NCI Restates Financial Statements; Company Revises Outlook for Second Quarter Earnings

Apr 12, 2001, 01:00 ET from NCI Building Systems, Inc.

    HOUSTON, April 12 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE:   NCS)
 today announced that it has determined that the Company's audited financial
 statements for the fiscal year ended October 31, 2000 as well as the results
 for the quarter ended January 31, 2001 are required to be restated due to
 accounting errors that understated certain liabilities related to inventories.
 The revisions do not involve the loss of cash and will have no effect on the
 net sales reported for any of these periods.  The Company said that it will
 file amended reports on Form 10-K/A for fiscal 2000 and on Form 10-Q/A for the
 first quarter of fiscal 2001.  NCI indicated that some adjustment may also be
 required to the financial statements for the third and fourth quarters of
 fiscal 1999.
     NCI has identified that the Company's management information system, which
 was installed in May 1999, routinely processed some accounting entries
 incorrectly.  The cumulative impact of these errors, which was masked by
 certain improper manual accounting entries, did not become apparent in the
 year-end closing processes or until after the results for the first quarter of
 fiscal 2001 were reported.  NCI said that its accounting practices have been
 reviewed and that the errors have been identified and procedures implemented
 to prevent their reoccurrence.  The individuals responsible for the improper
 entries are no longer with the Company.
     The preliminary revised net income for fiscal 2000 is $43.8 million, or
 $2.40 per diluted share, compared with the previously reported net income of
 $51.9 million, or $2.84 per diluted share.  For the three months ended
 January 31, 2001, the preliminary revised net income is $2.6 million, or $0.15
 per diluted share, versus the previously reported $4.0 million, or $0.22 per
 diluted share.  The preliminary numbers presented above are subject to
 completion of the analysis by the Company and the audit being conducted by
 Ernst & Young LLP.
     NCI said that it is experiencing a slowdown in incoming orders as a result
 of the lower level of construction activity nationwide.  As a result of this
 trend, the Company believes that net sales for the second fiscal quarter
 ending April 30, 2001 will be down from the $216.6 million reported in the
 first quarter of fiscal 2001.  The Company said that it expects net income for
 the current fiscal quarter will be significantly below the restated net income
 for the first fiscal quarter.
     NCI Building Systems, Inc. is one of North America's largest integrated
 manufacturers of metal products for the non-residential building industry.
 The Company operates 40 manufacturing and distribution facilities located in
 18 states and Mexico.
     Some statements contained in this release are "forward-looking"
 statements, as defined in the Private Securities Litigation Reform Act of
 1995.  Actual performance of the Company may differ from that projected in
 such statements as a result of factors such as industry cyclicality and
 seasonality, adverse weather conditions, fluctuations in customer demand and
 order patterns, raw material pricing, competitive activity and pricing
 pressure and general economic conditions affecting the construction industry.
 Investors should refer to statements regularly filed by the Company in its
 annual report to the Securities and Exchange Commission on Form 10-K, its
 Quarterly Reports to the SEC on Form 10-Q and its current reports to the SEC
 on Form 8-K and other filings with the SEC for a discussion of factors which
 could affect the Company's operations and forward-looking statements made in
 this communication.  The Company expressly disclaims any obligation to release
 publicly any updates or revisions to these forward-looking statements to
 reflect any changes in expectations.
 
 

SOURCE NCI Building Systems, Inc.
    HOUSTON, April 12 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE:   NCS)
 today announced that it has determined that the Company's audited financial
 statements for the fiscal year ended October 31, 2000 as well as the results
 for the quarter ended January 31, 2001 are required to be restated due to
 accounting errors that understated certain liabilities related to inventories.
 The revisions do not involve the loss of cash and will have no effect on the
 net sales reported for any of these periods.  The Company said that it will
 file amended reports on Form 10-K/A for fiscal 2000 and on Form 10-Q/A for the
 first quarter of fiscal 2001.  NCI indicated that some adjustment may also be
 required to the financial statements for the third and fourth quarters of
 fiscal 1999.
     NCI has identified that the Company's management information system, which
 was installed in May 1999, routinely processed some accounting entries
 incorrectly.  The cumulative impact of these errors, which was masked by
 certain improper manual accounting entries, did not become apparent in the
 year-end closing processes or until after the results for the first quarter of
 fiscal 2001 were reported.  NCI said that its accounting practices have been
 reviewed and that the errors have been identified and procedures implemented
 to prevent their reoccurrence.  The individuals responsible for the improper
 entries are no longer with the Company.
     The preliminary revised net income for fiscal 2000 is $43.8 million, or
 $2.40 per diluted share, compared with the previously reported net income of
 $51.9 million, or $2.84 per diluted share.  For the three months ended
 January 31, 2001, the preliminary revised net income is $2.6 million, or $0.15
 per diluted share, versus the previously reported $4.0 million, or $0.22 per
 diluted share.  The preliminary numbers presented above are subject to
 completion of the analysis by the Company and the audit being conducted by
 Ernst & Young LLP.
     NCI said that it is experiencing a slowdown in incoming orders as a result
 of the lower level of construction activity nationwide.  As a result of this
 trend, the Company believes that net sales for the second fiscal quarter
 ending April 30, 2001 will be down from the $216.6 million reported in the
 first quarter of fiscal 2001.  The Company said that it expects net income for
 the current fiscal quarter will be significantly below the restated net income
 for the first fiscal quarter.
     NCI Building Systems, Inc. is one of North America's largest integrated
 manufacturers of metal products for the non-residential building industry.
 The Company operates 40 manufacturing and distribution facilities located in
 18 states and Mexico.
     Some statements contained in this release are "forward-looking"
 statements, as defined in the Private Securities Litigation Reform Act of
 1995.  Actual performance of the Company may differ from that projected in
 such statements as a result of factors such as industry cyclicality and
 seasonality, adverse weather conditions, fluctuations in customer demand and
 order patterns, raw material pricing, competitive activity and pricing
 pressure and general economic conditions affecting the construction industry.
 Investors should refer to statements regularly filed by the Company in its
 annual report to the Securities and Exchange Commission on Form 10-K, its
 Quarterly Reports to the SEC on Form 10-Q and its current reports to the SEC
 on Form 8-K and other filings with the SEC for a discussion of factors which
 could affect the Company's operations and forward-looking statements made in
 this communication.  The Company expressly disclaims any obligation to release
 publicly any updates or revisions to these forward-looking statements to
 reflect any changes in expectations.
 
 SOURCE  NCI Building Systems, Inc.