NCI Building Systems Reports Third Quarter Fiscal 2012 Results -- Adjusted Operating Income Increased 69% on 14% Revenue Growth --

-- Trailing 12 Month Adjusted EBITDA More Than Doubled, Reaching $65 Million --

-- Bookings Up 7% in Dollars and 15% in Tonnage --

-- Backlog up 26% Year-on-Year and 9% Sequentially --

-- Cash Flow from Operating Activities Reached $10 million for the Quarter --

HOUSTON, Sept. 5, 2012 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the third quarter ended July 29, 2012.

Third Quarter 2012 Financial Results

"Third quarter operating performance represented a solid start to our seasonally-stronger second half of fiscal 2012. Exclusive of the previously-disclosed one-time charges related to our acquisition of Metl-Span, our operating income was approximately $10 million, reaching the highest level in 11 quarters and significantly outpacing revenue growth," commented Norman C. Chambers, Chairman, President and Chief Executive Officer.

"Both our Components and Buildings groups achieved double-digit growth in operating income. Our Components business benefited from a 6-week contribution from our Metl-Span acquisition, which was completed on June 22, 2012, as well as successful sales initiatives and additional operating leverage associated with higher volumes. Results from our Buildings group reflected increased demand for both lower and higher complexity projects compared to last year's third quarter, primarily coming from the commercial and industrial sectors. Our Coatings group reported revenues and operating profits that were stable with last year due to a short-term shift in product mix from package to tolling sales in the quarter and the absorption of costs relating to the ramp-up of our new paint line in Middletown, Ohio, which is scheduled to begin production at the end of calendar 2012."

"Bookings were up 7% in dollars and 15% in volume over last year's third quarter, when bookings surged 42% over 2010 levels. Our backlog reached $282 million, which was 26% above last year's level and 9% above the prior quarter, representing the highest dollar value we have reported in 12 quarters."

"The significant improvement in our third quarter results took place in what continues to be a weak recovery period for the nonresidential construction industry. We have been able to leverage the competitive advantages of steel compared to other building products to capture additional business from existing customers and enter new markets, while managing costs through continuous operating efficiencies," Mr. Chambers said.

For the third quarter, sales were $298.5 million, up 13.9% from the $262.1 million reported in last year's third quarter. Gross profit margin expanded to 22.0% from 21.7%.

Engineering, selling, general and administrative expenses were $55.6 million, or 18.6% of revenues, compared to $50.9 million, or 19.4% of revenues, in last year's third quarter. The Company reported an operating profit of $7.0 million, up 7% over the $6.6 million in operating profit reported in the comparable 2011 period. In the 2012 third quarter, the Company incurred one-time charges related to its acquisition of Metl-Span of $2.9 million. Exclusive of these charges, operating income would have been $10.0 million up 68.8% from the adjusted operating income of $5.9 million earned in last year's third quarter. Adjusted EBITDA, defined as earnings before interest, taxes, depreciation and amortization, cash and other non-cash items, in accordance with the Company's credit agreement, reached $18.9 million, up 28% from $14.7 million in last year's third quarter.

For the third quarter of 2012, the Company reported a net loss applicable to common shares of $52.1 million, which included the previously-disclosed non-cash, one-time convertible preferred stock amendment charge of $48.8 million related to the elimination of NCI's quarterly dividend on its convertible preferred shares, the $2.9 million in acquisition-related expenses, and one-time debt extinguishment costs associated with the Metl-Span acquisition of $6.4 million. Exclusive of these charges, net income applicable to common shares would have been $0.9 million. In last year's third quarter, the Company incurred a net loss applicable to common shares of $13.1 million, which included the accrual of preferred stock dividends and accretion of $9.2 million and a non-cash beneficial conversion feature of $6.5 million.

The adjusted earnings per diluted common share, excluding the non-cash convertible preferred stock amendment charge and other special items, was $0.05; the reported net loss per diluted share was $2.74. This compares to an adjusted net loss per diluted share of $0.38 and a reported net loss per diluted share of $0.71 in last year's third quarter. The weighted average number of common shares used in the calculation of third quarter 2012 per share amounts was 19.0 million compared to 18.5 million last year.

Inventory levels of $113.2 million were similar to the $116.3 million in last year's third quarter, reflecting similar underlying tonnage. Annualized inventory turnover was 8.3 turns for the third quarter compared to 7.0 turns in the third quarter of last year and 7.2 turns in the second quarter of 2012.

Capital expenditures were $8.4 million; net cash from operating activities was $10.3 million.

Third Quarter Segment Performance

"Each of our business segments is making progress in what continues to be a challenging market environment, helped in part by our integrated business model," Mr. Chambers said.

The Coatings group continues to serve the Components and Buildings groups, while focusing its external sales on building share in the nonresidential construction market and extending its reach in new markets. Results for the first nine months of fiscal 2012 showed double-digit increases in revenues and operating income; third quarter results were flat with the prior year due to a less favorable business mix in the period and the incurrence of additional expenses associated with the new Middletown, Ohio coating plant.

In the Components group, third party sales increased 29%, while operating income improved 43%, benefiting from a 6-week contribution from the Company's Metl-Span acquisition, slight improvement in demand for the group's core products, the effectiveness of new marketing programs designed to capture larger volume business and the low operating cost structure that continues to distinguish this business unit.

The Buildings group produced a 15.2% increase in operating profit on sales growth of 6.7% in the third quarter.  Revenue growth resulted from improved demand from the industrial and retail sectors, and similar to the prior quarter, operating profitability benefited from a more favorable mix of higher and lower complexity projects.

Market Commentary

In the third quarter of fiscal 2012, low-rise nonresidential construction starts measured in square feet increased by 3.1% from the comparable period in fiscal 2011, as reported by McGraw-Hill.

McGraw-Hill forecasts that nonresidential construction activity measured in square feet will be approximately flat in calendar 2012 including commercial and industrial sector growth of 12% compared to calendar 2011. McGraw-Hill projects calendar year 2012 square footage at 690 million, compared to 691 million in 2011.

The American Institute of Architect's Architectural Billing Index published for July 2012 was 48.7 and the commercial and industrial component of the Index was 46.6.

Recent Developments

  • On June 22, 2012, the Company completed the acquisition of Metl-Span LLC ("Metl-Span") for $145 million in cash. Metl-Span manufactures energy-efficient and cost-effective insulated metal wall and roof panels for the commercial, industrial and cold storage segments of the nonresidential buildings product market. In connection with the funding of the acquisition, the Company completed the refinancing of its existing term loan with a $250 million senior secured credit facility, due May 2018.
  • The Company also eliminated all future dividend obligations on its convertible preferred stock through the previously-announced, one-time, non-cash issuance of 37,834 additional shares of convertible preferred stock to investment funds affiliated with Clayton, Dubilier & Rice, LLC, which own all the convertible preferred shares. This share issuance is reflected in the Company's third quarter 2012 financial statements.

Summary/Outlook

"We completed our sixth consecutive quarter of improved trailing twelve month EBITDA performance and each of our business units is positioned for a strong finish to fiscal 2012 and further growth in fiscal 2013," Mr. Chambers noted.

  • "Our Coatings group expects a pick-up in volume and revenue in this year's fourth quarter, and medium-term results should benefit from the start of production at our Middletown, Ohio plant beginning in December 2012, which will provide entry into a new geographic market and improved logistics to accommodate internal coating demand;
  • The Components business is expected to benefit not only from its position as a low-cost supplier, but also from a full quarter's contribution from the Metl-Span acquisition beginning in our fiscal 2012 fourth quarter and a modest improvement in demand for its core products; and
  • Our Buildings group will be working through its highest backlog in 12 quarters, a good shipping schedule through our October year-end and a broad product line of price-competitive, engineered structures that address the increasingly complex code and environmental requirements of customers across a broad range of industries.

As a result, we believe that fourth quarter 2012 results will show meaningful sequential and year-over-year improvement. Additionally, with the elimination of the dividend obligation on our convertible preferred shares, there will be a direct correlation between net income and earnings per diluted share," Mr. Chambers concluded.

The NCI Building Systems, Inc. third quarter conference call is scheduled for September 5, 2012, at 5:00 PM ET. Please call 1-800-860-2442 or 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 1-877-344-7529 or 412-317-0088 and the passcode 10016378# when prompted. The Webcast archive and taped replay will both be available two hours after the call through September 12, 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. The words "believe," "guidance," "potential," "anticipate," "plan," "expect," "should," "will," "forecast" or similar expressions are intended to identify forward-looking statements in this press release. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. However, 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, our ability to integrate the acquisition of Metl-Span L.L.C. with the Company's business or to realize the anticipated benefits of such acquisition, 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. See also the risk factors in the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2011 and in its subsequent quarterly reports on Form 10-Q, which 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, whether as a result of new information, future events, or otherwise. 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED STATEMENTS OF OPERATIONS 

 (Unaudited) 

 (In thousands, except per share data) 


















 For the Three Months
Ended 


 For the Nine Months
Ended 


July 29,


 July 31, 


July 29,


July 31,


2012


2011


2012


2011









 Sales 

$ 298,488


$262,138


$792,322


$ 677,789

 Cost of sales, excluding asset
   recoveries 

232,925


205,348


615,135


536,641

 Asset recoveries 

(22)


(93)


(22)


(93)

      Gross profit 

65,585


56,883


177,209


141,241


22.0%


21.7%


22.4%


20.8%









 Engineering, selling, general and
   administrative expenses 

55,605


50,889


156,110


151,227

 Acquisition-related costs 

2,946


-


4,836


-

 Restructuring recovery 

-


(575)


-


(575)

      Income (loss) from operations 

7,034


6,569


16,263


(9,411)









 Interest income 

44


26


100


103

 Interest expense 

(4,203)


(3,890)


(10,589)


(12,014)

 Debt extinguishment costs, net 

(6,437)


-


(6,437)


-

 Other income (expense), net 

(368)


(112)


11


1,166









 Income (loss) before income taxes 

(3,930)


2,593


(652)


(20,156)

 Provision (benefit) for income taxes 

(663)


-


705


(6,795)


16.9%


0.0%


-108.1%


33.7%









 Net income (loss) 

$  (3,267)


$    2,593


$  (1,357)


$ (13,361)

 Convertible preferred stock dividends
   and accretion 

-


9,176


16,352


21,666

 Convertible preferred stock beneficial
   conversion feature 

-


6,494


11,878


8,040

 Convertible preferred stock
   amendment  

48,803


-


48,803


-

 Net loss applicable to common shares 

$ (52,070)


$(13,077)


$(78,390)


$ (43,067)

















 Loss per common share: 








    Basic 

$ (2.74)


$ (0.71)


$ (4.16)


$ (2.35)

    Diluted 

$ (2.74)


$ (0.71)


$ (4.16)


$ (2.35)









 Weighted average number of common
   shares outstanding: 








    Basic 

18,997


18,467


18,830


18,292

    Diluted 

18,997


18,467


18,830


18,292









 Increase in sales 

13.9%




16.9%











 Gross profit percentage 

22.0%


21.7%


22.4%


20.8%









 Engineering, selling, general and
   administrative 
expenses percentage 

18.6%


19.4%


19.7%


22.3%









 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 
















 July 29, 


 October 30, 




2012


2011




 (Unaudited) 



 ASSETS 






 Cash and cash equivalents 

$           32,318


$           78,982


 Restricted cash 

1,375


2,836


 Accounts receivable, net 

111,913


95,381


 Inventories, net 

113,237


88,531


 Deferred income taxes 

22,127


20,405


 Income tax receivable 

1,906


1,272


 Prepaid expenses and other 

17,509


14,847


 Investments in debt and equity securities, at market 

4,382


4,483


 Assets held for sale 

4,884


4,874



 Total current assets 

309,651


311,611








 Property plant and equipment, net 

271,536


208,514


 Goodwill  

73,909


5,200


 Intangible assets, net 

54,938


24,254


 Other assets 

10,896


11,575



 Total assets 

$         720,930


$         561,154







 LIABILITIES AND STOCKHOLDERS' DEFICIT  





 Current portion of long-term debt 

$             2,500


$                    -


 Note payable 

858


292


 Accounts payable 

98,058


88,158


 Accrued compensation and benefits 

40,598


34,616


 Accrued interest 

470


1,309


 Other accrued expenses 

56,840


49,668



 Total current liabilities 

199,324


174,043








 Long-term debt 

234,546


130,699


 Deferred income taxes 

35,886


7,312


 Other long-term liabilities 

10,065


10,081



 Total long-term liabilities 

280,497


148,092








 Series B cumulative convertible participating preferred stock 

619,950


273,950








 Redeemable common stock  

-


759








 Common stock 

924


924


 Additional paid-in capital 

1,875


237,244


 Accumulated deficit 

(376,120)


(266,896)


 Accumulated other comprehensive loss 

(5,499)


(5,485)


 Treasury stock, at cost 

(21)


(1,477)



 Total stockholders' deficit 

(378,841)


(35,690)









 Total liabilities and stockholders' deficit 

$         720,930


$         561,154







NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)










For the Nine Months Ended


 July 29, 2012 


 July 31, 2011 





Cash flows from operating activities:




      Net loss

$     (1,357)


$    (13,361)

      Adjustments to reconcile net loss to net cash provided by 




            operating activities:




            Depreciation and amortization

21,992


25,249

            Share-based compensation expense

6,183


5,132

            Non-cash debt extinguishment costs

6,436


-

            Loss on sale of property, plant and equipment

20


41

            Provision for doubtful accounts

(409)


1,452

            Provision (benefit) for deferred income taxes

86


(6,227)

            Asset recoveries

(22)


(93)

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




            Accounts receivable

5,143


(11,440)

            Inventories

(16,330)


(34,938)

            Income tax receivable

(146)


14,209

            Prepaid expenses and other

(1,610)


(57)

            Accounts payable

(3,072)


21,250

            Accrued expenses

3,281


3,966

            Other, net

50


264





Net cash provided by operating activities

20,245


5,447





Cash flows from investing activities:




      Acquisition, net of cash acquired

(140,991)


-

      Capital expenditures

(22,288)


(14,735)

      Proceeds from sale of property, plant and equipment

55


582





Net cash used in investing activities

(163,224)


(14,153)





Cash flows from financing activities:




Decrease (increase) in restricted cash

1,461


(4)

Proceeds from ABL Facility

15,021


43

Payments on ABL Facility

(15,021)


(43)

Excess tax benefits from share-based compensation arrangements

1


-

Proceeds from term loan

237,499


-

Payments on term loan

(131,325)


(5,250)

Payments on note payable

(1,193)


(1,105)

Payment of financing costs

(8,679)


(100)

Payment of cash dividends on Convertible Preferred Stock

-


(11,039)

Purchase of treasury stock

(1,524)


(1,477)





Net cash provided by (used in) financing activities

96,240


(18,975)





Effect of exchange rate changes on cash and cash equivalents

75


(63)





Net decrease in cash and cash equivalents

(46,664)


(27,744)





Cash and cash equivalents at beginning of period

78,982


77,419





Cash and cash equivalents at end of period

$     32,318


$      49,675





 

NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

(Unaudited)

(In thousands)





















Three Months Ended


Three Months Ended


$

%


July 29, 2012


July 31, 2011


Inc/(Dec)

Change



% of



% of






Total



Total




Sales:


Sales



Sales




Metal coil coating

$ 54,342

15


$ 54,472

16


$ (130)

-0.2%

Metal components

142,092

39


116,050

36


26,042

22.4%

Engineered building systems

164,265

46


155,046

48


9,219

5.9%

Total sales

360,699

100


325,568

100


35,131

10.8%

Less: Intersegment sales

62,211

17


63,430

19


(1,219)

-1.9%

Total net sales

$298,488

83


$262,138

81


$ 36,350

13.9%












% of



% of






Total



Total




Operating income (loss):


Sales



Sales




Metal coil coating

$ 5,112

9


$ 5,219

10


$ (107)

-2.1%

Metal components

9,372

7


6,545

6


2,827

43.2%

Engineered building systems

9,078

6


7,877

5


1,201

15.2%

Corporate

(16,528)

-


(13,072)

-


(3,456)

-26.4%

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

$ 7,034

2


$ 6,569

3


$ 465

7.1%




















Nine Months
Ended


Nine Months Ended


$

%


July 29, 2012


July 31, 2011


Inc/(Dec)

Change



% of



% of






Total



Total




Sales:


Sales



Sales




Metal coil coating

$ 152,264

16


$ 144,673

17


$ 7,591

5.2%

Metal components

354,586

37


309,730

37


44,856

14.5%

Engineered building systems

453,278

47


386,248

46


67,030

17.4%

Total sales

960,128

100


840,651

100


119,477

14.2%

Less: Intersegment sales

167,806

17


162,862

19


4,944

3.0%

Total net sales

$792,322

83


$ 677,789

81


$114,533

16.9%












% of



% of






Total



Total




Operating income (loss):


Sales

 



Sales

 




Metal coil coating

$ 15,304

10


$ 13,041

9


$ 2,263

17.4%

Metal components

23,931

7


14,298

5


9,633

67.4%

Engineered building systems

23,414

5


2,313

1


21,101

912.3%

Corporate

(46,386)

-


(39,063)

-


(7,323)

-18.7%

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

$ 16,263

2


$ (9,411)

(1)


$ 25,674

272.8%










 

 

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 JULY 29, 2012 AND JULY 31, 2011

(Unaudited)

(In thousands)













 For the Three Months Ended July 29, 2012 


 Metal
Coil
Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 











Operating income (loss), GAAP basis

$  5,112


$          9,372


$     9,078


$   (16,528)


$           7,034

Acquisition-related costs

-


-


-


2,946


2,946

Asset recovery

-


(22)


-


-


(22)

"Adjusted" operating income (loss) (1)

$  5,112


$          9,350


$     9,078


$   (13,582)


$            9,958






















 For the Three Months Ended July 31, 2011 


 Metal Coil Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 











Operating income (loss), GAAP basis

$  5,219


$          6,545


$     7,877


$   (13,072)


$            6,569

Asset recovery

-


(93)


-


-


(93)

Restructuring recovery

-


-


(575)


-


(575)

"Adjusted" operating income (loss) (1)

$  5,219


$          6,452


$     7,302


$   (13,072)


$           5,901





















(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.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) EXCLUDING SPECIAL CHARGES

FOR THE NINE MONTHS ENDED JULY 29, 2012 AND JULY 31, 2011

(Unaudited)

(In thousands)














 For the Nine Months Ended July 29, 2012 



 Metal Coil Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 













Operating income (loss), GAAP basis

$ 15,304


$     23,931


$    23,414


$  (46,386)


$        16,263


 

Acquisition-related costs

-


-


-


4,836


4,836


Actuarial determined general liability self-insurance











     charges (recovery)

-


(1,929)


-


-


(1,929)


Executive retirement

-


-


-


508


508


Asset recovery

-


(22)


-


-


(22)


"Adjusted" operating income (loss) (1)

$ 15,304


$     21,980


$    23,414


$  (41,042)


$        19,656

























 For the Nine Months Ended July 31, 2011 



 Metal Coil Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 













Operating income (loss), GAAP basis

$ 13,041


$     14,298


$      2,313


$  (39,063)


$        (9,411)

-

Asset recovery

-


(93)


-


-


(93)


Restructuring recovery

-


-


(575)


-


(575)


Pre-acquisition contingency adjustment

-


-


252


-


252


Actuarial determined general liability self-insurance











     charges (recovery)

-


2,398


-


-


2,398


"Adjusted" operating income (loss) (1)

$ 13,041


$     16,603


$      1,990


$  (39,063)


$        (7,429)
























(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")

(Unaudited)

(In thousands)


















4th Qtr


1st Qtr


2nd Qtr


3rd Qtr


Trailing
12 Months


 October 30, 


 January 29, 


 April 29, 


 July 29, 


July 29,


2011


2012


2012


2012


2012

Net income 

$    3,411


$         589


$   1,321


$  (3,267)


$   2,054

Add:










Depreciation and amortization

6,753


6,158


5,841


7,248


26,000

Consolidated interest expense, net

3,685


3,296


3,034


4,159


14,174

Provision (benefit) for income taxes

398


426


942


(663)


1,103

Acquisition-related costs

-


396


1,494


2,946


4,836

Cash restructuring charges (recovery)

283


-


-


-


283

Transaction costs

-


-


-


6,437


6,437

Executive retirement

-


-


508


-


508

Non-cash charges:










Stock-based compensation

1,776


1,972


2,119


2,090


7,957

Asset impairments (recoveries)

1,214


-


-


(22)


1,192

Embedded derivative

(6)


(5)


(6)


(5)


(22)











Adjusted EBITDA (1)

$  17,514


$    12,832


$ 15,253


$ 18,923


$ 64,522
































4th Qtr


1st Qtr


2nd Qtr


3rd Qtr


Trailing 12 Months


 October 31, 


 January 30, 


May 1,


 July 31, 


 July 31, 


2010


2011


2011


2011


2011

Net loss

$   (5,436)


$   (12,725)


$  (3,229)


$  2,593


$ (18,797)

Add:










Depreciation and amortization

7,309


7,236


7,187


7,187


28,919

Consolidated interest expense, net

4,258


4,177


3,870


3,864


16,169

Benefit from income taxes

(1,794)


(5,009)


(1,786)


-


(8,589)

Cash restructuring charges (recovery)

1,628


-


-


(575)


1,053

Transaction costs

(250)


-


-


-


(250)

Non-cash charges:










Stock-based compensation

1,375


1,685


1,671


1,776


6,507

Asset impairments (recoveries)

221


-


-


(93)


128

Embedded derivative

(7)


(7)


(6)


(6)


(26)

Pre-acquisition contingency adjustment

178


252


-


-


430











Adjusted EBITDA (1)

$    7,482


$     (4,391)


$   7,707


$ 14,746


$ 25,544





















(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 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 Nine Months
Ended


 July 29, 

 July 31, 


 July 29, 

 July 31, 


2012

2011


2012

2011

Loss per diluted common share, GAAP basis

$ (2.74)

$ (0.71)


$ (4.16)

$ (2.35)

Convertible preferred stock beneficial conversion feature and amendment 

2.57

0.35


3.22

0.44

Restructuring charges (recovery), net of taxes

-

(0.02)


-

(0.02)

Acquisition-related costs, net of taxes

0.14

-


0.20

-

Debt extinguishment costs, net of taxes

0.21

-


0.21

-

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

-

-


(0.06)

0.08

Executive retirement, net of taxes

-

-


0.02

-

Asset impairments (recovery), net of taxes

(0.00)

(0.00)


(0.00)

(0.00)

Gain on embedded derivative, net of taxes

(0.00)

(0.00)


(0.00)

(0.00)

Pre-acquisition contingency adjustment, net of taxes

-

-


-

0.01

Adjustment for participating securities interest in earnings

(0.13)

-


-

-

"Adjusted" loss per diluted common share (1)

$   0.05

$ (0.38)


$ (0.57)

$  (1.85)














Fiscal Three Months
Ended


Fiscal Nine Months
Ended


 July 29, 

 July 31, 


 July 29, 

 July 31, 


2012

2011


2012

2011

Net loss applicable to common shares, GAAP basis

$ (52,070)

$ (13,077)


$ (78,390)

$ (43,067)

Convertible preferred stock beneficial conversion feature and amendment 

48,803

6,494


60,681

8,040

Restructuring charges (recovery), net of taxes

-

(354)


-

(354)

Acquisition-related costs, net of taxes

2,683

-


3,847

-

Debt extinguishment, net of taxes

3,965

-


3,965

-

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

-

-


(1,188)

1,477

Executive retirement, net of taxes

-

-


313

-

Asset impairments (recovery), net of taxes

(14)

(57)


(14)

(57)

Gain on embedded derivative, net of taxes

(4)

(4)


(10)

(12)

Pre-acquisition contingency adjustment, net of taxes

-

-


-

181

Adjustment for participating securities interest in earnings

(2,445)

-


-

-

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

$ 918

$ (6,998)


$ (10,795)

$ (33,792)



















 (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)
























%


 3rd Qtr 2012 



 3rd Qtr 2011 


 Inc/(Dec) 

 Change 

 Metal Coil Coating 









 Total Sales 

$ 54,342

15%


$ 54,472

16%

(130)

0%


 Less:  Intersegment sales 

34,927



34,651


276

1%


 Third Party Sales 

19,415

7%


19,821

8%

(406)

-2%











 Operating Income (Loss) 

5,112

26%


5,219

26%

(107)

-2%










 Metal Components 









 Total Sales 

142,092

39%


116,050

36%

26,042

22%


 Less:  Intersegment sales 

22,278



23,049


(771)

-3%


 Third Party Sales 

119,814

40%


93,001

35%

26,813

29%











 Operating Income (Loss) 

9,372

8%


6,545

7%

2,827

43%










 Engineered Building Systems 









 Total Sales 

164,265

46%


155,046

48%

9,219

6%


 Less:  Intersegment sales 

5,006



5,730


(724)

-13%


 Third Party Sales 

159,259

53%


149,316

57%

9,943

7%











 Operating Income (Loss) 

9,078

6%


7,877

5%

1,201

15%










 Consolidated 









 Total Sales 

360,699

100%


325,568

100%

35,131

11%


 Less:  Intersegment sales 

62,211



63,430


(1,219)

-2%


 Third Party Sales 

298,488

100%


262,138

100%

36,350

14%











 Operating Income (Loss) 

$  7,034

2%


$  6,569

3%

465

7%





















 YTD 



 YTD 



%



 3rd Qtr 2012 



 3rd Qtr 2011 


 Inc/(Dec) 

Change

 Metal Coil Coating 









 Total Sales 

$ 152,264

16%


$ 144,673

17%

7,591

5%


 Less:  Intersegment sales 

93,039



90,674


2,365

3%


 Third Party Sales 

59,225

7%


53,999

8%

5,226

10%











 Operating Income (Loss) 

15,304

26%


13,041

24%

2,263

17%










 Metal Components 









 Total Sales 

354,586

37%


309,730

37%

44,856

14%


 Less:  Intersegment sales 

62,152



60,100


2,052

3%


 Third Party Sales 

292,434

37%


249,630

37%

42,804

17%











 Operating Income (Loss) 

23,931

8%


14,298

6%

9,633

67%










 Engineered Building Systems 









 Total Sales 

453,278

47%


386,248

46%

67,030

17%


 Less:  Intersegment sales 

12,615



12,088


527

4%


 Third Party Sales 

440,663

56%


374,160

55%

66,503

18%











 Operating Income (Loss) 

23,414

5%


2,313

1%

21,101

912%










 Consolidated 









 Total Sales 

960,128

100%


840,651

100%

119,477

14%


 Less:  Intersegment sales 

167,806



162,862


4,944

3%


 Third Party Sales 

792,322

100%


677,789

100%

114,533

17%











 Operating Income (Loss) 

$  16,263

2%


$  (9,411)

-1%

25,674

273%











 

SOURCE NCI Building Systems, Inc.



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