NCI Building Systems Reports Strong Fourth Quarter and 2015 Fiscal Year End Results

Dec 10, 2015, 16:15 ET from NCI Building Systems, Inc.

HOUSTON, Dec. 10, 2015 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for the fourth quarter and fiscal year ended November 1, 2015.

Fourth Quarter 2015 Financial and Operational Highlights:

  • Sales rose 17.2% to $459.8 million, compared to $392.4 million in last year's fourth quarter, primarily driven by the acquisition of CENTRIA that closed in January 2015.
  • Gross profit increased 32.3% to $123.6 million and gross margin expanded 310 basis points year-over-year to 26.9%.
  • Net income per diluted common share was $0.25, which included net charges of $0.06 for special items.
  • Adjusted for special items, net income per diluted common share increased to $0.31 from $0.19 in last year's fourth quarter.
  • Adjusted EBITDA increased 55.6% to $56.4 million and Adjusted EBITDA margin expanded 310 basis points to 12.3% compared to the prior year's fourth quarter.
  • Buildings backlog grew 13.2% year-over-year and the consolidated backlog increased 48.1% to $494.5 million, which now includes CENTRIA's backlog of $115.2 million.

Fiscal 2015 Financial and Operational Highlights:

  • Sales rose 14.1% to $1.56 billion from $1.37 billion in the prior year.
  • Gross profit increased 27.6% to $372.3 million from $291.8 million in fiscal 2014.
  • Net income per diluted common share was $0.24, which included $0.18 of special items.
  • Adjusted for special items, net income per diluted common share was $0.42, up from $0.16 in fiscal 2014.  
  • Adjusted EBITDA rose 72.2% to $130.1 million and Adjusted EBITDA margin expanded 280 basis points to 8.3% in the current fiscal year.
  • Pre-tax free cash flow* more than tripled to $125 million from $38 million in the prior year.

*Defined as Adjusted EBITDA – net capital expenditures + changes in net working capital

Norman C. Chambers, Chairman, President and Chief Executive Officer, commented, "We are pleased to have delivered on our commitment to increase gross profit margin and Adjusted EBITDA, marking the sixth consecutive quarter of year-over-year improvement. Our solid fourth quarter results helped us achieve the best second half and full year performance since 2008. The improved performance across all three operating segments is a direct result of the reorganization of our business and strategic initiatives implemented over the past few years.  Specifically, our fiscal 2015 performance delivered a 59% increase in net income and a 72% increase in Adjusted EBITDA.  In addition, despite continued choppy market conditions, we have been able to deliver earnings growth over the prior several quarters through increased volumes, commercial discipline, and manufacturing improvements. "

Fourth Quarter 2015 Results

Fourth quarter 2015 sales increased to $459.8 million, or 17.2%, from $392.4 million in last year's fourth quarter, due mainly to increased volumes across all three segments and the impact of the CENTRIA acquisition.  The legacy single skin and insulated metal panel (IMP) product lines, as well as the Buildings group, delivered strong results.

Gross profit increased 32.3% to $123.6 million from $93.4 million in the fourth quarter of 2014, while gross profit margin expanded 310 basis points to 26.9%, compared to 23.8% in the prior year period. The improved margin performance was driven largely by a combination of commercial discipline, effective supply chain initiatives and the impact of the operating leverage created by increased utilization.

Engineering, selling, general and administrative (ESG&A) expenses increased 13.5% to $76.4 million from $67.3 million in the fourth quarter of 2014 due largely to the CENTRIA acquisition and, to a lesser extent, increased incentive compensation. As a percentage of revenues, ESG&A expenses decreased approximately 60 basis points to 16.6% in the 2015 fourth quarter compared to 17.2% in the prior year's period.

Adjusted operating income, a non-GAAP measure, increased 74.7% to $43.8 million in the current quarter from $25.1 million in the fourth quarter of 2014, driven by the expansion in gross profit margin. On a GAAP basis, operating income increased to $36.5 million, or 69.2%, compared to $21.6 million in the prior year's fourth quarter and increased 88.4% sequentially from the third quarter of fiscal 2015.

Adjusted EBITDA, a non-GAAP measure, defined in accordance with the Company's term loan credit agreement as earnings before interest, taxes, depreciation and amortization, and cash and other non-cash items, was $56.4 million, up 55.6% from $36.3 million in the prior year's fourth quarter. This performance marks a continuation from the third quarter, in which Adjusted EBITDA increased 53.0% year-over-year.

Fourth quarter 2015 net income was $18.4 million, or $0.25 per diluted common share, and was impacted by the following items: $7.6 million of restructuring and impairment charges; $1.1 million of strategic development and acquisition related costs pertaining to acquisitions that have been completed; $2.3 million of amortization of short lived intangibles and $3.8 million gain on legal settlements. Excluding the impact of these special items, the Company reported adjusted net income applicable to common shares, a non-GAAP measure, of $22.7 million, or $0.31 per diluted common share, compared to $13.8 million, or $0.19 per diluted common share, in the fourth quarter of 2014.

During the fourth quarter, NCI developed plans to improve cost efficiency by optimizing our manufacturing footprint through the integration of operations from our recent acquisitions, which resulted in the recognition of certain asset impairment charges. The Company believes that the successful execution of these improvement plans over the next 12-36 months will result in annualized cost savings of $15-20 million.

Please see the reconciliation of Adjusted Operating Income and Adjusted EBITDA and Adjusted Net Income in the accompanying financial tables.

Interest expense increased to $8.0 million in the fourth quarter of 2015, compared to $3.1 million in last year's fourth quarter as a result of the $250 million, 8.25% senior notes, issued to finance the CENTRIA acquisition.

Cash and cash equivalents at quarter's end was $99.7 million compared to $66.7 million in the comparable period in fiscal 2014 and grew sequentially from $48.3 million at the end of the third quarter of fiscal 2015. The Company paid down an additional $10 million under its term loan in the fourth quarter of fiscal 2015, bringing the total debt repayments to $40 million during the fiscal year. NCI's proforma net debt leverage ratio at the end of the fourth fiscal quarter improved to 2.7x, moving closer to the previous pre-Centria acquisition leverage of 2.2x.  In addition, the Company's $150.0 million ABL facility remained undrawn as of November 1, 2015.

Fourth Quarter 2015 Segment Performance

Third party sales in the Buildings group increased slightly to $192.5 million in the fourth quarter from $189.7 million in the prior year quarter, primarily due to higher volumes from an improved product portfolio mix. Gross profit increased to $58.9 million from $51.4 million in the fourth quarter 2014, and gross profit margin expanded 330 basis points to 29.8%. Adjusted operating income increased 36.3% to $26.4 million in the current quarter, compared to $19.4 million in the fourth quarter of fiscal 2014. The improved margins in the Buildings segment were driven by improvements in commercial discipline, supply chain management and manufacturing efficiencies.

The Components group generated $240.6 million in third-party sales during the quarter, an increase of 41.3% from $170.3 million in the fourth quarter of fiscal 2014, led by CENTRIA's contribution as well as continued strength of the legacy single skin and roll-up door product lines.  Gross profit increased to $56.2 million from $33.9 million in the fourth quarter 2014, while gross profit margin expanded 310 basis points to 20.3%. Adjusted operating income increased to $26.9 million from $14.3 million in the same quarter last fiscal year. The Components segment's profitability benefited from CENTRIA's contribution, improved product mix and commercial discipline. During the fourth quarter, CENTRIA contributed $58.3 million in sales and $6.2 million in Adjusted EBITDA.

Third party sales in the Coatings group were $26.7 million, a 17.6% decline from $32.4 million in last year's fourth quarter. Gross profit decreased slightly to $8.8 million from $8.9 million in the fourth quarter 2014, while gross profit margin increased 110 basis points to 13.8%. Adjusted operating income increased 4.0% to $7.2 million in the fourth quarter of fiscal 2015, compared to $6.9 million reported in the same period last year.

Market Commentary

Current market estimates continue to show subdued activity in nonresidential markets. Nonresidential construction starts, as measured in square feet, were down 7% in fiscal 2015 according to Dodge Data & Analytics. Low-rise starts, comprising buildings one to five stories, were down 6% for fiscal 2015. However, leading indicators for low-rise, nonresidential construction activity continue to indicate positive momentum moving into fiscal year 2016.

The leading indicators with the most meaningful correlation to nonresidential low-rise construction starts are The American Institute of Architects' (AIA) Architecture Mixed Use Index, Dodge Residential single family starts and the Conference Board Leading Economic Index (LEI).   Historically, there has been a very high correlation to the Dodge low-rise nonresidential starts when the three leading indicators are combined and then seasonally adjusted.  Currently, the forward projection of these metrics indicates modest growth for the first half of fiscal 2016.

Outlook and Guidance

Mr. Chambers remarked, "Over the last 18 months, we generated substantial improvements in both gross profit margin and Adjusted EBITDA, which was the direct result of a very deliberate strategy led by commercial discipline, effective supply chain management and enhanced manufacturing efficiencies. We will continue to execute on our strategic initiatives to further optimize our manufacturing footprint and decrease our cost structure over the next several quarters as we anticipate low to mid-single digit nonresidential market growth rates in calendar 2016.

"Our strong backlog includes a greater proportion of higher-complexity projects that have a longer lead time for production, providing us with good visibility through the first half of fiscal 2016. We expect our investments in IMP products over the past several years will help us to further unlock the anticipated growth potential of the underpenetrated North American market. We currently anticipate delivering year-over-year improvement in fiscal 2016.  Similar to past years and due to the seasonal nature of our business, we expect our second half performance of fiscal 2016 to be stronger than the first half."

For additional information, please see the CFO Commentary at www.ncibuildingsystems.com under the "Investors" section.

Conference Call Information

The NCI Building Systems, Inc. fourth quarter and fiscal year end 2015 conference call is scheduled for Friday, December 11, 2015, at 9:00 a.m. ET (8:00 a.m. CT). Please dial 1-412-902-0003 or 1-877-407-0672 (toll-free) 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.ncibuildingsystems.com. To access the taped replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13624068# when prompted. The taped replay will be available two hours after the call through December 28, 2015.

About NCI Building Systems

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, Mexico and China with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.

Contact: Layne de Alvarez Vice President, 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," "plan," "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, therefore, 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. Such forward-looking statements include, but are not limited to, the Company's expectation for the current growth trend for construction spending in the next six to twelve months and the expectation for U.S. nonresidential construction growth to accelerate in 2016, and the Company's summary/outlook for the full year of 2016. Among the factors that could cause actual results to differ materially include, but are not limited to, the Company's ability to integrate CENTRIA with the Company's business and realize anticipated benefits of such acquisition; industry cyclicality and seasonality and adverse weather conditions; ability to service or refinance the Company's debt, including its 8.250% Senior Notes due 2023, and obtain future financing; the Company's ability to comply with the financial tests and covenants in its existing and future debt obligations; operational limitations or restrictions in connection with our debt; recognition of asset impairment charges; the ability to make strategic acquisitions accretive to earnings; retention and replacement of key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; commodity price increases and/or limited availability of raw materials, including steel; increases in energy prices, competitive activity and pricing pressure; challenging economic conditions affecting the non-residential construction industry; volatility in the U.S. economy and abroad generally, and in the credit markets; costs related to environmental clean-ups and liabilities; changes in laws or regulations, including the Dodd-Frank Act; the dilutive effect on the Company's common stockholders of potential future sales of the Company's common stock held by our sponsor; substantial governance and other rights held by our sponsor; breaches of our information system security measures and damage to our major information management systems; hazards that may cause personal injury or property damage, thereby subjecting the Company to liabilities and possible losses, which may not be covered by insurance; costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; 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 November 2, 2014 and in the Company's Quarterly Report on Form 10-Q for the quarterly period ended February 1, 2015, 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 

 (In thousands, except per share data) 

(Unaudited)

 Fiscal Three Months Ended 

 Fiscal Year Ended 

 November 1, 

 November 2, 

 November 1, 

 November 2, 

2015

2014

2015

2014

 Sales 

$       459,831

$       392,448

$    1,563,693

$    1,370,540

 Cost of sales 

336,230

299,011

1,189,019

1,080,027

 Fair value adjustment of acquired inventory 

-

-

2,358

-

 Gain on insurance recovery 

-

-

-

(1,311)

      Gross profit 

123,601

93,437

372,316

291,824

26.9%

23.8%

23.8%

21.3%

 Engineering, selling, general and administrative expenses 

76,416

67,337

286,840

257,677

 Intangible asset amortization (including amortization of   short lived acquired intangibles) 

5,697

1,013

16,903

4,053

 Strategic development and acquisition related costs 

1,143

3,512

4,201

4,998

 Restructuring and impairment charges 

7,611

-

11,306

-

 Gain on legal settlements 

(3,765)

-

(3,765)

-

 Income from operations 

36,499

21,575

56,831

25,096

 Interest income 

19

16

72

126

 Interest expense 

(8,012)

(3,067)

(28,460)

(12,455)

 Foreign exchange loss  

(130)

(298)

(2,152)

(1,097)

 Other income, net 

60

249

499

1,005

 Income before income taxes 

28,436

18,475

26,790

12,675

 Provision for income taxes 

10,029

4,216

8,972

1,490

35.3%

22.8%

33.5%

11.8%

 Net income 

$         18,407

$         14,259

$         17,818

$         11,185

 Net income allocated to participating securities 

(221)

(128)

(178)

(101)

 Net income applicable to common shares 

$         18,186

$         14,131

$         17,640

$         11,084

 Income per common share: 

    Basic 

$             0.25

$             0.19

$             0.24

$             0.15

    Diluted 

$             0.25

$             0.19

$             0.24

$             0.15

 Weighted average number of common shares outstanding: 

    Basic 

73,337

73,036

73,271

73,079

    Diluted 

73,831

74,713

73,923

74,709

 Increase in sales 

17.2%

-1.9%

14.1%

4.7%

 Gross profit percentage 

26.9%

23.8%

23.8%

21.3%

 Engineering, selling, general and administrative 

    expenses percentage 

16.6%

17.2%

18.3%

18.8%

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 November 1, 

 November 2, 

2015

2014

 (Unaudited) 

 ASSETS 

 Cash and cash equivalents 

$         99,662

$         66,651

 Restricted cash 

682

-

 Accounts receivable, net 

166,800

136,923

 Inventories, net 

157,828

131,497

 Deferred income taxes 

27,390

21,447

 Income tax receivable 

3,698

-

 Prepaid expenses and other 

31,344

22,773

 Investments in debt and equity securities, at market 

6,380

5,549

 Assets held for sale 

6,261

5,690

 Total current assets 

500,045

390,530

 Property, plant and equipment, net 

257,892

244,714

 Goodwill  

158,026

75,226

 Intangible assets, net 

156,395

44,923

 Deferred financing costs, net 

11,069

3,290

 Total assets 

$    1,083,427

$       758,683

 LIABILITIES AND STOCKHOLDERS' EQUITY 

 Current portion of long-term debt 

$                   -

$           2,384

 Note payable 

513

418

 Accounts payable 

145,917

118,164

 Accrued compensation and benefits 

62,200

50,666

 Accrued interest 

6,389

1,820

 Accrued income taxes 

12,994

-

 Other accrued expenses 

97,309

72,259

 Total current liabilities 

325,322

245,711

 Long-term debt, net 

444,147

233,003

 Deferred income taxes 

20,807

20,219

 Other long-term liabilities 

21,175

13,208

 Total long-term liabilities 

486,129

266,430

 Common stock 

745

737

 Additional paid-in capital 

640,767

630,297

 Accumulated deficit 

(353,733)

(371,550)

 Accumulated other comprehensive loss 

(8,280)

(8,739)

 Treasury stock, at cost 

(7,523)

(4,203)

 Total stockholders' equity  

271,976

246,542

 Total liabilities and stockholders' equity  

$    1,083,427

$       758,683

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 Fiscal Year Ended 

 November 1, 

 November 2, 

2015

2014

Cash flows from operating activities:

      Net Income

$         17,818

$         11,185

      Adjustments to reconcile net income to net cash provided by (used in) operating activities:

            Depreciation and amortization

51,392

35,876

            Deferred financing cost amortization

1,483

1,076

            Share-based compensation expense

9,379

10,168

            (Gain) loss on sale of property

(15)

123

            Asset impairment

5,876

-

            Gain on insurance recovery

-

(1,311)

            (Recovery of) provision for doubtful accounts

(788)

(18)

            Provision for (benefit from) deferred income taxes

5,368

(6,785)

            Excess tax benefits from share-based compensation arrangements

(746)

(538)

      Changes in operating assets and liabilities:

            Accounts receivable

8,508

(1,537)

            Inventories

4,604

(9,391)

            Income tax receivable

(2,634)

1,599

            Prepaid expenses and other

(267)

(4,762)

            Accounts payable

11,475

(26,394)

            Accrued expenses

(6,052)

24,210

            Other, net

(361)

65

Net cash provided by (used in) operating activities

105,040

33,567

Cash flows from investing activities:

      Acquisition, net of cash acquired

(247,123)

-

      Proceeds from sale of property, plant and equipment

28

14

      Proceeds from insurance

-

1,311

      Capital expenditures

(20,683)

(18,020)

-

Net cash used in investing activities

(267,778)

(16,695)

Cash flows from financing activities:

Proceeds from stock options exercised

354

-

Decrease in restricted cash

298

-

Issuance of debt

250,000

-

Payments on term loan

(41,240)

(2,388)

Payments on note payable

(1,616)

(1,590)

Proceeds from Amended ABL Facility

-

72,000

Payments on Amended ABL Facility

-

(72,000)

Borrowings on term loan

-

-

Payment of financing costs

(9,217)

(51)

Purchase of treasury stock

(3,320)

(23,798)

Excess tax benefits from share-based compensation arrangements

745

538

Net cash provided by (used in) financing activities

196,004

(27,289)

Effect of exchange rate changes on cash and cash equivalents

(255)

(367)

Net decrease in cash and cash equivalents

33,011

(10,785)

Cash and cash equivalents at beginning of period

66,651

77,436

Cash and cash equivalents at end of period

$       99,662

$         66,651

 

NCI Building Systems, Inc

Business Segments

(In thousands)

(Unaudited)

Fiscal Three Months Ended

Fiscal Three Months Ended

$

%

November 1, 2015

November 2, 2014

Inc/(Dec)

Change

% of

% of

Total

Total

Sales:

Sales

Sales

     Engineered building systems

$    197,600

37

$    194,009

42

$     3,591

1.9%

     Metal components

275,747

51

197,264

43

78,483

39.8%

     Metal coil coating

63,742

12

69,684

15

(5,942)

-8.5%

          Total sales

537,089

100

460,957

100

76,132

16.5%

     Less: Intersegment sales

77,258

14

68,509

15

8,749

12.8%

          Total net sales

$    459,831

86

$    392,448

85

$   67,383

17.2%

 % of

 % of

Operating income (loss):

Sales

Sales

     Engineered building systems

$      25,473

13

$      19,397

10

$     6,076

31.3%

     Metal components

18,239

7

14,198

7

4,041

28.5%

     Metal coil coating

7,208

11

6,929

10

279

4.0%

     Corporate

(14,421)

-

(18,949)

-

4,528

23.9%

          Total operating income (loss) (% of sales)

$      36,499

8

$      21,575

5

$   14,924

69.2%

 Fiscal Year Ended

 Fiscal Year Ended

$

%

 November 1, 2015

 November 2, 2014

Inc/(Dec)

Change

% of

% of

Total

Total

Sales:

Sales

Sales

     Engineered building systems

$    667,165

37

$    669,843

42

$   (2,678)

-0.4%

     Metal components

920,845

50

694,858

43

225,987

32.5%

     Metal coil coating

231,732

13

246,582

15

(14,850)

-6.0%

          Total sales

1,819,743

100

1,611,283

100

208,460

12.9%

     Less: Intersegment sales

256,050

14

240,743

15

15,307

6.4%

          Total net sales

$ 1,563,693

86

$ 1,370,540

85

$ 193,153

14.1%

 % of

 % of

Operating income (loss):

Sales

Sales

     Engineered building systems

$      51,410

8

$      32,525

5

$   18,885

58.1%

     Metal components

50,541

5

33,306

5

17,235

51.7%

     Metal coil coating

19,080

8

23,982

10

(4,902)

-20.4%

     Corporate

(64,200)

-

(64,717)

-

517

0.8%

          Total operating income (loss) (% of sales)

$      56,831

4

$      25,096

2

$   31,735

126.5%

 

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

FISCAL THREE MONTHS ENDED NOVEMBER 1, 2015 AND NOVEMBER 2, 2014

(In thousands)

(Unaudited)

 Fiscal Three Months Ended November 1, 2015 

 Metal Coil Coating 

 Metal Components 

 Engineered Building Systems 

 Corporate 

 Consolidated 

Operating income (loss), GAAP basis 

$      7,208

$      18,239

$    25,473

$  (14,421)

$        36,499

Restructuring and impairment charges

-

6,365

959

287

7,611

Strategic development and acquisition related costs

-

-

-

1,143

1,143

Gain on legal settlements

-

-

-

(3,765)

(3,765)

Amortization of short lived acquired intangibles

-

2,343

-

-

2,343

Adjusted operating income (loss) (1)

$      7,208

$      26,947

$    26,432

$  (16,756)

$        43,831

 Fiscal Three Months Ended November 2, 2014 

 Metal Coil Coating 

 Metal Components 

 Engineered Building Systems 

 Corporate 

 Consolidated 

Operating income (loss), GAAP basis 

$      6,929

$      14,198

$    19,397

$  (18,949)

$        21,575

Strategic development and acquisition related costs

-

109

-

3,403

3,512

Adjusted operating income (loss) (1)

$      6,929

$      14,307

$    19,397

$  (15,546)

$        25,087

(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.

 

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

FISCAL YEAR ENDED NOVEMBER 1, 2015 AND NOVEMBER 2, 2014

(In thousands)

(Unaudited)

 Fiscal Year Ended November 1, 2015 

 Metal Coil Coating 

 Metal Components 

 Engineered Building Systems 

 Corporate 

 Consolidated 

Operating income (loss), GAAP basis

$    19,080

$      50,541

$     51,410

$  (64,200)

$       56,831

Restructuring and impairment charges

254

7,866

2,756

430

11,306

Strategic development and acquisition related costs

-

-

-

4,201

4,201

Gain on legal settlements

-

-

-

(3,765)

(3,765)

Fair value adjustment of acquired inventory

-

2,358

-

-

2,358

Amortization of short lived acquired intangibles

-

8,400

-

-

8,400

Adjusted operating income (loss) (1)

$    19,334

$      69,165

$     54,166

$  (63,334)

$       79,331

 Fiscal Year Ended November 2, 2014 

 Metal Coil Coating 

 Metal Components 

 Engineered Building Systems 

 Corporate 

 Consolidated 

Operating income (loss), GAAP basis

$    23,982

$      33,306

$     32,525

$  (64,717)

$       25,096

Gain on insurance recovery

(1,311)

-

-

-

(1,311)

Secondary offering costs

-

-

-

754

754

Strategic development costs

-

109

-

4,889

4,998

Adjusted operating income (loss) (1)

$    22,671

$      33,415

$     32,525

$  (59,074)

$       29,537

(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.

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER NONCASH ITEMS (ADJUSTED EBITDA)

(In thousands)

(Unaudited)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Trailing 12 Months

 February 1, 

 May 3, 

 August 2, 

 November 1, 

 November 1, 

2015

2015

2015

2015

2015

Net income (loss)

$           (320)

$ (7,488)

$     7,220

$         18,407

$                  17,819

Add:

     Depreciation and amortization

9,731

13,766

14,541

13,354

51,392

     Consolidated interest expense, net

3,980

8,280

8,135

7,993

28,388

     Provision for (benefit from) income taxes

(490)

(4,087)

3,520

10,029

8,972

     Restructuring and impairment charges

1,477

1,759

504

7,611

11,351

     Strategic development and acquisition related costs

1,729

628

701

1,143

4,201

     Gain on legal settlements

-

-

-

(3,765)

(3,765)

     Fair value adjustment of acquired inventory

583

775

1,000

-

2,358

     Share-based compensation

2,933

2,201

2,568

1,677

9,379

     Adjusted EBITDA(1)

$       19,623

$ 15,834

$   38,189

$         56,449

$                130,095

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Trailing 12 Months

 February 2, 

 May 4, 

 August 3, 

 November 2, 

 November 2, 

2014

2014

2014

2014

2014

Net income (loss)

$        (4,258)

$ (4,905)

$     6,089

$         14,259

$                  11,185

Add:

     Depreciation and amortization

8,767

8,941

8,994

9,220

35,922

     Consolidated interest expense, net

3,100

3,035

3,142

3,053

12,330

     Provision for (benefit from) income taxes

(2,506)

(3,057)

2,837

4,215

1,489

     Gain on insurance recovery

(987)

(324)

-

-

(1,311)

     Secondary offering costs

704

50

-

-

754

     Strategic development and acquisition related costs

-

-

1,486

3,512

4,998

     Share-based compensation

3,179

2,563

2,404

2,022

10,168

     Adjusted EBITDA (1)

$         7,999

$   6,303

$   24,952

$         36,281

$                  75,535

(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 Loan facility, the Company entered into an Asset-Based 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 NET INCOME (LOSS) PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON 

(Unaudited)

 Fiscal Three Months Ended 

 Fiscal Year Ended 

 November 1, 

 November 2, 

 November 1, 

 November 2, 

2015

2014

2015

2014

Net income (loss) per diluted common share, GAAP basis

$             0.25

$             0.19

$             0.24

$             0.15

Restructuring and impairment charges, net of taxes

0.06

-

0.09

-

Strategic development and acquisition related costs, net of taxes

0.01

0.03

0.03

0.04

Fair value adjustment of acquired inventory, net of taxes

-

-

0.01

-

Amortization of short lived acquired intangibles, net of taxes

0.02

-

0.07

-

Gain on legal settlements, net of taxes

(0.03)

-

(0.03)

-

Reversal of Canadian deferred tax valuation allowance

-

(0.03)

-

(0.03)

Foreign exchange loss, net of taxes

-

0.00

-

0.01

Gain on insurance recovery, net of taxes

-

-

-

(0.01)

Secondary offering costs, net of taxes

-

-

-

0.00

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

$             0.31

$             0.19

$             0.42

$             0.16

 Fiscal Three Months Ended 

Fiscal Year Ended

 November 1, 

 November 2, 

 November 1, 

 November 2, 

2015

2014

2015

2014

Net income (loss) applicable to common shares, GAAP basis

$         18,186

$         14,131

$         17,640

$         11,185

Restructuring and impairment charges, net of taxes

4,643

-

6,897

-

Strategic development and acquisition related costs, net of taxes

697

2,163

2,563

3,079

Fair value adjustment of acquired inventory, net of taxes

-

-

1,438

-

Amortization of short lived acquired intangibles, net of taxes

1,429

-

5,124

-

Gain on legal settlements, net of taxes

(2,297)

-

(2,297)

-

Reversal of Canadian deferred tax valuation allowance

-

(2,718)

-

(2,718)

Foreign exchange loss, net of taxes

-

178

-

676

Gain on insurance recovery, net of taxes

-

-

-

(808)

Secondary offering costs, net of taxes

-

-

-

464

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

$         22,659

$         13,753

$         31,366

$         11,878

(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 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 income (loss) per diluted common share and net income (loss) applicable to common shares as reported on the face of our consolidated statement of operations.

 

 NCI Building Systems, Inc. 

 Reconciliation of Segment Sales to Third Party Segment Sales 

(In thousands)

(Unaudited)

 Fiscal 

 Fiscal 

%

 4th Qtr 2015 

 4th Qtr 2014 

 Inc/(Dec) 

 Change 

 Engineered Building Systems 

 Total Sales 

$          197,600

37%

$          194,009

42%

$       3,591

1.9%

 Less: Intersegment sales 

5,100

4,266

834

19.5%

 Third Party Sales 

$          192,500

42%

$          189,743

48%

$       2,757

1.5%

 Operating Income 

$            25,473

13%

$            19,397

10%

$       6,076

31.3%

 Metal Components 

 Total Sales 

$          275,747

51%

$          197,264

43%

$     78,483

39.8%

 Less: Intersegment sales 

35,104

26,931

8,173

30.3%

 Third Party Sales 

$          240,643

52%

$          170,333

43%

$     70,310

41.3%

 Operating Income 

$            18,239

8%

$            14,198

8%

$       4,041

28.5%

 Metal Coil Coating 

 Total Sales 

$            63,742

12%

$            69,684

15%

$      (5,942)

-8.5%

 Less: Intersegment sales 

37,055

37,312

(257)

-0.7%

 Third Party Sales 

$            26,687

6%

$            32,372

8%

$      (5,685)

-17.6%

 Operating Income 

$              7,208

27%

$              6,929

21%

$          279

4.0%

 Consolidated 

 Total Sales 

$          537,089

100%

$          460,957

100%

$     76,132

16.5%

 Less: Intersegment 

77,259

68,509

8,750

12.8%

 Third Party Sales 

$          459,830

100%

$          392,448

100%

$     67,382

17.2%

 Operating Income 

$            36,499

8%

$            21,575

5%

$     14,924

69.2%

 Fiscal YTD 

 Fiscal YTD 

%

 4th Qtr 2015 

 4th Qtr 2014 

 Inc/(Dec) 

Change

 Engineered Building Systems 

 Total Sales 

$          667,165

37%

$          669,843

42%

$      (2,678)

-0.4%

 Less: Intersegment sales 

19,285

20,499

(1,214)

-5.9%

 Third Party Sales 

$          647,880

42%

$          649,344

48%

$      (1,464)

-0.2%

 Operating Income 

$            51,410

8%

$            32,525

5%

$     18,885

58.1%

 Metal Components 

 Total Sales 

$          920,845

50%

$          694,858

43%

$   225,987

32.5%

 Less: Intersegment sales 

105,535

87,264

18,271

20.9%

 Third Party Sales 

$          815,310

52%

$          607,594

44%

$   207,716

34.2%

 Operating Income 

$            50,541

6%

$            33,306

5%

$     17,235

51.7%

 Metal Coil Coating 

 Total Sales 

$          231,732

13%

$          246,582

15%

$    (14,850)

-6.0%

 Less: Intersegment sales 

131,230

132,980

(1,750)

-1.3%

 Third Party Sales 

$          100,502

6%

$          113,602

8%

$    (13,100)

-11.5%

 Operating Income 

$            19,080

19%

$            23,982

21%

$      (4,902)

-20.4%

 Consolidated 

 Total Sales 

$       1,819,743

99%

$       1,611,283

100%

$   208,460

12.9%

 Less: Intersegment sales 

256,050

240,743

15,307

6.4%

 Third Party Sales 

$       1,563,693

100%

$       1,370,540

100%

$   193,153

14.1%

 Operating Income 

$            56,831

4%

$            25,096

2%

$     31,735

126.5%

 

SOURCE NCI Building Systems, Inc.



RELATED LINKS

http://www.ncibuildingsystems.com