourth quarter of 2013."

"This progress was achieved despite overall market demand for the first half of fiscal 2013 that was below our expectations. The nonresidential forecasts by McGraw-Hill and others suggest that the market will grow in volume by 8% this calendar year over 2012. Given that the nonresidential market declined 2% over the first four months of calendar 2013, the market will need to build steam as it moves forward through the remainder of 2013 to achieve these forecasts. We remain cautiously optimistic that the nonresidential market will grow this year."

"Our backlog, current demand and shipping schedules underpin our optimism that we will deliver significantly improved results in the second half of 2013 over the first half. Because of the recent investments we have made in efficiencies, we believe we are well-positioned to exploit the market recovery as it develops and demonstrate year-over-year improvements and meaningful operating leverage," Mr. Chambers concluded.

Conference Call Information

The NCI Building Systems, Inc. second quarter conference call is scheduled for Tuesday, June 4, 2013, at 5:00 PM ET. Please call 1-412-858-4600 or 1-800-860-2442 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 1-412-317-0088 or 1-877-344-7529 and the passcode 10028871# when prompted. The Webcast archive and taped replay will both be available two hours after the call through June 11, 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.

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; satisfaction of conditions to the closing of, and consummation of, the amendments to the Company's term loan facility;  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) 

 For the Three Months Ended 

 For the Six Months Ended 

 April 28, 

 April 29, 

 April 28, 

 April 29, 

2013

2012

2013

2012

 Sales 

$ 293,399

$ 250,231

$ 590,983

$ 493,834

 Cost of sales 

232,562

192,229

469,277

382,210

      Gross profit 

60,837

58,002

121,706

111,624

20.7%

23.2%

20.6%

22.6%

 Engineering, selling, general and administrative expenses 

62,782

51,564

123,253

100,505

 Acquisition-related costs 

-

1,494

-

1,890

      Income (loss) from operations 

(1,945)

4,944

(1,547)

9,229

 Interest income 

42

28

72

56

 Interest expense 

(6,191)

(3,062)

(12,465)

(6,386)

 Other income, net 

246

353

640

379

 Income (loss) before income taxes 

(7,848)

2,263

(13,300)

3,278

 Provision (benefit) for income taxes 

(2,506)

942

(4,331)

1,368

31.9%

41.6%

32.6%

41.7%

 Net income (loss) 

$   (5,342)

$     1,321

$   (8,969)

$     1,910

 Convertible preferred stock dividends and accretion 

-

9,744

-

16,352

 Convertible preferred stock beneficial conversion feature 

-

7,858

-

11,878

 Net loss applicable to common shares 

$   (5,342)

$ (16,281)

$   (8,969)

$ (26,320)

 Loss per common share: 

    Basic 

$     (0.28)

$     (0.86)

$     (0.46)

$     (1.40)

    Diluted 

$     (0.28)

$     (0.86)

$     (0.46)

$     (1.40)

 Weighted average number of common shares outstanding: 

    Basic 

19,416

18,832

19,326

18,760

    Diluted 

19,416

18,832

19,326

18,760

 Increase in sales 

17.3%

19.7%

 Gross profit percentage 

20.7%

23.2%

20.6%

22.6%

 Engineering, selling, general and administrative 

    expenses percentage 

21.4%

20.6%

20.9%

20.4%

  

 NCI BUILDING SYSTEMS, INC. 

 CONDENSED BALANCE SHEETS 

 (In thousands) 

 April 28, 

 October 28, 

2013

2012

 (Unaudited) 

 ASSETS 

 Cash and cash equivalents 

$       27,538

$       55,158

 Restricted cash 

-

1,375

 Accounts receivable, net 

112,563

133,475

 Inventories, net 

125,779

106,015

 Deferred income taxes 

28,716

21,926

 Income tax receivable 

1,341

549

 Prepaid expenses and other 

18,388

16,864

 Investments in debt and equity securities, at market 

4,315

4,076

 Assets held for sale 

2,397

2,397

 Total current assets 

321,037

341,835

 Property, plant and equipment, net 

265,703

268,875

 Goodwill  

76,856

76,746

 Intangible assets, net 

51,002

53,028

 Other assets 

9,970

11,000

 Total assets 

$     724,568

$     751,484

 LIABILITIES AND STOCKHOLDERS' DEFICIT 

 Current portion of long-term debt 

$         2,500

$         2,500

 Note payable 

1,481

515

 Accounts payable 

97,752

113,177

 Accrued compensation and benefits 

42,431

43,066

 Accrued interest 

3,102

345

 Other accrued expenses 

57,132

60,455

 Total current liabilities 

204,398

220,058

 Long-term debt, net 

225,111

234,444

 Deferred income taxes 

36,572

35,565

 Other long-term liabilities 

11,939

11,995

 Total long-term liabilities 

273,622

282,004

 Series B cumulative convertible participating preferred stock 

619,950

619,950

 Common stock 

925

925

 Additional paid-in capital 

11,128

4,991

 Accumulated deficit 

(378,819)

(369,850)

 Accumulated other comprehensive loss 

(6,613)

(6,568)

 Treasury stock, at cost 

(23)

(26)

 Stockholders' deficit 

(373,402)

(370,528)

 Total liabilities and stockholders' deficit 

$     724,568

$     751,484

  

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 For the Six Months Ended 

April 28, 2013

 April 29, 2012 

Cash flows from operating activities:

      Net income (loss)

$         (8,969)

$             1,910

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

            operating activities:

            Depreciation and amortization

20,103

14,427

            Share-based compensation expense

6,887

4,093

            Loss on sale of property, plant and equipment

-

13

            Provision for doubtful accounts

1,100

(692)

            Provision (benefit) from deferred income taxes

(4,772)

1,147

      Changes in operating assets and liabilities, net of effect of acquisitions:

            Accounts receivable

19,812

12,561

            Inventories

(19,764)

(18,373)

            Income tax receivable

(381)

169

            Prepaid expenses and other

286

(2,972)

            Accounts payable

(15,425)

(2,899)

            Accrued expenses

(2,389)

656

            Other, net

(911)

(51)

Net cash provided by (used in) operating activities

(4,423)

9,989

Cash flows from investing activities:

      Capital expenditures

(12,715)

(13,899)

      Proceeds from sale of property, plant and equipment

-

37

Net cash used in investing activities

(12,715)

(13,862)

Cash flows from financing activities:

Proceeds from stock options exercised

674

-

Decrease in restricted cash

1,375

2,836

Payments on term loan

(10,375)

(2,200)

Payments on note payable

(593)

(403)

Payment of financing costs

(97)

(50)

Excess tax benefits from share-based compensation arrangements

948

1

Purchase of treasury stock

(2,369)

(1,510)

Net cash used in financing activities

(10,437)

(1,326)

Effect of exchange rate changes on cash and cash equivalents

(45)

73

Net decrease in cash and cash equivalents

(27,620)

(5,126)

Cash and cash equivalents at beginning of period

55,158

78,982

Cash and cash equivalents at end of period

$         27,538

$           73,856

  

NCI Building Systems, Inc

Business Segments

(Unaudited)

(In thousands)

Three Months Ended

Three Months Ended

$

%

April 28, 2013

April 29, 2012

Inc/(Dec)

Change

% of 

% of 

Total

Total

Sales:

Sales

Sales

     Metal coil coating

$ 49,790

14

$ 48,839

16

$      951

1.9%

     Metal components

147,163

43

106,742

35

40,421

37.9%

     Engineered building systems

148,095

43

148,715

49

(620)

-0.4%

          Total sales

345,048

100

304,296

100

40,752

13.4%

     Less: Intersegment sales

51,649

15

54,065

18

(2,416)

-4.5%

          Total net sales

$293,399

85

$ 250,231

82

$ 43,168

17.3%

 % of 

 % of 

Operating income (loss):

Sales

Sales

     Metal coil coating

$    4,755

10

$    4,890

10

$     (135)

-2.8%

     Metal components

5,137

3

9,018

8

(3,881)

-43.0%

     Engineered building systems

4,196

3

6,740

5

(2,544)

-37.7%

     Corporate

(16,033)

-

(15,704)

-

(329)

-2.1%

          Total operating income (loss) (% of sales)

$   (1,945)

(1)

$     4,944

2

$  (6,889)

-139.3%

Six Months Ended

Six Months Ended

$

%

 April 28, 2013 

 April 29, 2012 

Inc/(Dec)

Change

% of 

% of 

Total

Total

Sales:

Sales

Sales

     Metal coil coating

$   99,061

14

$   97,922

16

$    1,139

1.2%

     Metal components

301,067

43

212,494

36

88,573

41.7%

     Engineered building systems

295,661

43

289,013

48

6,648

2.3%

          Total sales

695,789

100

599,429

100

96,360

16.1%

     Intersegment sales

104,806

15

105,595

18

(789)

-0.7%

          Total net sales

$ 590,983

85

$ 493,834

82

$  97,149

19.7%

 % of 

 % of 

Operating income (loss):

Sales

Sales

     Metal coil coating

$   10,297

10

$   10,192

10

$      105

1.0%

     Metal components

11,209

4

14,559

7

(3,350)

-23.0%

     Engineered building systems

8,237

3

14,336

5

(6,099)

-42.5%

     Corporate

(31,290)

-

(29,858)

-

(1,432)

-4.8%

          Total operating income (loss) (% of sales)

$   (1,547)

(0)

$     9,229

2

$(10,776)

-116.8%

  

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 April 28, 2013 and April 29, 2012

(Unaudited)

(In thousands)

 For the Three Months Ended April 28, 2013 

Metal Coil

Coating

Metal

Components

Engineered

Building

Systems

Corporate

Consolidated

Operating income (loss), GAAP basis (2)

$     4,755

$        5,137

$      4,196

$  (16,033)

$         (1,945)

 For the Three Months Ended April 29, 2012 

Metal Coil

Coating 

Metal

Components

Engineered

Building

Systems

Corporate

Consolidated

Operating income (loss), GAAP basis

$      4,890

$        9,018

$      6,740

$  (15,704)

$          4,944

Acquisition-related costs

-

-

-

1,494

1,494

Actuarial determined general liability self-insurance charges (recovery)

-

(1,929)

-

-

(1,929)

Executive retirement

-

-

-

508

508

"Adjusted" operating income (loss) (1)

$      4,890

$        7,089

$      6,740

$  (13,702)

$          5,017

(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 statement of operations.

(2)  The Company did not incur any special charges during the three months ended April 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 SIX MONTHS ENDED APRIL 28, 2013 AND APRIL 29, 2012

(Unaudited)

(In thousands)

 For the Six Months Ended April 28, 2013 

Metal Coil

Coating

Metal

Components

Engineered

Building

Systems

Corporate

Consolidated

Operating income (loss), GAAP basis (2)

$    10,297

$      11,209

$       8,237

$  (31,290)

$        (1,547)

 For the Six Months Ended April 29, 2012 

Metal Coil

Coating

Metal

Components

Engineered

Building

Systems

Corporate

Consolidated

Operating income (loss), GAAP basis

$    10,192

$      14,559

$     14,336

$  (29,858)

$         9,229

Acquisition-related costs

-

-

-

1,890

1,890

Actuarial determined general liability self-insurance

     charges (recovery)

-

(1,929)

-

-

(1,929)

Executive retirement

-

-

-

508

508

"Adjusted" operating income (loss) (1)

$    10,192

$      12,630

$     14,336

$  (27,460)

$         9,698

(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 statement of operations.

(2)  The Company did not incur any special charges during the six months ended April 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)

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

Trailing 12 Months

 July 29, 

 October 28, 

 January 27, 

 April 28, 

 April 28, 

2012

2012

2013

2013

2013

Net income (loss)

$ (3,267)

$         6,270

$        (3,627)

$  (5,342)

$                  (5,966)

Add:

     Depreciation and amortization

7,248

10,355

9,122

8,809

35,534

     Consolidated interest expense, net

4,159

6,226

6,244

6,149

22,778

     Provision (benefit) for taxes

(663)

3,379

(1,825)

(2,506)

(1,615)

     Acquisition-related costs, net

2,946

153

-

-

3,099

     Transaction costs

6,437

-

-

-

6,437

     Non-cash charges:

          Stock-based compensation

2,090

3,116

3,442

3,445

12,093

          Asset impairments (recoveries)

(22)

13

-

-

(9)

          Embedded derivative

(5)

(5)

(5)

(4)

(19)

     Adjusted EBITDA (1)

$ 18,923

$       29,507

$       13,351

$  10,551

$                  72,332

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

Trailing 12 Months

July 31,

 October 30, 

 January 29, 

 April 29, 

 April 29, 

2011

2011

2012

2012

2012

Net income (loss)

$   2,593

$         3,411

$            589

$    1,321

$                    7,914

Add:

     Depreciation and amortization

7,187

6,753

6,158

5,841

25,939

     Consolidated interest expense, net

3,864

3,685

3,296

3,034

13,879

     Provision (benefit) from income taxes

-

398

426

942

1,766

     Acquisition-related costs, net

-

-

396

1,494

1,890

     Cash restructuring charges (recovery)

(575)

283

-

-

(292)

     Executive retirement

-

-

-

508

508

     Non-cash charges:

          Stock-based compensation

1,776

1,776

1,972

2,119

7,643

          Asset impairments (recoveries)

(93)

1,214

-

-

1,121

          Embedded derivative

(6)

(6)

(5)

(6)

(23)

     Adjusted EBITDA (1)

$ 14,746

$       17,514

$       12,832

$  15,253

$                  60,345

(1)  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 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 Six Months Ended

 April 28, 

 April 29, 

April 28, 

 April 29, 

2013

2012

2013

2012

Net loss per diluted common share, GAAP basis

(0.28)

(0.86)

(0.46)

(1.40)

Convertible preferred stock beneficial conversion feature and amendment

-

0.42

-

0.63

Acquisition-related costs, net of taxes

-

0.05

-

0.06

Actuarial determined general liability self-insurance charges (recovery), net of taxes

-

(0.06)

-

(0.06)

Executive retirement, net of taxes

-

0.02

-

0.02

"Adjusted" net loss per diluted common share (1)

(0.28)

(0.44)

(0.46)

(0.75)

Fiscal Three Months Ended

Fiscal Six Months Ended

 April 28, 

 April 29, 

April 28, 

 April 29, 

2013

2012

2013

2012

Net loss applicable to common shares, GAAP basis

$  (5,342)

$(16,281)

$  (8,969)

$(26,320)

Convertible preferred stock beneficial conversion feature and amendment

-

7,858

-

11,878

Acquisition-related costs, net of taxes

-

920

-

1,164

Actuarial determined general liability self-insurance charges (recovery), net of taxes

-

(1,188)

-

(1,188)

Executive retirement, net of taxes

-

313

-

313

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

$  (5,342)

$  (8,378)

$  (8,969)

$(14,153)

 (1) The Company discloses a tabular comparison of "Adjusted" loss per diluted common share and net 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 results from period to period.  "Adjusted" loss per diluted common share

        and net loss applicable to common shares should not be considered in isolation or as a substitute for 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)

%

 2nd Qtr 2013 

 2nd Qtr 2012 

 Inc/(Dec) 

 Change 

 Metal Coil Coating 

 Total Sales 

49,790

14%

48,839

16%

951

2%

 Less: Intersegment sales 

27,903

29,267

(1,364)

-5%

 Third Party Sales 

21,887

7%

19,572

8%

2,315

12%

 Operating Income (Loss) 

4,755

22%

4,890

25%

(135)

-3%

 Metal Components 

 Total Sales 

147,163

43%

106,742

35%

40,421

38%

 Less: Intersegment sales 

17,982

21,418

(3,436)

-16%

 Third Party Sales 

129,181

44%

85,324

34%

43,857

51%

 Operating Income (Loss) 

5,137

4%

9,018

11%

(3,881)

-43%

 Engineered Building Systems 

 Total Sales 

148,095

43%

148,715

49%

(620)

0%

 Less: Intersegment sales 

5,764

3,380

2,384

71%

 Third Party Sales 

142,331

49%

145,335

58%

(3,004)

-2%

 Operating Income (Loss) 

4,196

3%

6,740

5%

(2,544)

-38%

 Consolidated 

 Total Sales 

345,048

100%

304,296

100%

40,752

13%

 Intersegment 

51,649

54,065

(2,416)

-4%

 Third Party Sales 

293,399

100%

250,231

100%

43,168

17%

 Operating Income (Loss) 

(1,945)

-1%

4,944

2%

(6,889)

-139%

 YTD 

 YTD 

%

 2nd Qtr 2013 

 2nd Qtr 2012 

 Inc/(Dec) 

 Change 

 Metal Coil Coating 

 Total Sales 

99,061

14%

97,922

16%

1,139

1%

 Less: Intersegment sales 

57,953

58,112

(159)

0%

 Third Party Sales 

41,108

7%

39,810

8%

1,298

3%

 Operating Income (Loss) 

10,297

25%

10,192

26%

105

1%

 Metal Components 

 Total Sales 

301,067

43%

212,494

36%

88,573

42%

 Less: Intersegment sales 

35,358

39,874

(4,516)

-11%

 Third Party Sales 

265,709

45%

172,620

35%

93,089

54%

 Operating Income (Loss) 

11,209

4%

14,559

8%

(3,350)

-23%

 Engineered Building Systems 

 Total Sales 

295,661

43%

289,013

48%

6,648

2%

 Less: Intersegment sales 

11,495

7,609

3,886

51%

 Third Party Sales 

284,166

48%

281,404

57%

2,762

1%

 Operating Income (Loss) 

8,237

3%

14,336

5%

(6,099)

-43%

 Consolidated 

 Total Sales 

695,789

100%

599,429

100%

96,360

16%

 Less: Intersegment sales 

104,806

105,595

(789)

-1%

 Third Party Sales 

590,983

100%

493,834

100%

97,149

20%

 Operating Income (Loss) 

(1,547)

0%

9,229

2%

(10,776)

-117%

 

SOURCE NCI Building Systems, Inc.



RELATED LINKS

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