Building Systems Reports Second Quarter 2018 Results

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June 5, 2018 4:15 PM UTC

HOUSTON, June 5, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for its second fiscal quarter ended April 29, 2018.

Second Quarter 2018 Financial and Operational Highlights:  

  • Sales rose 8.7% to $457.1 million for the quarter, compared to $420.5 million in the prior year's second quarter
  • Gross profit was $104.1 million or 22.8% of sales, compared to $100.8 million or 24.0% of sales in the second quarter of 2017
  • The Company improved and replaced its debt structure, reducing its current effective cash interest rate from approximately 7.0% to 3.6% and extending the term to 2025
  • Net income was a loss of $5.7 million for the quarter, compared to net income of $17.0 million in the prior year's second quarter. Adjusted Net Income was $16.4 million this quarter, compared to $11.5 million in the prior year's second quarter
  • Net income per diluted common share for the quarter was a loss of $0.09, compared to income of $0.24 in the second quarter of fiscal 2017. There were several previously announced special items, which while positive for future operations including the debt refinancing and the sale of CENTRIA's China operations, resulted in charges during the quarter. Adjusted Net Income was $0.25 per diluted common share, an increase of 56.3%, compared to $0.16 in the prior year's second quarter

 

Fiscal Three Months Ended

April 29, 2018

April 30, 2017

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

$ (0.09)

$0.24

   Loss on extinguishment of debt

0.33

0.00

   Loss on disposition of a business

0.10

0.00

   Gain on insurance recovery

0.00

(0.13)

   Other items and related tax effect of adjustments

(0.09)

0.05

Adjusted net income per diluted common share

$0.25

$0.16

 

  • Adjusted EBITDA was $39.7 million, or 8.7% of revenues, for the quarter, compared to $37.0 million, or 8.8% of revenues, in the prior year's second quarter
  • Total consolidated backlog increased to $631.6 million at quarter end, up 10.8% year-over-year

"We are pleased with the strong second quarter performance of all our business segments, as we successfully maintained our commercial discipline in a rising cost environment," said Donald R. Riley, President and Chief Executive Officer. "NCI's solid backlog and bookings continue to support our favorable outlook for 2018, and our key economic indicators continue to track to our expectations for year-over-year growth.

"We are making good progress executing on our advanced manufacturing and continuous improvement initiatives. We believe the successful execution of these initiatives and the visibility provided by our backlog will position NCI well for the remainder of this fiscal year. Additionally during the quarter, we executed on two key priorities for the Company in improving our capital structure and completing the sale of our CENTRIA China business. These actions have simplified our operations, reduced risk and strengthened our balance sheet."

Second Quarter 2018 Results

Second quarter of fiscal 2018 sales increased to $457.1 million, up 8.7%, from $420.5 million in last year's second fiscal quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across our segments, combined with volume growth in both the Metal Components and Insulated Metal Panel segments and growth in package volumes in the Metal Coil Coating segment.  

Gross profit increased 3.2% to $104.1 million this quarter, compared to $100.8 million in the second quarter of fiscal 2017 and was up sequentially from $91.9 million in the first quarter of fiscal 2018. Gross profit margins were 22.8% for the second quarter of fiscal 2018, compared to 24.0% in the second quarter of fiscal 2017 and was up sequentially 100 basis points from 21.8% in the first quarter of fiscal 2018. Gross margins in the second quarter were lower than the second quarter of the prior year primarily as a result of less favorable product mix in the IMP segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up additional shifts in preparation for higher volumes expected in the second half of fiscal 2018.  

Engineering, selling, general and administrative ("ESG&A") expenses were $74.4 million for the quarter, compared to $75.1 million in the prior year's second fiscal quarter. As a percentage of revenues, ESG&A expenses were 16.3% in the fiscal 2018 second quarter compared to 17.9% in the prior year's second fiscal quarter. The year-over-year decline in ESG&A expenses reflected the Company's ongoing cost reduction initiatives, partially offset by the impact of wage and information technology cost increases.

Operating income for the quarter was $19.0 million, including a previously disclosed $6.7 million charge related to the sale of CENTRIA's manufacturing facility in China, compared to $32.5 million in the second quarter 2017. Adjusted Operating Income, a non-GAAP financial measure which excludes certain special items, increased 15.3% to $27.3 million in the current quarter, compared to $23.6 million in the same period last year.

Net loss applicable to common shares in the quarter was $5.7 million, or $0.09 per diluted common share, compared to net income of $16.9 million, or $0.24 per diluted common share in the prior year's second quarter. Income was impacted by the following special items: a $21.9 million charge related to the extinguishment and refinancing of a portion of the Company's debt; a $6.7 million charge on the disposition of CENTRIA's China operations; a $1.1 million charge for strategic development and acquisition related costs and $0.5 million of restructuring and impairment charges, partially offset by the associated tax effect of these items. The second quarter of fiscal 2017 included a $9.6 million special gain on an insurance recovery, partially offset by the related tax effects. Excluding the impact of these special items, second quarter 2018 Adjusted Net Income, a non-GAAP measure, was $16.4 million, or $0.25 per diluted common share, compared to $11.5 million, or $0.16 per diluted common share, in the prior year's second quarter.

Adjusted EBITDA, a non-GAAP measure, defined in accordance with the Company's credit agreement as earnings before interest, taxes, depreciation and amortization, and certain other cash and non-cash items, was $39.7 million this quarter, compared to $37.0 million in the prior year's second quarter. Please see the reconciliation of Adjusted Operating Income, Adjusted Net Income and Adjusted EBITDA in the accompanying financial tables.

Cash and cash equivalents at the end of the second quarter were $35.3 million, compared to $49.7 million at the end of the second quarter of fiscal 2017. Cash and cash equivalents increased sequentially $22.9 million from $12.4 million at the end of the first quarter of fiscal 2018 due to operating earnings and improved utilization of accounts payable. NCI's net debt leverage ratio (net debt/EBITDA) at the end of the second quarter was 2.2x. As of April 29, 2018, the Company's $150.0 million asset based lending (ABL) facility remained undrawn.

Second Quarter 2018 Segment Performance

Sales in the Engineered Building Systems segment were $167.2 million in the second quarter of fiscal 2018, compared to $162.6 million in the prior year period, primarily as a result of commercial discipline passing through higher input costs, partially offset by lower tonnage volumes. Operating income increased 34.5% to $9.3 million this quarter, compared to $6.9 million in the prior year's second quarter. Adjusted Operating Income, a non-GAAP measure, increased 32.3% to $9.6 million this quarter, compared to $7.2 million in the second quarter 2017. Operating margins increased as a result of reduced ESG&A costs and an emphasis on order profitability over volumes.

The Metal Components segment generated $168.5 million in sales during the quarter, an increase of 8.8% from $154.9 million in the prior year's second quarter, led by higher external volumes across the segment and the disciplined pass-through of increasing input costs, despite a less favorable mix in the overhead doors product lines. Operating income was $22.1 million in the second fiscal quarter of 2018 compared to $20.0 million in the same period last year. Adjusted Operating Income was $22.2 million in the quarter, compared to $19.7 million in the prior year's second quarter. The Metal Components segment's operating margins increased as a result of improved operating leverage on higher volumes.

The Insulated Metal Panels segment generated $113.4 million in sales during the quarter, an increase of 10.2% from $102.9 million in the prior year's second quarter, as a result of commercial discipline emphasizing project profitability over volume in a period of increasing input costs. Operating income was $1.5 million for the quarter compared to $19.4 million in the second quarter of 2017. The second quarter of fiscal 2018 had a $6.7 million special charge for the disposition of the CENTRIA's China business and the second quarter of fiscal 2017 had a special gain of $9.2 million for an insurance recovery.  Adjusted Operating Income was $8.4 million, compared to $10.4 million in the same period last year. The IMP segment's operating margins decreased from the prior year as a result of the special items noted above and a change in product mix. The reduction in year-over-year margins was expected due to the unusually large amount of higher margin architectural panels shipped in the prior year quarter.

Sales in the Metal Coil Coating segment were $95.2 million during the second quarter of fiscal 2018, an increase of 9.8% from $86.7 million in the prior year's second quarter, as a result of higher volumes in package sales and the pass-through of rising material costs. Operating income and Adjusted Operating Income were both $7.1 million in the second quarter of fiscal 2018 compared to $6.2 million in the second quarter of fiscal 2017, respectively. Operating margins in the Metal Coil Coating segment improved as a result of lower ESG&A costs, partially offset by lower manufacturing efficiency due to ramping-up additional shifts to support increasing activity levels.

Market Commentary

The key leading indicators that NCI follows and that typically have the most meaningful correlation to nonresidential low-rise construction starts are the American Institute of Architects' ("AIA") Architecture Mixed Use Index, the Dodge Residential single family starts and the Conference Board Leading Economic Index ("LEI"). Historically, there has been a very high correlation to the volume of nonresidential low-rise construction starts when the three leading indicators are combined and then seasonally adjusted. Based on the combined forward projection of these metrics, and assuming a 9- to 14-month historical lag for each metric, the Company continues to expect new nonresidential low-rise construction starts in the Company's addressable market for its legacy businesses to grow 2.0% to 4.0% in fiscal 2018.

Guidance

Looking ahead, NCI's key economic indicators are tracking to expectation and year-over-year growth in both bookings and backlog support the Company's favorable outlook for fiscal 2018. For the third quarter of fiscal 2018, NCI expects revenues to be in the range of $525 to $545 million and Adjusted EBITDA to be in the range of $56 to $66 million.

The Company has provided additional detailed financial guidance in the quarterly supplemental presentation that can be found at www.ncibuildingsystems.com under the "Investors" section.

Conference Call Information

The NCI Building Systems, Inc. second quarter fiscal 2018 conference call is scheduled for Wednesday, June 6, 2018, at 9:00 a.m. ET (8:00 a.m. CT). Please dial 1-412-902-0003 or 1-877-407-0672 (toll-free) to participate in the call. To listen to a live broadcast of the call over the Internet or to review the archived call, please visit the Company's website at www.ncibuildingsystems.com. To access the taped telephone replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13680060# when prompted. The taped replay will be available two hours after the call through June 20, 2018. A replay of the webcast will be available on the Company's website under the Event Calendar, Calls & Webcast section of the Investor Relations page of the NCI website for approximately 90 days.

About NCI Building Systems

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

Contact:

K. Darcey MatthewsVice President, Investor Relations281-897-7785

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," "anticipate," "guidance," "plan," "potential," "expect," "should," "will," "forecast" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and expectations for new nonresidential low-rise construction starts in fiscal 2018 and our financial outlook and guidance, including our third quarter fiscal 2018 forecasted revenues and Adjusted EBITDA and other consolidated financial performance guidance. Among the factors that could cause actual results to differ materially include, but are not limited to, industry cyclicality and seasonality; adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; volatility in the U.S. economy and abroad, generally, and in the credit markets; our substantial indebtedness and our ability to incur substantially more indebtedness; our ability to generate the significant cash flow required to service our existing debt, including our secured term loan facility, and obtain future financing; our ability to comply with the financial tests and covenants in our existing and future debt obligations; operational limitations or restrictions in connection with our debt; increases in interest rates; recognition of asset impairment charges; commodity price increases and/or limited availability of raw materials, including steel; interruptions in our supply chain; our ability to make strategic acquisitions accretive to earnings; retention and replacement of management and other key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; costs related to environmental clean-ups and liabilities; competitive activity and pricing pressure; increases in energy prices; volatility of the Company's stock price; effect on the price of the Company's common stock of future sales of the Company's common stock held by our sponsor; substantial governance and other rights held by our sponsor; breaches of our information system security measures and damage to our major information management systems; hazards that may cause personal injury or property damage, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance; changes in laws or regulations, including the Dodd-Frank Act; the timing and amount of our stock repurchases; and costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters. See also the "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 2017, and other risks described in documents subsequently filed by the Company from time to time with the SEC, 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. The Company 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 

 (In thousands, except per share data) 

(Unaudited)

 Fiscal Three Months Ended 

Fiscal Six Months Ended

 April 29, 

 April 30, 

 April 29, 

 April 30, 

2018

2017

2018

2017

 Sales 

$ 457,069

$ 420,464

$ 878,418

$ 812,167

 Cost of sales 

352,986

319,625

682,418

627,377

      Gross profit 

104,083

100,839

196,000

184,790

22.8%

24.0%

22.3%

22.8%

 Engineering, selling, general and administrative expenses 

74,406

75,124

149,192

144,164

 Intangible asset amortization 

2,413

2,405

4,825

4,810

 Restructuring and impairment charges 

488

315

1,582

2,578

 Strategic development and acquisition related costs 

1,134

124

1,861

481

 Loss on disposition of business 

6,686

-

6,686

-

 Gain on insurance recovery 

-

(9,601)

-

(9,601)

      Income from operations 

18,956

32,472

31,854

42,358

 Interest income 

37

138

70

144

 Interest expense 

(4,849)

(7,479)

(12,341)

(14,365)

 Foreign exchange (loss) gain 

(305)

127

166

50

 Loss on extinguishment of debt 

(21,875)

-

(21,875)

-

 Other income, net 

270

322

727

708

      Income (loss) before income taxes 

(7,766)

25,580

(1,399)

28,895

 (Benefit) provision for income taxes 

(2,082)

8,606

(964)

9,882

26.8%

33.6%

68.9%

34.2%

 Net income (loss) 

(5,684)

16,974

(435)

19,013

 Net income allocated to participating securities 

-

(115)

-

(131)

 Net income (loss) applicable to common shares 

$    (5,684)

$   16,859

$       (435)

$   18,882

 Check 

 Income (loss) per common share: 

    Basic 

$      (0.09)

$       0.24

$      (0.01)

$       0.27

    Diluted 

$      (0.09)

$       0.24

$      (0.01)

$       0.27

 Weighted average number of common shares outstanding: 

    Basic 

66,210

70,988

66,311

70,933

    Diluted 

66,210

71,122

66,311

71,107

 Increase in sales 

8.7%

13.0%

8.2%

9.4%

 Engineering, selling, general and administrative expenses percentage 

 

16.3%

 

17.9%

 

17.0%

 

17.8%

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 April 29, 

October 29,

2018

2017

 ASSETS 

     Current assets: 

 Cash and cash equivalents 

$      35,335

$      65,658

 Restricted cash 

177

136

 Accounts receivable, net 

180,393

199,897

 Inventories, net 

221,369

198,296

 Income taxes receivable 

6,439

3,617

 Investments in debt and equity securities, at market 

6,332

6,481

 Prepaid expenses and other 

36,551

31,359

 Assets held for sale 

10,102

5,582

 Total current assets 

496,698

511,026

 Property, plant and equipment, net 

221,398

226,995

 Goodwill  

148,291

148,291

 Intangible assets, net 

132,338

137,148

 Deferred income taxes 

2,513

2,544

 Other assets, net 

5,369

5,108

 Total assets 

$ 1,006,607

$ 1,031,112

 LIABILITIES AND STOCKHOLDERS' EQUITY 

     Current liabilities: 

 Note payable 

$        1,656

$           440

 Accounts payable 

157,819

147,772

 Accrued compensation and benefits 

49,850

59,189

 Accrued interest 

1,464

6,414

 Other accrued expenses 

104,475

102,233

 Total current liabilities 

315,264

316,048

 Long-term debt, net of deferred financing costs of $6,043 and $6,857 

408,957

387,290

 Deferred income taxes 

1,928

4,297

 Other long-term liabilities 

18,134

18,230

 Total long-term liabilities 

429,019

409,817

 Common stock 

663

687

 Additional paid-in capital 

521,190

562,277

 Accumulated deficit 

(249,832)

(248,046)

 Accumulated other comprehensive loss, net 

(7,555)

(7,531)

 Treasury stock, at cost 

(2,142)

(2,140)

 Total stockholders' equity  

262,324

305,247

 Total liabilities and stockholders' equity  

$ 1,006,607

$ 1,031,112

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Fiscal Six Months Ended

 April 29, 

 April 30, 

2018

2017

Cash flows from operating activities:

      Net income (loss)

$       (435)

$   19,013

      Adjustments to reconcile net income (loss) to net cash from operating activities

            Depreciation and amortization

20,800

20,378

            Amortization of deferred financing costs

781

954

            Loss on extinguishment of debt

21,875

-

            Share-based compensation expense

7,868

5,862

            Gain on insurance recovery

-

(9,601)

            Loss on disposition of business

6,192

-

            (Gains) losses on assets, net

(250)

262

            Provision for doubtful accounts

(44)

1,406

            Benefit for deferred income taxes

(1,676)

(113)

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

            Accounts receivable

17,060

12,232

            Inventories

(24,920)

(8,617)

            Income taxes

(2,822)

982

            Prepaid expenses and other

(4,182)

(1,875)

            Accounts payable

12,686

(21,737)

            Accrued expenses

(12,016)

(11,068)

            Other, net

(931)

(189)

Net cash provided by operating activities

39,986

7,889

Cash flows from investing activities:

    Capital expenditures

(16,897)

(11,556)

    Proceeds from sale of property, plant and equipment

2,678

2,533

    Business disposition, net

(4,415)

-

    Proceeds from insurance

-

420

Net cash used in investing activities

(18,634)

(8,603)

Cash flows from financing activities:

  (Deposit) refund of restricted cash

(41)

240

  Proceeds from stock options exercised

1,040

1,196

  Proceeds from ABL facility 

65,000

35,000

  Payments on ABL facility

(65,000)

(35,000)

  Proceeds from term loan

415,000

-

  Payments on term loan

(144,147)

(10,000)

  Payments on senior notes

(265,470)

-

  Payments on note payable

(441)

(458)

  Payments of financing costs

(6,275)

-

  Payments related to tax withholding for share-based compensation

(4,612)

(2,389)

  Purchases of treasury stock

(46,705)

(3,533)

Net cash used in financing activities

(51,651)

(14,944)

Effect of exchange rate changes on cash and cash equivalents

(24)

(63)

Net decrease in cash and cash equivalents

(30,323)

(15,721)

Cash and cash equivalents at beginning of period

65,658

65,403

Cash and cash equivalents at end of period

$   35,335

$   49,682

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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

(In thousands, except per share data)

(Unaudited)

 Fiscal Three Months Ended 

 Fiscal Six Months Ended 

 April 29, 

 April 30, 

 April 29, 

 April 30, 

2018

2017

2018

2017

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

$      (0.09)

$       0.24

$      (0.01)

$       0.27

  Loss on extinguishment of debt

0.33

0.00

0.33

-

  Loss on disposition of business

0.10

0.00

0.10

-

  Restructuring and impairment charges

0.01

0.00

0.02

0.04

  Strategic development and acquisition related costs

0.02

0.00

0.03

0.01

  Acceleration of CEO retirement benefits

-

-

0.07

-

  Gain on insurance recovery

-

(0.13)

-

(0.14)

  Tax effect of applicable non-GAAP adjustments (1)

(0.12)

0.05

(0.15)

0.03

Adjusted net income per diluted common share (2)

$       0.25

$       0.16

$       0.39

$       0.21

 Fiscal Three Months Ended 

Fiscal Six Months Ended

 April 29, 

 April 30, 

 April 29, 

 April 30, 

2018

2017

2018

2017

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

$    (5,684)

$   16,859

$       (435)

$   18,882

  Loss on extinguishment of debt

21,875

-

21,875

-

  Loss on disposition of business

6,686

-

6,686

-

  Restructuring and impairment charges

488

315

1,582

2,578

  Strategic development and acquisition related costs

1,134

124

1,861

481

  Acceleration of CEO retirement benefits

-

-

4,600

-

  Gain on insurance recovery

-

(9,601)

-

(9,601)

  Other, net

-

328

(323)

328

  Tax effect of applicable non-GAAP adjustments (1)

(8,059)

3,445

(9,883)

2,423

Adjusted net income applicable to common shares (2)

$   16,440

$   11,470

$   25,963

$   15,091

 (1)  The Company calculated the tax effect of non-GAAP adjustments by applying the applicable statutory tax rate for the period to each applicable non-GAAP item. 

 (2)  The Company discloses a tabular comparison of Adjusted net income per diluted common share and Adjusted net income 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 per diluted common share and Adjusted net income applicable to common shares should not be considered in isolation or as a substitute for net income per diluted common share and net income applicable to common shares as reported on the face of our consolidated statements of operations.

 

NCI BUILDING SYSTEMS, INC.

Business Segments

(In thousands)

(Unaudited)

 Fiscal Three Months Ended 

Fiscal Six Months Ended

 April 29, 

 April 30, 

 April 29, 

 April 30, 

2018

2017

2018

2017

% ofTotalSales

% ofTotalSales

%Change

% of TotalSales

% ofTotalSales

%Change

Total Sales

Engineered Building Systems

$  167,240

31

$  162,624

32

2.8%

$   324,204

31

$  313,887

32

3.3%

Metal Components

168,456

31

154,895

31

8.8%

315,288

30

289,068

30

9.1%

Insulated Metal Panels

113,413

21

102,937

20

10.2%

224,207

21

198,132

20

13.2%

Metal Coil Coating

95,190

17

86,729

17

9.8%

183,533

18

175,069

18

4.8%

Total sales

544,299

100

507,185

100

7.3%

1,047,232

100

976,156

100

7.3%

Less: Intersegment sales

(87,230)

16

(86,721)

17

0.6%

(168,814)

16

(163,989)

17

2.9%

Total net sales

$  457,069

84

$  420,464

83

8.7%

$   878,418

84

$  812,167

83

8.2%

External Sales

% ofSales

% ofSales

% ofSales

% ofSales

Engineered Building Systems

$  157,136

34

$  154,456

37

1.7%

$   305,424

35

$  299,477

37

2.0%

Metal Components

147,661

32

133,290

31

10.8%

275,189

31

248,847

30

10.6%

Insulated Metal Panels

99,792

22

86,773

21

15.0%

197,305

23

169,214

21

16.6%

Metal Coil Coating

52,480

12

45,945

11

14.2%

100,500

11

94,629

12

6.2%

Total external sales

$  457,069

100

$  420,464

100

8.7%

$   878,418

100

$  812,167

100

8.2%

Operating Income

% ofSales

% ofSales

% ofSales

% ofSales

Engineered Building Systems

$      9,271

6

$      6,894

4

34.5%

$     17,534

5

$    13,397

4

30.9%

Metal Components

22,082

13

19,997

13

10.4%

39,171

12

32,373

11

21.0%

Insulated Metal Panels

1,540

1

19,377

19

-92.1%

8,611

4

21,569

11

-60.1%

Metal Coil Coating

7,129

7

6,227

7

14.5%

12,505

7

12,933

7

-3.3%

Corporate

(21,066)

-

(20,023)

-

5.2%

(45,967)

-

(37,914)

-

21.2%

Total operating income

$    18,956

4

$    32,472

8

-41.6%

$     31,854

4

$    42,358

5

-24.8%

Adjusted Operating Income (1)

% ofSales

% ofSales

% ofSales

% ofSales

Engineered Building Systems

$      9,551

6

$      7,217

4

32.3%

$     19,123

6

$    15,630

5

22.3%

Metal Components

22,202

13

19,706

13

12.7%

37,888

12

32,387

11

17.0%

Insulated Metal Panels

8,375

7

10,387

10

-19.4%

17,030

8

12,579

6

35.4%

Metal Coil Coating

7,129

7

6,227

7

14.5%

12,505

7

12,933

7

-3.3%

Corporate

(19,993)

-

(19,899)

-

0.5%

(39,963)

-

(37,384)

-

6.9%

Total adjusted operating income

$    27,264

6

$    23,638

6

15.3%

$     46,583

5

$    36,145

4

28.9%

Adjusted EBITDA (2)

% ofSales

% ofSales

% ofSales

% ofSales

Engineered Building Systems

$    11,786

7

$      9,377

6

25.7%

$     24,168

7

$    20,025

6

20.7%

Metal Components

23,713

14

21,060

14

12.6%

41,028

13

35,103

12

16.9%

Insulated Metal Panels

12,933

11

14,985

15

-13.7%

25,703

11

21,604

11

19.0%

Metal Coil Coating

9,214

10

8,236

9

11.9%

16,648

9

17,079

10

-2.5%

Corporate

(17,976)

-

(16,689)

-

7.7%

(35,002)

-

(30,669)

-

14.1%

Total adjusted EBITDA

$    39,670

9

$    36,969

9

7.3%

$     72,545

8

$    63,142

8

14.9%

 (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 statements of operations. 

 (2) The Company's Term Loan Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain special charges. As such, the historical information is presented in accordance with the definition above. The Company's Asset-Based Lending facility has substantially the same definition of Adjusted EBITDA. 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

(In thousands)

(Unaudited)

Consolidated

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Total Net Sales

$ 469,385

$      488,726

$       421,349

$ 457,069

$        878,418

$      1,836,529

Operating Income, GAAP

34,097

33,325

12,898

18,956

31,854

99,276

 Restructuring and impairment 

1,009

1,709

1,094

488

1,582

4,300

 Strategic development and acquisition related costs 

1,297

193

727

1,134

1,861

3,351

 Loss on disposition of business 

-

-

-

6,686

6,686

6,686

 Acceleration of CEO retirement benefits 

-

-

4,600

-

4,600

4,600

 Gain on insurance recovery 

(148)

-

-

-

-

(148)

 Unreimbursed business interruption costs 

235

28

-

-

-

263

 Goodwill impairment 

-

6,000

-

-

-

6,000

Adjusted Operating Income

36,490

41,255

19,319

27,264

46,583

124,328

 Other income and expense 

1,322

(62)

928

(34)

894

2,154

 Depreciation and amortization 

10,278

10,664

10,358

10,442

20,800

41,742

 Share-based compensation expense 

2,284

2,084

2,270

1,998

4,268

8,636

Adjusted EBITDA

$   50,374

$        53,941

$         32,875

$   39,670

$          72,545

$         176,860

Year over year growth, Total Net Sales

1.5 %

1.8 %

7.6 %

8.7 %

8.2 %

4.7 %

Operating Income Margin

7.3 %

6.8 %

3.1 %

4.1 %

3.6 %

5.4 %

Adjusted Operating Income Margin

7.8 %

8.4 %

4.6 %

6.0 %

5.3 %

6.8 %

Adjusted EBITDA Margin

10.7 %

11.0 %

7.8 %

8.7 %

8.3 %

9.6 %

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Total Net Sales

$ 462,353

$      480,314

$       391,703

$ 420,464

$        812,167

$      1,754,834

Operating Income, GAAP

43,535

39,391

9,886

32,472

42,358

125,284

 Restructuring and impairment 

778

815

2,264

315

2,579

4,172

 Strategic development and acquisition related costs 

819

590

357

124

481

1,890

 (Gain) loss on sale of assets and asset recovery 

(52)

62

-

137

137

147

 Gain on insurance recovery 

-

-

-

(9,601)

(9,601)

(9,601)

 Unreimbursed business interruption costs 

-

-

-

191

191

191

Adjusted Operating Income

45,080

40,858

12,507

23,638

36,145

122,083

 Other income and expense 

(508)

(192)

309

449

758

58

 Depreciation and amortization 

10,595

9,815

10,315

10,062

20,377

40,787

 Share-based compensation expense 

2,661

3,181

3,042

2,820

5,862

11,704

Adjusted EBITDA

$   57,828

$        53,662

$         26,173

$   36,969

$          63,142

$         174,632

Operating Income Margin

9.4 %

8.2 %

2.5 %

7.7 %

5.2 %

7.1 %

Adjusted Operating Income Margin

9.8 %

8.5 %

3.2 %

5.6 %

4.5 %

7.0 %

Adjusted EBITDA Margin

12.5 %

11.2 %

6.7 %

8.8 %

7.8 %

10.0 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Engineered Building Systems

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Total Sales

$ 191,910

$      188,183

$       156,964

$ 167,240

$        324,204

$         704,297

External Sales

182,164

178,222

148,288

157,136

305,424

665,810

Operating Income, GAAP

14,948

13,043

8,263

9,271

17,534

45,525

 Restructuring and impairment 

941

695

1,136

280

1,416

3,052

 Strategic development and acquisition related costs 

-

-

173

-

173

173

Adjusted Operating Income

15,889

13,738

9,572

9,551

19,123

48,750

 Other income and expense 

1,291

(694)

733

(88)

645

1,242

 Depreciation and amortization 

2,255

2,198

2,077

2,323

4,400

8,853

Adjusted EBITDA

$   19,435

$        15,242

$         12,382

$   11,786

$          24,168

$           58,845

Year over year growth, Total sales

6.0 %

(7.8)%

3.8 %

2.8 %

3.3 %

0.7 %

Year over year growth, External Sales

3.8 %

(9.3)%

2.3 %

1.7 %

2.0 %

(0.9)%

Operating Income Margin

7.8 %

6.9 %

5.3 %

5.5 %

5.4 %

6.5 %

Adjusted Operating Income Margin

8.3 %

7.3 %

6.1 %

5.7 %

5.9 %

6.9 %

Adjusted EBITDA Margin

10.1 %

8.1 %

7.9 %

7.0 %

7.5 %

8.4 %

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Total Sales

$ 181,029

$      204,208

$       151,263

$ 162,624

313,887

$         699,124

External Sales

175,471

196,596

145,021

154,456

299,477

671,544

Operating Income, GAAP

19,561

22,830

6,503

6,894

13,397

55,788

 Restructuring and impairment 

106

211

1,910

186

2,096

2,413

 (Gain) loss on sale of assets and asset recovery 

(52)

62

-

137

137

147

Adjusted Operating Income

19,615

23,103

8,413

7,217

15,630

58,348

 Other income and expense 

(931)

(362)

(41)

(125)

(166)

(1,459)

 Depreciation and amortization 

2,438

2,399

2,276

2,285

4,561

9,398

Adjusted EBITDA

$   21,122

$        25,140

$         10,648

$     9,377

$          20,025

$           66,287

Operating Income Margin

10.8 %

11.2 %

4.3 %

4.2 %

4.3 %

8.0 %

Adjusted Operating Income Margin

10.8 %

11.3 %

5.6 %

4.4 %

5.0 %

8.3 %

Adjusted EBITDA Margin

11.7 %

12.3 %

7.0 %

5.8 %

6.4 %

9.5 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Metal Components

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Total Sales

$ 166,305

$      181,288

$       146,832

$ 168,456

$        315,288

$         662,881

External Sales

140,639

155,183

127,528

147,661

275,189

571,011

Operating Income, GAAP

23,276

23,119

17,089

22,082

39,171

85,566

 Restructuring and impairment 

60

69

(1,403)

120

(1,283)

(1,154)

 Gain on insurance recovery 

(148)

-

-

-

-

(148)

Adjusted Operating Income

23,188

23,188

15,686

22,202

37,888

84,264

 Other income and expense 

55

84

53

67

120

259

 Depreciation and amortization 

1,266

1,422

1,576

1,444

3,020

5,708

Adjusted EBITDA

$   24,509

$        24,694

$         17,315

$   23,713

$          41,028

$           90,231

Year over year growth, Total sales

(0.1)%

8.9 %

9.4 %

8.8 %

9.1 %

6.6 %

Year over year growth, External Sales

0.1 %

10.9 %

10.4 %

10.8 %

10.6 %

7.9 %

Operating Income Margin

14.0 %

12.8 %

11.6 %

13.1 %

12.4 %

12.9 %

Adjusted Operating Income Margin

13.9 %

12.8 %

10.7 %

13.2 %

12.0 %

12.7 %

Adjusted EBITDA Margin

14.7 %

13.6 %

11.8 %

14.1 %

13.0 %

13.6 %

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Total Sales

$ 166,512

$      166,532

$       134,173

$ 154,895

$        289,068

$         622,112

External Sales

140,560

139,968

115,557

133,290

248,847

529,375

Operating Income, GAAP

26,803

21,254

12,376

19,997

32,373

80,430

 Restructuring and impairment 

202

103

305

129

434

739

 Gain on insurance recovery 

-

-

-

(420)

(420)

(420)

Adjusted Operating Income

27,005

21,357

12,681

19,706

32,387

80,749

 Other income and expense 

92

(27)

28

52

80

145

 Depreciation and amortization 

1,365

1,406

1,334

1,302

2,636

5,407

Adjusted EBITDA

$   28,462

$        22,736

$         14,043

$   21,060

$          35,103

$           86,301

Operating Income Margin

16.1 %

12.8 %

9.2 %

12.9 %

11.2 %

12.9 %

Adjusted Operating Income Margin

16.2 %

12.8 %

9.5 %

12.7 %

11.2 %

13.0 %

Adjusted EBITDA Margin

17.1 %

13.7 %

10.5 %

13.6 %

12.1 %

13.9 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Insulated Metal Panels

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Total Sales

$ 119,730

$      123,542

$       110,794

$ 113,413

$        224,207

$         467,479

External Sales

98,026

105,064

97,513

99,792

197,305

400,395

Operating Income, GAAP

11,468

14,895

7,071

1,540

8,611

34,974

 Restructuring and impairment 

8

683

1,284

88

1,372

2,063

 Strategic development and acquisition related costs 

-

90

300

61

361

451

 Loss on disposition of business 

-

-

-

6,686

6,686

6,686

 Unreimbursed business interruption costs 

235

28

-

-

-

263

Adjusted Operating Income

11,711

15,696

8,655

8,375

17,030

44,437

 Other income and expense 

(211)

356

(273)

223

(50)

95

 Depreciation and amortization 

4,516

4,742

4,388

4,335

8,723

17,981

Adjusted EBITDA

$   16,016

$        20,794

$         12,770

$   12,933

$          25,703

$           62,513

Year over year growth, Total sales

13.3 %

12.3 %

16.4 %

10.2 %

13.2 %

13.0 %

Year over year growth, External Sales

4.2 %

13.4 %

18.3 %

15.0 %

16.6 %

12.5 %

Operating Income Margin

9.6 %

12.1 %

6.4 %

1.4 %

3.8 %

7.5 %

Adjusted Operating Income Margin

9.8 %

12.7 %

7.8 %

7.4 %

7.6 %

9.5 %

Adjusted EBITDA Margin

13.4 %

16.8 %

11.5 %

11.4 %

11.5 %

13.4 %

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Total Sales

$ 105,694

$      110,001

$         95,195

$ 102,937

$        198,132

$         413,827

External Sales

94,059

92,648

82,441

86,773

169,214

355,921

Operating Income, GAAP

8,911

7,513

2,192

19,377

21,569

37,993

 Restructuring and impairment 

59

404

-

-

-

463

 Strategic development and acquisition related costs 

9

-

-

-

-

9

 Gain on insurance recovery 

-

-

-

(9,181)

(9,181)

(9,181)

 Unreimbursed business interruption costs 

-

-

-

191

191

191

Adjusted Operating Income

8,979

7,917

2,192

10,387

12,579

29,475

 Other income and expense 

32

270

35

340

375

677

 Depreciation and amortization 

4,357

3,926

4,392

4,258

8,650

16,933

Adjusted EBITDA

$   13,368

$        12,113

$           6,619

$   14,985

$          21,604

$           47,085

Operating Income Margin

8.4 %

6.8 %

2.3 %

18.8 %

10.9 %

9.2 %

Adjusted Operating Income Margin

8.5 %

7.2 %

2.3 %

10.1 %

6.3 %

7.1 %

Adjusted EBITDA Margin

12.6 %

11.0 %

7.0 %

14.6 %

10.9 %

11.4 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Metal Coil Coating

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Total Sales

$  95,261

$        98,550

$         88,343

$   95,190

$        183,533

$         377,344

External Sales

48,556

50,257

48,020

52,480

100,500

199,313

Operating Income, GAAP

7,107

1,419

5,376

7,129

12,505

21,031

 Goodwill impairment 

-

6,000

-

-

-

6,000

Adjusted Operating Income

7,107

7,419

5,376

7,129

12,505

27,031

 Depreciation and amortization 

2,063

2,065

2,058

2,085

4,143

8,271

Adjusted EBITDA

$    9,170

$          9,484

$           7,434

$     9,214

$          16,648

$           35,302

Year over year growth, Total sales

(1.5)%

2.7 %

0.0%

9.8 %

4.8 %

2.6 %

Year over year growth, External Sales

(7.1)%

(1.7)%

(1.4)%

14.2 %

6.2 %

0.7 %

Operating Income Margin

7.5 %

1.4 %

6.1 %

7.5 %

6.8 %

5.6 %

Adjusted Operating Income Margin

7.5 %

7.5 %

6.1 %

7.5 %

6.8 %

7.2 %

Adjusted EBITDA Margin

9.6 %

9.6 %

8.4 %

9.7 %

9.1 %

9.4 %

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Total Sales

$  96,684

$        95,987

$         88,340

$   86,729

$        175,069

$         367,740

External Sales

52,263

51,102

48,684

45,945

94,629

197,994

Operating Income, GAAP

10,531

9,310

6,706

6,227

12,933

32,774

Adjusted Operating Income

10,531

9,310

6,706

6,227

12,933

32,774

 Other income and expense 

2

-

31

-

31

33

 Depreciation and amortization 

2,214

1,849

2,106

2,009

4,115

8,178

Adjusted EBITDA

$  12,747

$        11,159

$           8,843

$     8,236

$          17,079

$           40,985

Operating Income Margin

10.9 %

9.7 %

7.6 %

7.2 %

7.4 %

8.9 %

Adjusted Operating Income Margin

10.9 %

9.7 %

7.6 %

7.2 %

7.4 %

8.9 %

Adjusted EBITDA Margin

13.2 %

11.6 %

10.0 %

9.5 %

9.8 %

11.1 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Corporate

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 30, 

 October 29, 

 January 28, 

 April 29, 

 April 29, 

 April 29, 

2017

2017

2018

2018

2018

2018

Operating Loss, GAAP

$  (22,702)

$       (19,151)

$       (24,901)

$  (21,066)

$        (45,967)

$          (87,820)

 Restructuring and impairment 

-

262

77

-

77

339

 Strategic development and acquisition related costs 

1,297

103

254

1,073

1,327

2,727

 Acceleration of CEO retirement benefits 

-

-

4,600

-

4,600

4,600

Adjusted Operating Loss

(21,405)

(18,786)

(19,970)

(19,993)

(39,963)

(80,154)

 Other income and expense 

187

192

415

(236)

179

558

 Depreciation and amortization 

178

237

259

255

514

929

 Share-based compensation expense 

2,284

2,084

2,270

1,998

4,268

8,636

Adjusted EBITDA

$  (18,756)

$       (16,273)

$       (17,026)

$  (17,976)

$        (35,002)

$          (70,031)

Fiscal Six 

Trailing

 Fiscal Three Months Ended 

Months Ended

Twelve Months

 July 31, 

 October 30, 

 January 29, 

 April 30, 

 April 30, 

 April 30, 

2016

2016

2017

2017

2017

2017

Operating Loss, GAAP

$  (22,271)

$       (21,516)

$       (17,891)

$  (20,023)

$        (37,914)

$          (81,701)

 Restructuring and impairment 

411

97

49

-

49

557

 Strategic development and acquisition related costs 

810

590

357

124

481

1,881

Adjusted Operating Loss

(21,050)

(20,829)

(17,485)

(19,899)

(37,384)

(79,263)

 Other income and expense 

297

(73)

256

182

438

662

 Depreciation and amortization 

221

235

207

208

415

871

 Share-based compensation expense 

2,661

3,181

3,042

2,820

5,862

11,704

Adjusted EBITDA

$  (17,871)

$       (17,486)

$       (13,980)

$  (16,689)

$        (30,669)

$          (66,026)

 

Cision View original content:http://www.prnewswire.com/news-releases/building-systems-reports-second-quarter-2018-results-300660352.html

SOURCE NCI Building Systems, Inc.


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