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2014

NCI Building Systems Reports Third Quarter Fiscal 2013 Results

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

Third Quarter Highlights:

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

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

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

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

Third Quarter 2013 Results

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

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

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

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

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

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

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

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

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

Third Quarter 2013 Segment Performance

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

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

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

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

Market Commentary

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

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

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

Summary/Outlook

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

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

Conference Call Information

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

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

Contact:

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

Forward-Looking Statements

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

 

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED STATEMENTS OF OPERATIONS 

 (Unaudited) 

 (In thousands, except per share data) 





















 Fiscal Three Months Ended 


 Fiscal Nine Months Ended 



 July 28, 


 July 29, 


 July 28, 


 July 29, 



2013


2012


2013


2012










 Sales 


$ 317,201


$ 298,488


$ 908,184


$ 792,322

 Cost of sales 


250,163


232,903


719,440


615,113

      Gross profit 


67,038


65,585


188,744


177,209



21.1%


22.0%


20.8%


22.4%










 Engineering, selling, general and administrative expenses 


62,761


55,605


186,014


156,110

 Acquisition-related costs 


-


2,946


-


4,836

      Income from operations 


4,277


7,034


2,730


16,263










 Interest income 


29


44


101


100

 Interest expense 


(5,159)


(4,203)


(17,624)


(10,589)

 Debt extinguishment costs, net 


(21,491)


(6,437)


(21,491)


(6,437)

 Other income (expense), net 


219


(368)


859


11










 Loss before income taxes 


(22,125)


(3,930)


(35,425)


(652)

 Provision (benefit) for income taxes 


(9,933)


(663)


(14,264)


705



44.9%


16.9%


40.3%


-108.1%










 Net loss 


$ (12,192)


$   (3,267)


$ (21,161)


$   (1,357)

 Convertible preferred stock dividends and accretion 


-


-


-


16,352

 Convertible preferred stock beneficial conversion feature 


-


-


-


11,878

 Convertible preferred stock amendment 


-


48,803


-


48,803

 Net loss applicable to common shares 


$ (12,192)


$ (52,070)


$ (21,161)


$ (78,390)



















 Loss per common share: 









    Basic 


$     (0.19)


$     (2.74)


$     (0.62)


$     (4.16)

    Diluted 


$     (0.19)


$     (2.74)


$     (0.62)


$     (4.16)










 Weighted average number of common shares outstanding: 









    Basic 


64,217


18,997


34,290


18,830

    Diluted 


64,217


18,997


34,290


18,830










 Increase in sales 


6.3%




14.6%












 Gross profit percentage 


21.1%


22.0%


20.8%


22.4%










 Engineering, selling, general and administrative expenses percentage 


19.8%


18.6%


20.5%


19.7%










 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 










 July 28, 


 October 28, 




2013


2012




 (Unaudited) 



 ASSETS 





 Cash and cash equivalents 

$       16,149


$       55,158


 Restricted cash 

-


1,375


 Accounts receivable, net 

118,905


133,475


 Inventories, net 

135,201


106,015


 Deferred income taxes 

36,933


21,926


 Income tax receivable 

2,068


549


 Prepaid expenses and other 

21,709


16,864


 Investments in debt and equity securities, at market 

4,601


4,076


 Assets held for sale 

2,879


2,397



 Total current assets 

338,445


341,835








 Property, plant and equipment, net 

262,118


268,875


 Goodwill  


75,226


76,746


 Intangible assets, net 

49,989


53,028


 Deferred financing costs, net 

4,538


11,000



 Total assets 

$     730,316


$     751,484







 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 





 Current portion of long-term debt 

$         2,384


$         2,500


 Note payable 

835


515


 Accounts payable 

103,707


113,177


 Accrued compensation and benefits 

40,641


43,066


 Accrued interest 

255


345


 Other accrued expenses 

56,316


60,455



 Total current liabilities 

204,138


220,058








 Long-term debt, net 

240,991


234,444


 Deferred income taxes 

35,592


35,565


 Other long-term liabilities 

11,866


11,995



 Total long-term liabilities 

288,449


282,004








 Series B cumulative convertible participating preferred stock 

-


619,950








 Common stock 

1,466


925


 Additional paid-in capital 

634,011


4,991


 Accumulated deficit 

(391,011)


(369,850)


 Accumulated other comprehensive loss 

(6,645)


(6,568)


 Treasury stock, at cost 

(92)


(26)



 Stockholders' equity (deficit) 

237,729


(370,528)









 Total liabilities and stockholders' equity (deficit) 

$     730,316


$     751,484







 

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)






 Fiscal Nine Months Ended 


July 28, 2013


 July 29, 2012 





Cash flows from operating activities:




      Net loss

$      (21,161)


$          (1,357)

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




            Depreciation and amortization

29,991


21,992

            Share-based compensation expense

10,335


6,183

            Non-cash debt extinguishment costs

17,582


6,436

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

(38)


20

            Provision for doubtful accounts

1,424


(409)

            Provision (benefit) from deferred income taxes

(14,865)


86

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




            Accounts receivable

13,146


5,143

            Inventories

(29,186)


(16,330)

            Income tax receivable

(1,859)


(146)

            Prepaid expenses and other

(2,624)


(1,610)

            Accounts payable

(5,561)


(3,072)

            Accrued expenses

(5,160)


3,281

            Other, net

(1,167)


28





Net cash (used in) provided by operating activities

(9,143)


20,245





Cash flows from investing activities:




      Acquisition, net of cash acquired

-


(140,991)

      Capital expenditures

(17,545)


(22,288)

      Proceeds from sale of property, plant and equipment

-


55





Net cash used in investing activities

(17,545)


(163,224)





Cash flows from financing activities:




Proceeds from stock options exercised

674


-

Decrease in restricted cash

1,375


1,461

Proceeds on term loan

-


237,499

Payments on term loan

(10,375)


(131,325)

Payments on note payable

(1,239)


(1,193)

Proceeds from Amended ABL Facility

5,000


-

Payment of financing costs

(6,215)


(8,679)

Excess tax benefits from share-based compensation arrangements

974


1

Purchase of treasury stock

(2,438)


(1,524)





Net cash (used in) provided by financing activities

(12,244)


96,240

Effect of exchange rate changes on cash and cash equivalents

(77)


75

Net decrease in cash and cash equivalents

(39,009)


(46,664)





Cash and cash equivalents at beginning of period

55,158


78,982





Cash and cash equivalents at end of period

$       16,149


$          32,318





 

NCI Building Systems, Inc

Business Segments

(Unaudited)

(In thousands)





















Three Months Ended


Three Months Ended


$

%


July 28, 2013


July 29, 2012


Inc/(Dec)

Change



% of 



% of 






Total



Total




Sales:


Sales



Sales




     Metal coil coating

$    56,478

15


$   54,342

15


$     2,136

3.9%

     Metal components

161,008

43


142,092

39


18,916

13.3%

     Engineered building systems

158,369

42


164,265

46


(5,896)

-3.6%

          Total sales

375,855

100


360,699

100


15,156

4.2%

     Less: Intersegment sales

58,654

16


62,211

17


(3,557)

-5.7%

          Total net sales

$  317,201

84


$ 298,488

83


$   18,713

6.3%












 % of 



 % of 




Operating income (loss):


Sales



Sales




     Metal coil coating

$      5,521

10


$     5,112

9


$        409

8.0%

     Metal components

8,054

5


9,372

7


(1,318)

-14.1%

     Engineered building systems

6,123

4


9,078

6


(2,955)

-32.6%

     Corporate

(15,421)

-


(16,528)

-


1,107

6.7%

          Total operating income (loss) (% of sales)

$      4,277

1


$     7,034

2


$   (2,757)

-39.2%




















Nine Months Ended


Nine Months Ended


$

%


 July 28, 2013 


 July 29, 2012 


Inc/(Dec)

Change



% of 



% of 






Total



Total




Sales:


Sales



Sales




     Metal coil coating

$  155,539

15


$ 152,264

16


$     3,275

2.2%

     Metal components

462,075

43


354,586

37


107,489

30.3%

     Engineered building systems

454,030

42


453,278

47


752

0.2%

          Total sales

1,071,644

100


960,128

100


111,516

11.6%

     Intersegment sales

163,460

15


167,806

17


(4,346)

-2.6%

          Total net sales

$  908,184

85


$ 792,322

83


$ 115,862

14.6%












 % of 



 % of 




Operating income (loss):


Sales



Sales




     Metal coil coating

$    15,818

10


$   15,304

10


$        514

3.4%

     Metal components

19,263

4


23,931

7


(4,668)

-19.5%

     Engineered building systems

14,360

3


23,414

5


(9,054)

-38.7%

     Corporate

(46,711)

-


(46,386)

-


(325)

-0.7%

          Total operating income (loss) (% of sales)

$      2,730

0


$   16,263

2


$ (13,533)

-83.2%



















 


NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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

FOR THE THREE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012

(Unaudited)

(In thousands)

















 For the Three Months Ended July 28, 2013 




 Metal Coil Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 














Operating income (loss), GAAP basis (2)


$      5,521


$        8,054


$      6,123


$  (15,421)


$          4,277








































 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


"Adjusted" operating income (loss) (1)


$      5,112


$        9,372


$      9,078


$  (13,582)


$          9,980













(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 July 28, 2013.

 

 


NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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

FOR THE NINE MONTHS ENDED JULY 28, 2013 AND JULY 29, 2012

(Unaudited)

(In thousands)

















 For the Nine Months Ended July 28, 2013 




 Metal Coil Coating 


 Metal Components 


 Engineered Building Systems 


 Corporate 


 Consolidated 














Operating income (loss), GAAP basis (2)


$    15,818


$      19,263


$     14,360


$  (46,711)


$         2,730








































 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


"Adjusted" operating income (loss) (1)


$    15,304


$      22,002


$     23,414


$  (41,042)


$       19,678













(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 nine months ended July 28, 2013.

 

 

 


NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER NONCASH ITEMS ("ADJUSTED EBITDA")

(Unaudited)

(In thousands)
















4th Qtr


1st Qtr


2nd Qtr


3rd Qtr


Trailing 12 Months


 October 28, 


 January 27, 


 April 28, 


 July 28, 


 July 28, 


2012


2013


2013


2013


2013

Net income (loss)

$         6,270


$        (3,627)


$  (5,342)


$(12,192)


$                (14,891)

Add:










     Depreciation and amortization

10,355


9,122


8,809


9,066


37,352

     Consolidated interest expense, net

6,226


6,244


6,149


5,130


23,749

     Provision (benefit) for income taxes

3,379


(1,825)


(2,506)


(9,933)


(10,885)

     Acquisition-related costs

153


-


-


-


153

     Debt extinguishment costs, net

-


-


-


21,491


21,491

     Non-cash charges:










          Stock-based compensation

3,116


3,442


3,445


3,448


13,451

          Asset impairments 

13


-


-


-


13

          Embedded derivative

(5)


(5)


(4)


(50)


(64)











     Adjusted EBITDA (1)

$       29,507


$       13,351


$  10,551


$  16,960


$                  70,369
































4th Qtr


1st Qtr


2nd Qtr


3rd Qtr


Trailing 12 Months


 October 30, 


 January 29, 


 April 29, 


 July 29, 


 July 29, 


2011


2012


2012


2012


2012

Net income (loss)

$         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

     Debt extinguishment costs, net

-


-


-


6,437


6,437

     Cash restructuring charges 

283


-


-


-


283

     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











(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 Nine Months Ended


 July 28, 

 July 29, 


 July 28, 

 July 29, 


2013

2012


2013

2012

Net loss per diluted common share, GAAP basis

(0.19)

(2.74)


(0.62)

(4.16)

Convertible preferred stock beneficial conversion feature and amendment

-

2.57


-

3.22

Acquisition-related costs, net of taxes

-

0.14


-

0.20

Debt extinguishment costs, net of taxes

0.21

0.21


0.39

0.21

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

-

-


-

(0.06)

Executive retirement, net of taxes

-

-


-

0.02

Adjustment for participating securities interest in earnings, net of taxes

-

(0.13)


-

-

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

0.02

0.05


(0.23)

(0.57)














Fiscal Three Months Ended


Fiscal Nine Months Ended


 July 28, 

 July 29, 


 July 28, 

 July 29, 


2013

2012


2013

2012

Net loss applicable to common shares, GAAP basis

$(12,192)

$(52,070)


$(21,161)

$(78,390)

Convertible preferred stock beneficial conversion feature and amendment

-

48,803


-

60,681

Acquisition-related costs, net of taxes

-

2,683


-

3,847

Debt extinguishment costs, net of taxes

13,238

3,965


13,238

3,965

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

-

-


-

(1,188)

Executive retirement, net of taxes

-

-


-

313

Adjustment for participating securities interest in earnings, net of taxes

-

(2,458)


-

-

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

$    1,046

$       923


$  (7,923)

$(10,772)













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

 

 

 NCI Building Systems, Inc. 

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

(Unaudited)

(In thousands)



























%



 3rd Qtr 2013 



 3rd Qtr 2012 


 Inc/(Dec) 

 Change 

 Metal Coil Coating 









 Total Sales 

56,478

15%


54,342

15%

2,136

3.9%


 Less: Intersegment sales 

33,450



34,927


(1,477)

-4.2%


 Third Party Sales 

23,028

7%


19,415

7%

3,613

18.6%











 Operating Income (Loss) 

5,521

24%


5,112

26%

409

8.0%










 Metal Components 









 Total Sales 

161,008

43%


142,092

39%

18,916

13.3%


 Less: Intersegment sales 

20,567



22,278


(1,711)

-7.7%


 Third Party Sales 

140,441

44%


119,814

40%

20,627

17.2%











 Operating Income (Loss) 

8,054

6%


9,372

8%

(1,318)

-14.1%










 Engineered Building Systems 









 Total Sales 

158,369

42%


164,265

46%

(5,896)

-3.6%


 Less: Intersegment sales 

4,637



5,006


(369)

-7.4%


 Third Party Sales 

153,732

49%


159,259

53%

(5,527)

-3.5%











 Operating Income (Loss) 

6,123

4%


9,078

6%

(2,955)

-32.6%










 Consolidated 









 Total Sales 

375,855

100%


360,699

100%

15,156

4.2%


 Intersegment 

58,654



62,211


(3,557)

-5.7%


 Third Party Sales 

317,201

100%


298,488

100%

18,713

6.3%











 Operating Income (Loss) 

4,277

1%


7,034

2%

(2,757)

-39.2%





















 YTD 



 YTD 



%



 3rd Qtr 2013 



 3rd Qtr 2012 


 Inc/(Dec) 

Change

 Metal Coil Coating 









 Total Sales 

155,539

15%


152,264

16%

3,275

2.2%


 Less: Intersegment sales 

91,403



93,039


(1,636)

-1.8%


 Third Party Sales 

64,136

7%


59,225

7%

4,911

8.3%











 Operating Income (Loss) 

15,818

25%


15,304

26%

514

3.4%










 Metal Components 









 Total Sales 

462,075

43%


354,586

37%

107,489

30.3%


 Less: Intersegment sales 

55,925



62,152


(6,227)

-10.0%


 Third Party Sales 

406,150

45%


292,434

37%

113,716

38.9%











 Operating Income (Loss) 

19,263

5%


23,931

8%

(4,668)

-19.5%










 Engineered Building Systems 









 Total Sales 

454,030

42%


453,278

47%

752

0.2%


 Less: Intersegment sales 

16,132



12,615


3,517

27.9%


 Third Party Sales 

437,898

48%


440,663

56%

(2,765)

-0.6%











 Operating Income (Loss) 

14,360

3%


23,414

5%

(9,054)

-38.7%










 Consolidated 









 Total Sales 

1,071,644

100%


960,128

100%

111,516

11.6%


 Less: Intersegment sales 

163,460



167,806


(4,346)

-2.6%


 Third Party Sales 

908,184

100%


792,322

100%

115,862

14.6%











 Operating Income (Loss) 

2,730

0%


16,263

2%

(13,533)

-83.2%



















 

 

SOURCE NCI Building Systems, Inc.



RELATED LINKS
http://www.ncigroup.com

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