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NCI Building Systems Reports Fourth Quarter and 2013 Fiscal Year End Results

HOUSTON, Dec. 10, 2013 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the fourth quarter and fiscal year ended November 3, 2013. The 2013 fourth quarter and fiscal year included an extra week versus the 2012 fourth quarter and fiscal year.

Fourth Quarter Highlights:

  • Sales rose 10.7% to $400.2 million, compared to the prior year's fourth quarter, and increased 26%, sequentially.
  • Gross profit increased 10.8% to $87.3 million from $78.8 million in the comparable quarter last year, and rose 30% from $67.0 million in the previous quarter.
  • Adjusted EBITDA was $30.1 million up slightly from the prior fiscal year, but rose 77% from $17.0 million in the third quarter of 2013.
  • Net income per diluted common share was $0.11, up from $0.08 per diluted share in the prior fiscal year and a net loss of $0.19 per diluted common share in the prior quarter.
  • Quarter-end backlog increased by 6% to $322.2 million compared to $303.6 million for the same period in fiscal 2012 and $319.2 million in the third quarter of 2013.

Fiscal 2013 Highlights:

  • Sales rose 13% to $1.3 billion from $1.2 billion in the prior year. 
  • Gross profit increased 8% to $276.0 million from $256.0 million in fiscal 2012.
  • Adjusted EBITDA was $70.9 million declining from last fiscal year's $76.5 million.
  • Adjusted net income applicable to diluted common shares was $0.03 million or $0.00 per diluted common share, up from an adjusted net loss of $0.25 per diluted common share in the prior fiscal year.
  • Stockholders' equity increased $623.3 million to $252.8 million from negative $370.5 million primarily due to the conversion of all preferred shares to common shares in May 2013.
  • Net cash provided by operating activities increased to $64 million from $48 million in fiscal 2012.

Norman C. Chambers, Chairman, President and Chief Executive, commented, "We generated sequential and more importantly year-over-year improvement in our operating results in the fourth quarter.  Results across our end-markets and product categories are starting to show positive momentum. We delivered strong sequential and year-over-year gains in Components sales driven largely by legacy single skin products, for which demand had lagged until the fourth quarter.  Insulated metal panels continued to outpace all other products in commercial and industrial applications. That segment also benefitted from improved pricing and margins. Our Coatings group continued to perform well, delivering top-line growth and improved profitability both sequentially and compared to last year's fourth quarter due to strong demand for heavy gauge package shipments. The Buildings group posted increased sales, but its operating profitability was negatively affected by lower pricing earlier in the year and higher manufacturing costs.

"We see an opportunity to further distinguish the value of our products and services by strengthening the integration of our manufacturing platform across all three business segments and rapidly incorporating the benefits of lean manufacturing best practices and efficiencies across all our production facilities.  To drive this initiative, we have selected John Kuzdal, formerly president of our Coatings group, to be the President of NCI Manufacturing, and he will have responsibility for all of NCI's manufacturing operations and activities."

Fourth Quarter 2013 Results

For the fourth quarter, sales grew 10.7% to $400.2 million from $361.7 million in last year's fourth quarter, due to higher volumes in each of our operating segments, as well as the contribution from the extra week this fiscal quarter.  On a sequential basis, sales were up 26.2% from $317.2 million in the third quarter.

Gross profit increased 10.8% to $87.3 million from $78.8 million in the fourth quarter of 2012 while gross profit margin was flat at 21.8%. Our August price increases materialized quickly in the results for both the Coatings group and the Components group because of their shorter sales cycles compared to the Buildings group.  We expect to realize the benefit of the price increases in our Buildings group during the first half of fiscal year 2014 and beyond.  Approximately 90% of the Buildings group's shipments in the fourth quarter were from work that was booked prior to the August price increases.

Engineering, selling, general and administrative (ESG&A) expenses rose 12.0% to $70.8 million from $63.2 million in the fourth quarter of 2012. As a percentage of revenues, ESG&A increased approximately 20 basis points to 17.7% in the 2013 fourth quarter compared to 17.5% in the prior year's period and was down from 19.8% in the 2013 third quarter. The increase in costs over the prior year was comprised of $2.0 million for the extra week in 2013, $1.3 million higher non-cash stock compensation charges, $3.4 million related to unique expenditures to improve our distribution channels, manufacturing capabilities and customer responsiveness, and the remainder related to variable costs on the increased activity levels.

Operating income increased to $16.5 million and included a $1.0 million insurance recovery and $0.5 million for unreimbursed business interruption costs associated with the fire at our Jackson, Mississippi coating plant that occurred in the fourth quarter. Excluding those items, adjusted operating income was $15.9 million, slightly higher than the prior year's results.

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 was $30.1 million, up slightly from $29.5 million in the prior year's fourth quarter and 77% higher than the $17.0 million of Adjusted EBITDA in this year's third quarter. Please see the reconciliation of Adjusted EBITDA to net income (loss) in the Company's financial statements.

For the fourth quarter of 2013, the Company reported net income of $8.3 million, or $0.11 per diluted common share. Excluding the gain associated with the insurance recovery and the unreimbursed business interruption costs, NCI generated adjusted net income of $8.0 million, or $0.10 per diluted common share. The weighted average number of common shares used in the calculation of fourth quarter 2013 earnings per diluted common share was 74.9 million. In last year's fourth quarter, the Company reported net income of $6.3 million, or $0.08 per diluted common share. Under the two class method in place before the May 2013 conversion of preferred shares to common, the weighted average number of common shares used in the calculation of fourth quarter 2012 net income per diluted common share was 19.5 million.  

Inventory levels increased 15% over the same period of the prior year to $122.1 million due to anticipated higher volume levels associated with the rising backlog. Annualized inventory turnover was 9.2 turns for the fourth quarter compared to 10.1 turns in last year's fourth quarter and 7.5 turns in the third quarter of fiscal 2013.

Capital expenditures were $24.4 million for fiscal year 2013. The majority of our expenditures were targeted at upgrading facilities and systems. The projects included refurbishing the Middletown, Ohio coating facility, consolidating chemical processes within insulated metal panels, enhancing the Coatings group's manufacturing capabilities and launching system improvements in the Buildings group. During fiscal 2013, NCI generated $64.1 million in net cash provided by operating activities due to operating earnings and effective working capital management.  

Fourth Quarter 2013 Segment Performance

The Coatings group third party sales grew 31.8% year-over-year and 25.2% sequentially. Operating income increased to $8.2 million in the fourth quarter of 2013 from $7.0 million in the fourth quarter of last fiscal year and $5.5 million in the 2013 third quarter. This group continued to generate strong external sales gains in HVAC, lighting fixtures and appliance sales, along with increased shipments of heavy gauge packages to construction markets. The Jackson, Mississippi plant was back online in September after a fire at the facility on August 6. During the six weeks the facility was offline while we repaired the damaged ovens, we utilized capacity at our other coatings plants to ensure that customers did not experience delays in their scheduled deliveries.  However, as a result of these efforts, our freight and manufacturing costs were slightly higher than expected and unreimbursed costs related to the business interruption were approximately $0.5 million.  The $1.0 million insurance recovery was spent on reconstructing the damaged ovens and we anticipate receiving additional insurance funds over the next several quarters.  The total received for the reconstructed ovens will be depreciated over ten years beginning in fiscal 2014.

The Components group produced a 13.8% increase in third-party sales versus the prior year's fourth quarter and a 25.1% increase sequentially. Operating income rose to $16.9 million from $10.2 million in the same quarter last fiscal year and $8.1 million in the third quarter of 2013. The year-over-year increase in operating income was due to higher volumes of legacy products and improving sales margins. Sales of higher margin insulated metal panels continued to gain momentum, growing 30% year-over year as they further penetrated the commercial and industrial segments.  

The Buildings group's total third party sales were up 5.5% compared to last year's fourth quarter and rose 27.3% sequentially. This group produced operating income of $9.0 million in the 2013 fourth quarter, declining from $14.2 million in the prior year's fourth quarter, but rebounding from $6.1 million in the prior quarter.  The profitability of the Buildings group was impacted by increased manufacturing costs and shipments of lower margin projects resulting from pricing pressure earlier in our fiscal year. We anticipate that the benefit of improved pricing from our August increase will be reflected in orders shipped in the first half of 2014.

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

Market Commentary

Leading indicators for nonresidential construction activity continue to trend positive. The American Institute of Architects' Architecture Billing Index (ABI) remained in growth mode in October at 51.6, but was down sequentially from 54.3 in September. The index has now been above 50 for 14 of the past 15 months, which is a very positive sign for U.S. construction spending going into 2014. In addition, the new projects inquiry index was up sharply in October to 61.5 from 58.6 in September.

Economic activity in the manufacturing sector expanded for the sixth consecutive month as the Institute for Supply Management (ISM) survey registered the highest level since April 2011 at 57.3, up from 56.4 in October. The ISM data, which leads GDP, has been in a range over the last two quarters consistent with 3-4% real GDP growth.  The ISM's New Orders Index registered 63.6 and represents growth in new orders for the sixth consecutive month. 

Summary/Outlook

"Our performance in fiscal 2013 was hampered by economic uncertainty, which resulted in lower than expected volumes and pricing pressure earlier in our fiscal year," noted Mr. Chambers. "Beginning in August, we experienced a pick-up in demand mainly coming from the commercial, industrial and agricultural sectors. The recent additions to our Buildings backlog in the period continue to reflect a number of larger projects and projects with higher margins. Operationally, the Components group delivered significant growth in commercial and industrial sector sales to NCI's largest OEM customers and in insulated metal panels. The Coatings group continues to benefit from higher volumes and improving product mix and margins. In addition, the Middletown, Ohio light gauge paint line has substantially increased production, and the facility, as previously anticipated, was profitable in the fourth fiscal quarter of 2013.

"We expect the market will support 800 million square feet of nonresidential construction starts in calendar 2013, a very modest improvement from the 772 million square feet realized in 2012. Business conditions at architectural firms have steadily improved in the past several quarters, suggesting the potential for upper single digit year-over-year growth in nonresidential new construction in 2014. Recent bookings trends and discussions with our customers appear to support this momentum. In addition, we currently anticipate improved margins in fiscal 2014 as we fully benefit from greater commercial discipline, manufacturing efficiencies and volume-driven operating leverage," Mr. Chambers concluded.

Conference Call Information

The NCI Building Systems, Inc. fourth quarter conference call is scheduled for Tuesday, December 10, 2013, at 5:00 PM ET. Please dial 1-480-629-9835 or 1-877-941-0844 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 4650930# when prompted. The taped replay will be available two hours after the call through December 17, 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 Year Ended 



 November 3, 


 October 28, 


 November 3, 


 October 28, 



2013


2012


2013


2012










 Sales 


$         400,211


$        361,688


$      1,308,395


$     1,154,010

 Cost of sales, excluding gain on insurance recovery 


313,934


282,879


1,033,374


897,992

 Gain on insurance recovery 


(1,023)


-


(1,023)


-

      Gross profit 


87,300


78,809


276,044


256,018



21.8%


21.8%


21.1%


22.2%










 Engineering, selling, general and administrative expenses 


70,842


63,230


256,856


219,340

 Acquisition-related costs 


-


153


-


4,989

      Income from operations 


16,458


15,426


19,188


31,689










 Interest income 


30


12


131


112

 Interest expense 


(3,364)


(6,238)


(20,988)


(16,827)

 Debt extinguishment costs, net 


-


-


(21,491)


(6,437)

 Other income, net 


562


449


1,421


460










 Income (loss) before income taxes 


13,686


9,649


(21,739)


8,997

 Provision (benefit) for income taxes 


5,410


3,379


(8,854)


4,084



39.5%


35.0%


40.7%


45.4%










 Net income (loss) 


$             8,276


$            6,270


$          (12,885)


$            4,913

 Convertible preferred stock dividends and accretion 


-


-


-


16,352

 Convertible preferred stock beneficial conversion feature 


-


-


-


11,878

 Convertible preferred stock amendment 


-


-


-


48,803

 Net income (loss) applicable to common shares 


$             8,276


$            6,270


$          (12,885)


$        (72,120)



















 Earnings (loss) per common share: 









    Basic 


$               0.11


$              0.08


$              (0.29)


$            (3.81)

    Diluted 


$               0.11


$              0.08


$              (0.29)


$            (3.81)










 Weighted average number of common shares outstanding: 









    Basic 


73,931


19,159


44,761


18,932

    Diluted 


74,924


19,481


44,761


18,932










 Increase in sales 


10.7%




13.4%












 Gross profit percentage 


21.8%


21.8%


21.1%


22.2%










 Engineering, selling, general and administrative expenses percentage 










17.7%


17.5%


19.6%


19.0%

 


 NCI BUILDING SYSTEMS, INC. 


 CONSOLIDATED BALANCE SHEETS 


 (In thousands) 












 November 3, 


 October 28, 





2013


2012





 (Unaudited) 



 ASSETS 







 Cash and cash equivalents 


$         77,436


$       55,158


 Restricted cash 


-


1,375


 Accounts receivable, net 


135,368


133,475


 Inventories, net 


122,105


106,015


 Deferred income taxes 


27,736


21,926


 Income tax receivable 


1,112


549


 Prepaid expenses and other 


19,300


16,864


 Investments in debt and equity securities, at market 


4,892


4,076


 Assets held for sale 


2,879


2,397



 Total current assets 


390,828


341,835









 Property, plant and equipment, net 


260,918


268,875


 Goodwill  



75,226


76,746


 Intangible assets, net 


48,975


53,028


 Deferred financing costs, net 


4,316


11,000



 Total assets 


$       780,263


$     751,484








 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) 






 Current portion of long-term debt 


$           2,384


$         2,500


 Note payable 


613


515


 Accounts payable 


144,553


113,177


 Accrued compensation and benefits 


40,954


41,586


 Accrued interest 


1,844


345


 Other accrued expenses 


61,266


61,935



 Total current liabilities 


251,614


220,058









 Long-term debt, net 


235,391


234,444


 Deferred income taxes 


32,185


35,565


 Other long-term liabilities 


8,315


11,995



 Total long-term liabilities 


275,891


282,004









 Series B cumulative convertible participating preferred stock 


-


619,950









 Common stock 


1,471


925


 Additional paid-in capital 


638,574


4,991


 Accumulated deficit 


(382,735)


(369,850)


 Accumulated other comprehensive loss 


(4,436)


(6,568)


 Treasury stock, at cost 


(116)


(26)



 Stockholders' equity (deficit) 


252,758


(370,528)










 Total liabilities and stockholders' equity (deficit) 


$       780,263


$     751,484

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)








 Fiscal Year Ended 



November 3, 2013


 October 28, 2012 






Cash flows from operating activities:





      Net income (loss)


$               (12,885)


$                   4,913

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





            Depreciation and amortization


36,009


29,602

            Amortization of deferred financing costs and debt discount


3,266


4,238

            Share-based compensation expense


14,900


9,298

            Non-cash debt extinguishment costs


17,582


6,437

            Gain on sale of property, plant and equipment


(3)


(556)

            Provision (benefit) for doubtful accounts


1,679


(109)

            Provision (benefit) from deferred income taxes


(10,589)


2,177

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





            Accounts receivable


(3,572)


(16,719)

            Inventories


(16,090)


(9,108)

            Income tax receivable


(724)


1,082

            Prepaid expenses and other


(1,720)


(2,075)

            Accounts payable


34,559


12,047

            Accrued expenses


2,121


6,506

            Other, net


(391)


(11)






Net cash provided by operating activities


64,142


47,722






Cash flows from investing activities:





      Acquisition, net of cash acquired


-


(140,991)

      Capital expenditures


(24,426)


(28,151)

      Proceeds from insurance


1,023


-

      Proceeds from sale of property, plant and equipment


74


2,992






Net cash used in investing activities


(23,329)


(166,150)






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


(10,975)


(131,950)

   Payments on note payable


(1,722)


(1,536)

   Proceeds from Amended ABL Facility


5,000


2

   Payments on Amended ABL Facility


(5,000)


-

   Payment of financing costs


(6,265)


(9,399)

   Excess tax benefits from share-based compensation arrangements


977


2

   Purchase of treasury stock


(2,462)


(1,529)






Net cash (used in) provided by financing activities


(18,398)


94,550

Effect of exchange rate changes on cash and cash equivalents


(137)


54

Net increase (decrease) in cash and cash equivalents


22,278


(23,824)






Cash and cash equivalents at beginning of period


55,158


78,982






Cash and cash equivalents at end of period


$                77,436


$                 55,158

 

NCI Building Systems, Inc.

Business Segments

(Unaudited)

(In thousands)

























Three Months Ended


Three Months Ended


$

%



November 3, 2013


October 28, 2012


Inc/(Dec)

Change




% of 



% of 







Total



Total




Sales:



Sales



Sales




     Metal coil coating


$      66,525

14


$      57,963

14


$     8,562

14.8%

     Metal components


201,019

43


180,267

42


20,752

11.5%

     Engineered building systems


201,737

43


190,195

44


11,542

6.1%

          Total sales


469,281

100


428,425

100


40,856

9.5%

     Less: Intersegment sales


69,070

15


66,737

16


2,333

3.5%

          Total net sales


$    400,211

85


$    361,688

84


$   38,523

10.7%



-



-








 % of 



 % of 




Operating income (loss):



Sales



Sales




     Metal coil coating


$        8,209

12


$        7,018

12


$     1,191

17.0%

     Metal components


16,904

8


10,216

6


6,688

65.5%

     Engineered building systems


9,045

4


14,182

7


(5,137)

-36.2%

     Corporate


(17,700)

-


(15,990)

-


(1,710)

-10.7%

          Total operating income (loss) (% of sales)


$      16,458

4


$      15,426

4


$     1,032

6.7%



-



-

















Fiscal Year Ended


Fiscal Year Ended


$

%



 November 3, 2013 


 October 28, 2012 


Inc/(Dec)

Change




% of 



% of 







Total



Total




Sales:



Sales



Sales




     Metal coil coating


$    222,064

14


$    210,227

15


$   11,837

5.6%

     Metal components


663,094

43


534,853

39


128,241

24.0%

     Engineered building systems


655,767

43


643,473

46


12,294

1.9%

          Total sales


1,540,925

100


1,388,553

100


152,372

11.0%

     Intersegment sales


232,530

15


234,543

17


(2,013)

-0.9%

          Total net sales


$ 1,308,395

85


$ 1,154,010

83


$ 154,385

13.4%



-



-



-





 % of 



 % of 




Operating income (loss):



Sales



Sales




     Metal coil coating


$      24,027

11


$      22,322

11


$     1,705

7.6%

     Metal components


36,167

5


34,147

6


2,020

5.9%

     Engineered building systems


23,405

4


37,596

6


(14,191)

-37.7%

     Corporate


(64,411)

-


(62,376)

-


(2,035)

-3.3%

          Total operating income (loss) (% of sales)


$      19,188

1


$      31,689

3


$ (12,501)

-39.4%

 

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 NOVEMBER 3, 2013 AND OCTOBER 28, 2012

(Unaudited)

(In thousands)


















 For the Three Months Ended November 3, 2013 





 Metal Coil

Coating 


 Metal

Components 


 Engineered

Building

Systems 


 Corporate 


 Consolidated 
















Operating income (loss), GAAP basis


$      8,209


$      16,904


$      9,045


$  (17,700)


$        16,458

-


Gain on insurance recovery


(1,023)


-


-


-


(1,023)



Unreimbursed business interruption costs


500


-


-


-


500



"Adjusted" operating income (loss) (1)


$      7,686


$      16,904


$      9,045


$  (17,700)


$        15,935


















 For the Three Months Ended October 28, 2012 





 Metal Coil

Coating 


 Metal

Components 


 Engineered

Building

Systems 


 Corporate 


 Consolidated 
















Operating income (loss), GAAP basis


$      7,018


$      10,216


$    14,182


$  (15,990)


$        15,426

-


Acquisition-related costs


-


-


-


153


153



"Adjusted" operating income (loss) (1)


$      7,018


$      10,216


$    14,182


$  (15,837)


$        15,579



















(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

FOR THE FISCAL YEAR ENDED NOVEMBER 3, 2013 AND OCTOBER 28, 2012

(Unaudited)

(In thousands)


















 For the Fiscal Year Ended November 3, 2013 





 Metal Coil

Coating 


 Metal

Components 


 Engineered

Building

Systems 


 Corporate 


 Consolidated 
















Operating income (loss), GAAP basis


$    24,027


$      36,167


$     23,405


$  (64,411)


$       19,188

-


Gain on insurance recovery


(1,023)


-


-


-


(1,023)



Unreimbursed business interruption costs


500


-


-


-


500



"Adjusted" operating income (loss) (1)


$    23,504


$      36,167


$     23,405


$  (64,411)


$       18,665


















 For the Fiscal Year Ended October 28, 2012 





 Metal Coil

Coating 


 Metal

Components 


 Engineered

Building

Systems 


 Corporate 


 Consolidated 
















Operating income (loss), GAAP basis


$    22,322


$      34,147


$     37,596


$  (62,376)


$       31,689

-


Acquisition-related costs


-


-


-


4,989


4,989



Actuarial determined general liability self-insurance charges (recovery)














-


(1,929)


-


-


(1,929)



Executive retirement


-


-


-


508


508



"Adjusted" operating income (loss) (1)


$    22,322


$      32,218


$     37,596


$  (56,879)


$       35,257
















(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)













-





1st Qtr


2nd Qtr


3rd Qtr


4th Qtr


Trailing 12 Months



 January 27, 


 April 28, 


 July 28, 


 November 3, 


 November 3, 



2013


2013


2013


2013


2013

Net income (loss)


$        (3,627)


$  (5,342)


$(12,192)


$           8,276


$                (12,885)

Add:











     Depreciation and amortization


9,122


8,809


9,066


9,012


36,009

     Consolidated interest expense, net


6,244


6,149


5,130


3,334


20,857

     Provision (benefit) for income taxes


(1,825)


(2,506)


(9,933)


5,410


(8,854)

     Debt extinguishment costs, net


-


-


21,491


-


21,491

     Gain on insurance recovery


-


-


-


(1,023)


(1,023)

     Unreimbursed business interruption costs

-


-


-


500


500

     Non-cash charges:











          Share-based compensation


3,442


3,445


3,448


4,565


14,900

          Embedded derivative


(5)


(4)


(50)


-


(59)












     Adjusted EBITDA (1)


$       13,351


$  10,551


$  16,960


$         30,074


$                  70,936




































1st Qtr


2nd Qtr


3rd Qtr


4th Qtr


Trailing 12 Months



 January 29, 


 April 29, 


 July 29, 


 October 28, 


 October 28, 



2012


2012


2012


2012


2012

Net income (loss)


$            589


$    1,321


$  (3,267)


$           6,270


$                    4,913

Add:











     Depreciation and amortization


6,158


5,841


7,248


10,355


29,602

     Consolidated interest expense, net


3,296


3,034


4,159


6,226


16,715

     Provision (benefit) for income taxes


426


942


(663)


3,379


4,084

     Acquisition-related costs


396


1,494


2,946


153


4,989

     Debt extinguishment costs, net


-


-


6,437


-


6,437

     Executive retirement


-


508


-


-


508

     Non-cash charges:











          Share-based compensation


1,972


2,119


2,090


3,117


9,298

          Asset impairments (recoveries)


-


-


(22)


13


(9)

          Embedded derivative


(5)


(6)


(5)


(6)


(22)












     Adjusted EBITDA (1)


$       12,832


$  15,253


$  18,923


$         29,507


$                  76,515












(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" NET INCOME (LOSS) PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON 

(Unaudited)













 Fiscal Three Months Ended 


 Fiscal Year Ended 




 November 3, 

 October 28, 


 November 3, 

 October 28, 




2013

2012


2013

2012

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

$               0.11

$              0.08


$              (0.29)

$            (3.81)

Convertible preferred stock beneficial conversion feature and amendment

-

-


-

3.20

Debt extinguishment costs, net of taxes


-

-


0.30

0.21

Gain on insurance recovery, net of unreimbursed business interruption costs and taxes

(0.01)

-


(0.01)

-

Acquisition-related costs, net of taxes


-

0.00


-

0.19

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

-

-


-

(0.06)

Executive retirement, net of taxes


-

-


-

0.02

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

$               0.10

$              0.08


$               0.00

$            (0.25)




















 Fiscal Three Months Ended 


Fiscal Year Ended




 November 3, 

 October 28, 


 November 3, 

 October 28, 




2013

2012


2013

2012

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

$             8,276

$            6,270


$          (12,885)

$        (72,120)

Convertible preferred stock beneficial conversion feature and amendment

-

-


-

60,681

Debt extinguishment costs, net of taxes


-

-


13,238

3,965

Gain on insurance recovery, net of unreimbursed business interruption costs and taxes

(322)

-


(322)

-

Acquisition-related costs, net of taxes


-

94


-

3,690

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

-

-


-

(1,188)

Executive retirement, net of taxes


-

-


-

313

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

$             7,954

$            6,364


$                  31

$          (4,659)

















(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)






























%




 4th Qtr 2013 



 4th Qtr 2012 


 Inc/(Dec) 

 Change 

 Metal Coil Coating 










 Total Sales 


66,525

14%


57,963

14%

8,562

14.8%


 Less: Intersegment sales 


37,691



36,082


1,609

4.5%


 Third Party Sales 


28,834

7%


21,881

6%

6,953

31.8%












 Operating Income (Loss) 


8,209

28%


7,018

32%

1,191

17.0%




-







 Metal Components 










 Total Sales 


201,019

43%


180,267

42%

20,752

11.5%


 Less: Intersegment sales 


25,397



25,981


(584)

-2.2%


 Third Party Sales 


175,622

44%


154,286

43%

21,336

13.8%












 Operating Income (Loss) 


16,904

10%


10,216

7%

6,688

65.5%




-







 Engineered Building Systems 









 Total Sales 


201,737

43%


190,195

44%

11,542

6.1%


 Less: Intersegment sales 


5,982



4,674


1,308

28.0%


 Third Party Sales 


195,755

49%


185,521

51%

10,234

5.5%












 Operating Income (Loss) 


9,045

5%


14,182

8%

(5,137)

-36.2%




-







 Consolidated 










 Total Sales 


469,281

100%


428,425

100%

40,856

9.5%


 Intersegment 


69,070



66,737


2,333

3.5%


 Third Party Sales 


400,211

100%


361,688

100%

38,523

10.7%












 Operating Income (Loss) 


16,458

4%


15,426

4%

1,032

6.7%




-




















 YTD 



 YTD 



%




 4th Qtr 2013 



 4th Qtr 2012 


 Inc/(Dec) 

Change

 Metal Coil Coating 










 Total Sales 


222,064

14%


210,227

15%

11,837

5.6%


 Less: Intersegment sales 


129,094



129,121


(27)

0.0%


 Third Party Sales 


92,970

7%


81,106

7%

11,864

14.6%












 Operating Income (Loss) 


24,027

26%


22,322

28%

1,705

7.6%




-







 Metal Components 










 Total Sales 


663,094

43%


534,853

39%

128,241

24.0%


 Less: Intersegment sales 


81,322



88,133


(6,811)

-7.7%


 Third Party Sales 


581,772

44%


446,720

39%

135,052

30.2%












 Operating Income (Loss) 


36,167

6%


34,147

8%

2,020

5.9%




-







 Engineered Building Systems 









 Total Sales 


655,767

43%


643,473

46%

12,294

1.9%


 Less: Intersegment sales 


22,114



17,289


4,825

27.9%


 Third Party Sales 


633,653

49%


626,184

54%

7,469

1.2%












 Operating Income (Loss) 


23,405

4%


37,596

6%

(14,191)

-37.7%




-







 Consolidated 










 Total Sales 


1,540,925

100%


1,388,553

100%

152,372

11.0%


 Less: Intersegment sales 


232,530



234,543


(2,013)

-0.9%


 Third Party Sales 


1,308,395

100%


1,154,010

100%

154,385

13.4%












 Operating Income (Loss) 


19,188

1%


31,689

3%

(12,501)

-39.4%

 

SOURCE NCI Building Systems, Inc.

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