NCI Building Systems Reports First Quarter 2018 Results

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March 6, 2018 4:15 PM UTC

HOUSTON, March 6, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for the first fiscal quarter ended January 28, 2018.

First Quarter 2018 Financial and Operational Highlights:

  • Sales rose 7.6% to $421.3 million for the quarter, compared to $391.7 million in the prior year's first quarter
  • Gross profit for the quarter was $91.9 million or 21.8% of revenues, compared to $84.0 million or 21.4% of revenues in the prior year's first quarter
  • Net income was $5.2 million for the quarter, compared to $2.0 million in the prior year's first quarter. Adjusted Net Income was $9.5 million this quarter, compared to $3.6 million in the prior year's first quarter
  • Net income per diluted common share for the quarter was $0.08, compared to $0.03 in the prior year's first quarter. Adjusted Net Income was $0.14 per diluted common share, compared to $0.05 in the prior year's first quarter
  • Adjusted EBITDA was $32.9 million, or 7.8% of revenues, for the quarter, compared to Adjusted EBITDA of $26.2 million, or 6.7% of revenues, in the prior year's first quarter
  • Total consolidated backlog increased to $569.9 million, up 8.1% year-over-year

"We are pleased with our first quarter results across our businesses, led by the strong performance from our Insulated Metal Panels segment," said Donald R. Riley, President and Chief Executive Officer. "These results demonstrate our commitment to maintaining commercial discipline in an environment of increasing costs.

Looking ahead, our internal economic indicators are tracking to expectations and our year-over-year growth in both backlog and bookings continues to support our favorable outlook. The NCI team is focused on and is making good progress on successfully executing our advanced manufacturing and continuous improvement initiatives. The successful execution of these initiatives and our backlog should position NCI well for the future."

First Quarter 2018 Results

First quarter 2018 sales increased to $421.3 million, up 7.6%, from $391.7 million in last year's first quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across our segments, combined with strong volume growth in both the Metal Components and Insulated Metal Panels (IMP) segments.  

Gross profit was $91.9 million this quarter, compared to $84.0 million in the first quarter of fiscal 2017 and gross profit margins were 21.8% for the year's first quarter compared to 21.4% in the first quarter of fiscal 2017. Gross margins in the first quarter of the year increased primarily as a result of growth in the IMP segment and favorable commercial discipline, partially offset by higher transportation costs.

Engineering, selling, general and administrative ("ESG&A") expenses were $74.8 million for the quarter, compared to $69.0 million in the prior year's first quarter. As a percentage of revenues, ESG&A expenses were 17.7% in the fiscal 2018 first quarter compared to 17.6% in the prior year's first quarter. The first quarter of fiscal 2018 included a special charge of $4.6 million related to the acceleration of retirement benefits of the Company's former Chief Executive Officer. Excluding the effects of the acceleration of share-based compensation, ESG&A, as a percentage of revenues, improved to 16.7% in the first quarter of 2018.

Operating income for the quarter was $13.9 million, compared to $9.9 million in the prior year's first quarter. Adjusted Operating Income, a non-GAAP measure which excludes certain identified items, was $19.3 million in the current quarter, compared to $12.5 million in the prior year's first quarter.

Net income applicable to common shares in the quarter was $5.2 million, or $0.08 per diluted common share, compared to $2.0 million, or $0.03 per diluted common share in the prior year's first quarter. Net income was impacted by the following special items: a $4.6 million charge related to the acceleration of retirement benefits of the former CEO, $1.1 million charge for restructuring activities predominately attributable to severance costs and $0.7 million strategic development and acquisition related costs, partially offset by a discrete $1.4 million benefit from the December enactment of the Tax Cuts and Jobs Act and $1.5 million from the associated tax effect of these items. Excluding the impact of these special items, Adjusted Net Income, a non-GAAP measure, was $9.5 million, or $0.14 per diluted common share, compared to $3.6 million, or $0.05 per diluted common share, in the prior year's first 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 $32.9 million this quarter, compared to $26.2 million in the prior year's first 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 first quarter were $12.4 million, compared to $15.8 million at the end of the first quarter of fiscal 2017. Cash and cash equivalents decreased sequentially $53.3 million from $65.7 million at the end of the fourth quarter of fiscal 2017 primarily as a result of $46.7 million of share repurchases during the first quarter. NCI's net debt leverage ratio (net debt/EBITDA) at the end of the first quarter was 2.3x. As of January 28, 2018, the Company had utilized $10.0 million of the Company's $150.0 million ABL facility.

As of the first quarter of fiscal 2018, the Company changed its reportable business segments to the following:

Prior Reporting Segments

New Reporting Segments

Engineered Building Systems

Engineered Building Systems

Metal Components

Metal Components

Metal Coil Coating

Insulated Metal Panels

Metal Coil Coating

Two years of historical financial results for previously reported quarterly and annual periods for fiscal 2016 and 2017 have been recast to reflect the four new business segments. An 8-K with this historical information was filed on February 28, 2018.

First Quarter 2018 Segment Performance

Sales in the Engineered Building Systems segment were $157.0 million in the first quarter, compared to $151.3 million in the prior year period, as a result of commercial discipline passing through higher input costs, offset by lower tonnage volumes. Operating income increased to $8.3 million this quarter, compared to $6.5 million in the prior year's first quarter. Adjusted Operating Income, a non-GAAP measure, increased to $9.6 million this quarter, compared to $8.4 million in the prior year's first quarter. Operating margins increased as a result of lower ESG&A costs and improved commercial discipline, partially offset by lower plant utilization and higher transportation costs.

The Metal Components segment generated $146.8 million in sales during the quarter, an increase of 9.4% from $134.2 million in the prior year's first quarter, led by higher external volumes across the segment and the pass-through of increasing materials costs. Operating income was $17.1 million for the quarter compared to $12.4 million in the prior year's first quarter. Adjusted Operating Income was $15.7 million, compared to $12.7 million in the prior year's first quarter. The Metal Components segment's operating margins increased as a result of improved operating leverage across the cost structure on higher volumes, partially offset by higher transportations costs.

The Insulated Metal Panels segment generated $110.8 million in sales during the quarter, an increase of 16.4% from $95.2 million in the prior year's first quarter, as a result of commercial discipline on rising input costs and increasing sales volumes. Operating income was $7.1 million for the quarter compared to $2.2 million in the prior year's first quarter. Adjusted Operating Income was $8.7 million, compared to $2.2 million in the prior year's first quarter. The IMP segment's operating margins increased as a result of improved operating leverage across the cost structure on higher volumes and committed commercial discipline on rising input costs.

Sales in the Metal Coil Coating segment were $88.3 million in the first quarter of both fiscal 2018 and fiscal 2017. Operating income and Adjusted Operating Income was $5.4 million for the quarter compared to $6.7 million in the prior year's first quarter, respectively. Operating margins in the Metal Coil Coating segment were impacted by less favorable product mix and lower margins in the CENTRIA coil coating operations as that entity was further integrated and aligned with the legacy coil coating operations.

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 nonresidential low-rise construction starts when the three leading indicators are combined and then seasonally adjusted. The combined forward projection of these metrics, based on a 9- to 14-month historical lag for each metric, indicates an expected positive growth of 2.0% to 4.0% for new nonresidential low-rise construction starts for the Company's addressable market in fiscal 2018.

Recent Developments

In February 2018, NCI entered into a new $415 million secured term loan facility and used the proceeds to redeem and retire the Company's existing 8.25% senior notes due 2023 and refinance its existing $144 million senior secured term loan and to pay related call premiums, fees and expenses, including accrued and unpaid interest in respect of the existing term loan facility and the senior notes. The Company also announced the closing of the refinancing of its existing ABL facility with a new $150.0 million facility. As a result of these refinancing transactions, the Company expects to reduce its current effective cash interest rate from approximately 7.0% to 3.6%, which represents a reduction in annual interest expense of approximately $12.5 million based on current LIBOR rates. The company expects to record a loss, primarily related to the early extinguishment of the 8.25% senior notes ranging from $23.0 - $25.0 million during the quarter ending April 29, 2018.

On January 29, 2018, the Company closed on the sale of CENTRIA International LLC, which included the CENTRIA manufacturing facility in China. These operations were not considered material to the growth opportunities of the Company and had generated $9.9 million in revenues and an operating income of $1.2 million in fiscal 2017. The Company estimates that it will record a loss on the transaction ranging between $6.0 million and $7.5 million during the quarter ending April 29, 2018, of which approximately $3.5 to $4.0 million is considered a non-cash expense.

As the result of recently enacted Tax Cuts and Jobs Act, the company's effective income tax rate during the first quarter of fiscal 2018 decreased to 17.6% from 38.5% in the prior year's first quarter. The first quarter included a $1.4 million discrete benefit related to the remeasurement of tax assets and liabilities net of expected repatriation taxes on foreign operations.

Guidance

Looking ahead, NCI's internal 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 second quarter of fiscal 2018, NCI expects revenues to be in the range of $430 to $450 million and Adjusted EBITDA to be in the range of $29 to $39 million.

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

Conference Call Information

The NCI Building Systems, Inc. first quarter fiscal 2018 conference call is scheduled for Wednesday, March 7, 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 13676349# when prompted. The taped replay will be available two hours after the call through March 21, 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 second 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; substantial indebtedness and our ability to incur substantially more indebtedness; our ability to generate 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 

 January 28, 

 January 29, 

2018

2017

 Sales 

$      421,349

$      391,703

 Cost of sales 

329,432

307,752

      Gross profit 

91,917

83,951

21.8%

21.4%

 Engineering, selling, general and administrative expenses 

74,786

69,039

 Intangible asset amortization 

2,412

2,405

 Strategic development and acquisition related costs 

727

357

 Restructuring and impairment charges 

1,094

2,264

      Income from operations 

12,898

9,886

 Interest income 

33

5

 Interest expense 

(7,492)

(6,886)

 Foreign exchange gain (loss) 

471

(78)

 Other income, net 

457

387

      Income before income taxes 

6,367

3,314

 Provision for income taxes 

1,118

1,275

17.6%

38.5%

 Net income  

5,249

2,039

 Net income allocated to participating securities 

(38)

(8)

 Net income applicable to common shares 

$          5,211

$          2,031

 Income per common share: 

    Basic 

$            0.08

$            0.03

    Diluted 

$            0.08

$            0.03

 Weighted average number of common shares outstanding: 

    Basic 

66,434

70,875

    Diluted 

66,546

71,088

 Increase in sales 

7.6%

5.9%

 Engineering, selling, general and administrative expenses percentage 

17.7%

17.6%

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 

 January 28, 

October 29,

2018

2017

 ASSETS 

     Current assets: 

     Cash and cash equivalents 

$        12,420

$      65,658

     Restricted cash 

180

136

     Accounts receivable, net 

169,059

199,897

     Inventories, net 

200,533

198,296

     Income taxes receivable 

1,244

3,617

     Investments in debt and equity securities, at market 

6,802

6,481

     Prepaid expenses and other 

33,761

31,359

     Assets held for sale 

10,601

5,582

     Total current assets 

434,600

511,026

     Property, plant and equipment, net 

220,465

226,995

     Goodwill  

148,291

148,291

     Intangible assets, net 

134,743

137,148

     Deferred income taxes 

2,679

2,544

     Other assets, net 

5,216

5,108

     Total assets 

$      945,994

$ 1,031,112

 LIABILITIES AND STOCKHOLDERS' EQUITY 

     Current liabilities: 

     Current portion of long-term debt 

$        10,000

$             -

     Note payable 

-

440

     Accounts payable 

116,567

147,772

     Accrued compensation and benefits 

47,611

59,189

     Accrued interest 

1,383

6,414

     Other accrued expenses 

95,742

102,233

     Total current liabilities 

271,303

316,048

     Long-term debt, net of deferred financing costs of $6,522 and $6,857 

387,625

387,290

     Deferred income taxes 

2,620

4,297

     Other long-term liabilities 

18,141

18,230

     Total long-term liabilities 

408,386

409,817

     Common stock 

663

687

     Additional paid-in capital 

519,224

562,277

     Accumulated deficit 

(244,148)

(248,046)

     Accumulated other comprehensive loss, net 

(7,294)

(7,531)

     Treasury stock, at cost 

(2,140)

(2,140)

     Total stockholders' equity  

266,305

305,247

     Total liabilities and stockholders' equity  

$      945,994

$ 1,031,112

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 Fiscal Three Months Ended 

 January 28, 

 January 29, 

2018

2017

Cash flows from operating activities:

      Net income 

$          5,249

$          2,039

      Adjustments to reconcile net income to net cash from operating activities

            Depreciation and amortization

10,358

10,315

            Amortization of deferred financing costs

435

477

            Share-based compensation expense

5,870

3,042

            (Gains) losses on assets, net

(320)

125

            Provision for doubtful accounts

(20)

1,586

            Provision for deferred income taxes

(1,676)

26

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

            Accounts receivable

30,858

19,181

            Inventories

(2,237)

(4,932)

            Income taxes

2,373

(6,777)

            Prepaid expenses and other

(2,567)

2,157

            Accounts payable

(31,205)

(30,199)

            Accrued expenses

(23,183)

(27,240)

            Other, net

(515)

(163)

Net cash used in operating activities

(6,580)

(30,363)

Cash flows from investing activities:

      Capital expenditures

(8,109)

(4,120)

      Proceeds from sale of property, plant and equipment

2,249

-

Net cash used in investing activities

(5,860)

(4,120)

Cash flows from financing activities:

      (Deposit) refund of restricted cash

(44)

117

      Proceeds from stock options exercised

1,040

1,019

      Proceeds from Amended ABL facility 

43,000

30,000

      Payments on Amended ABL facility

(33,000)

(30,000)

      Payments on term loan

-

(10,000)

      Payments on note payable

(441)

(431)

      Payments of financing costs

(275)

-

      Payments related to tax withholding for share-based compensation

(4,610)

(2,389)

      Purchases of treasury stock

(46,705)

(3,533)

Net cash used in financing activities

(41,035)

(15,217)

Effect of exchange rate changes on cash and cash equivalents

237

86

Net decrease in cash and cash equivalents

(53,238)

(49,614)

Cash and cash equivalents at beginning of period

65,658

65,403

Cash and cash equivalents at end of period

$        12,420

$        15,789

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND NET INCOME COMPARISON 

(In thousands, except per share data)

(Unaudited)

 Fiscal Three Months Ended 

 January 28, 

 January 29, 

2018

2017

Net income per diluted common share, GAAP basis

$            0.08

$            0.03

  Restructuring and impairment charges

0.02

0.03

  Strategic development and acquisition related costs

0.01

0.00

  Acceleration of CEO retirement benefits

0.07

-

  Discrete tax effects of U.S. Tax Reform

(0.01)

-

  Tax effect of applicable non-GAAP adjustments (1)

(0.03)

(0.01)

Adjusted net income per diluted common share (2)

$            0.14

$            0.05

 Fiscal Three Months Ended 

 January 28, 

 January 29, 

2018

2017

Net income applicable to common shares, GAAP basis

$          5,211

$          2,031

  Restructuring and impairment charges

1,094

2,264

  Strategic development and acquisition related costs

727

357

  Acceleration of CEO retirement benefits

4,600

-

  Discrete tax effects of U.S. tax reform

(323)

-

  Tax effect of applicable non-GAAP adjustments (1)

(1,775)

(1,022)

Adjusted net income applicable to common shares (2)

$          9,534

$          3,630

 (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)

Trailing

Trailing

 Fiscal Three Months Ended 

Twelve Months

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2016

2016

2016

2017

2017

2017

2017

2017

2018

2018

Total Sales:

Engineered Building Systems

$ 138,023

$ 181,029

$      204,208

$      151,263

$         674,523

$ 162,624

$ 191,910

$      188,183

$      156,964

$         699,681

Metal Components

130,293

166,512

166,532

134,173

597,510

154,895

166,305

181,288

146,832

649,320

Insulated Metal Panels

89,433

105,694

110,001

95,195

400,323

102,937

119,730

123,542

110,794

457,003

Metal Coil Coating

79,829

96,684

95,987

88,340

360,840

86,729

95,261

98,550

88,343

368,883

  Total sales

437,578

549,919

576,728

468,971

2,033,196

507,185

573,206

591,563

502,933

2,174,887

Less: Intersegment sales

(65,331)

(87,566)

(96,414)

(77,268)

(326,579)

(86,721)

(103,821)

(102,837)

(81,584)

(374,963)

  Total net sales

$ 372,247

$ 462,353

$      480,314

$      391,703

$      1,706,617

$ 420,464

$ 469,385

$      488,726

$      421,349

$      1,799,924

External Sales

Engineered Building Systems

$ 134,454

$ 175,471

$      196,596

$      145,021

$         651,542

$ 154,456

$ 182,164

$      178,222

$      148,288

$         663,130

Metal Components

111,748

140,560

139,968

115,557

507,833

133,290

140,639

155,183

127,528

556,640

Insulated Metal Panels

79,882

94,059

92,648

82,441

349,030

86,773

98,026

105,064

97,513

387,376

Metal Coil Coating

46,163

52,263

51,102

48,684

198,212

45,945

48,556

50,257

48,020

192,778

  Total external sales

$ 372,247

$ 462,353

$      480,314

$      391,703

$      1,706,617

$ 420,464

$ 469,385

$      488,726

$      421,349

$      1,799,924

Operating Income

Engineered Building Systems

$     7,193

$   19,561

$        22,830

$          6,503

$           56,087

$     6,894

$   14,948

$        13,043

$          8,263

$           43,148

Metal Components

13,071

26,803

21,254

12,376

73,504

19,997

23,276

23,119

17,089

83,481

Insulated Metal Panels

2,782

8,911

7,513

2,192

21,398

19,377

11,468

14,895

7,071

52,811

Metal Coil Coating

6,686

10,531

9,310

6,706

33,233

6,227

7,107

1,419

5,376

20,129

Corporate

(19,138)

(22,271)

(21,516)

(17,891)

(80,816)

(20,023)

(22,702)

(19,151)

(24,901)

(86,777)

  Total operating income

$   10,594

$   43,535

$        39,391

$          9,886

$         103,406

$   32,472

$   34,097

$        33,325

$        12,898

$         112,792

Adjusted Operating Income (1)

Engineered Building Systems

$     6,415

$   19,615

$        23,103

$          8,413

$           57,546

$     7,217

$   15,889

$        13,738

$          9,572

$           46,416

Metal Components

13,503

27,005

21,357

12,681

74,546

19,706

23,188

23,188

15,686

81,768

Insulated Metal Panels

2,986

8,979

7,917

2,192

22,074

10,387

11,711

15,696

8,655

46,449

Metal Coil Coating

6,725

10,531

9,310

6,706

33,272

6,227

7,107

7,419

5,376

26,129

Corporate

(18,234)

(21,050)

(20,829)

(17,485)

(77,598)

(19,899)

(21,405)

(18,786)

(19,970)

(80,060)

  Total adjusted operating income

$   11,395

$   45,080

$        40,858

$        12,507

$         109,840

$   23,638

$   36,490

$        41,255

$        19,319

$         120,702

 (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. 

 

NCI BUILDING SYSTEMS, INC.

Business Segments (Continued)

(In thousands)

(Unaudited)

Trailing

Trailing

 Fiscal Three Months Ended 

Twelve Months

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2016

2016

2016

2017

2017

2017

2017

2017

2018

2018

Adjusted EBITDA (2)

Engineered Building Systems

$   9,789

$ 21,122

$        25,140

$        10,648

$           66,699

$     9,377

$ 19,435

$        15,242

$        12,382

$           56,436

Metal Components

14,820

28,462

22,736

14,043

80,061

21,060

24,509

24,694

17,315

87,578

Insulated Metal Panels

7,126

13,368

12,113

6,619

39,226

14,985

16,016

20,794

12,770

64,565

Metal Coil Coating

8,891

12,747

11,159

8,843

41,640

8,236

9,170

9,484

7,434

34,324

Corporate

(15,171)

(17,871)

(17,486)

(13,980)

(64,508)

(16,689)

(18,756)

(16,273)

(17,026)

(68,744)

  Total adjusted EBITDA

$ 25,455

$ 57,828

$        53,662

$        26,173

$         163,118

$   36,969

$ 50,374

$        53,941

$        32,875

$         174,159

Operating Income Margin

Engineered Building Systems

5.2 %

10.8 %

11.2 %

4.3 %

8.3 %

4.2 %

7.8 %

6.9 %

5.3 %

6.2 %

Metal Components

10.0 %

16.1 %

12.8 %

9.2 %

12.3 %

12.9 %

14.0 %

12.8 %

11.6 %

12.9 %

Insulated Metal Panels

3.1 %

8.4 %

6.8 %

2.3 %

5.3 %

18.8 %

9.6 %

12.1 %

6.4 %

11.6 %

Metal Coil Coating

8.4 %

10.9 %

9.7 %

7.6 %

9.2 %

7.2 %

7.5 %

1.4 %

6.1 %

5.5 %

  Consolidated

2.8 %

9.4 %

8.2 %

2.5 %

6.1 %

7.7 %

7.3 %

6.8 %

3.1 %

6.3 %

Adjusted Operating Income Margin

Engineered Building Systems

4.6 %

10.8 %

11.3 %

5.6 %

8.5 %

4.4 %

8.3 %

7.3 %

6.1 %

6.6 %

Metal Components

10.4 %

16.2 %

12.8 %

9.5 %

12.5 %

12.7 %

13.9 %

12.8 %

10.7 %

12.6 %

Insulated Metal Panels

3.3 %

8.5 %

7.2 %

2.3 %

5.5 %

10.1 %

9.8 %

12.7 %

7.8 %

10.2 %

Metal Coil Coating

8.4 %

10.9 %

9.7 %

7.6 %

9.2 %

7.2 %

7.5 %

7.5 %

6.1 %

7.1 %

  Consolidated

3.1 %

9.8 %

8.5 %

3.2 %

6.4 %

5.6 %

7.8 %

8.4 %

4.6 %

6.7 %

Adjusted EBITDA Margin

Engineered Building Systems

7.1 %

11.7 %

12.3 %

7.0 %

9.9 %

5.8 %

10.1 %

8.1 %

7.9 %

8.1 %

Metal Components

11.4 %

17.1 %

13.7 %

10.5 %

13.4 %

13.6 %

14.7 %

13.6 %

11.8 %

13.5 %

Insulated Metal Panels

8.0 %

12.6 %

11.0 %

7.0 %

9.8 %

14.6 %

13.4 %

16.8 %

11.5 %

14.1 %

Metal Coil Coating

11.1 %

13.2 %

11.6 %

10.0 %

11.5 %

9.5 %

9.6 %

9.6 %

8.4 %

9.3 %

  Consolidated

6.8 %

12.5 %

11.2 %

6.7 %

9.6 %

8.8 %

10.7 %

11.0 %

7.8 %

9.7 %

 (2) 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 special charges. As such, the historical information is presented in accordance with the definition above. Concurrent with the amendment and restatement of the Term Loan facility, the Company entered into an Asset-Based Lending facility which has substantially the same definition of Adjusted EBITDA except that the ABL facility caps certain special 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

(In thousands)

(Unaudited)

Consolidated

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Total Net Sales

$ 420,464

$ 469,385

$      488,726

$      421,349

$      1,799,924

Operating Income, GAAP

32,472

34,097

33,325

12,898

112,792

 Restructuring and impairment 

315

1,009

1,709

1,094

4,127

 Strategic development and acquisition related costs 

124

1,297

193

727

2,341

 Acceleration of CEO retirement benefits 

-

-

-

4,600

4,600

 Loss on sale of assets and asset recovery 

137

-

-

-

137

 Gain on insurance recovery 

(9,601)

(148)

-

-

(9,749)

 Unreimbursed business interruption costs 

191

235

28

-

454

 Goodwill impairment 

-

-

6,000

-

6,000

Adjusted Operating Income

23,638

36,490

41,255

19,319

120,702

 Other income and expense 

449

1,322

(62)

928

2,637

 Depreciation and amortization 

10,062

10,278

10,664

10,358

41,362

 Share-based compensation expense 

2,820

2,284

2,084

2,270

9,458

Adjusted EBITDA

$   36,969

$   50,374

$        53,941

$        32,875

$         174,159

Year over year growth, Total Net Sales

13.0 %

1.5 %

1.8 %

7.6 %

5.5 %

Operating Income Margin

7.7 %

7.3 %

6.8 %

3.1 %

6.3 %

Adjusted Operating Income Margin

5.6 %

7.8 %

8.4 %

4.6 %

6.7 %

Adjusted EBITDA Margin

8.8 %

10.7 %

11.0 %

7.8 %

9.7 %

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Total Net Sales

$ 372,247

$ 462,353

$      480,314

$      391,703

$      1,706,617

Operating Income, GAAP

10,594

43,535

39,391

9,886

103,406

 Restructuring and impairment 

1,149

778

815

2,264

5,006

 Strategic development and acquisition related costs 

579

819

590

357

2,345

 (Gain) loss on sale of assets and asset recovery 

(927)

(52)

62

-

(917)

Adjusted Operating Income

11,395

45,080

40,858

12,507

109,840

 Other income and expense 

827

(508)

(192)

309

436

 Depreciation and amortization 

10,765

10,595

9,815

10,315

41,490

 Share-based compensation expense 

2,468

2,661

3,181

3,042

11,352

Adjusted EBITDA

$   25,455

$   57,828

$        53,662

$        26,173

$         163,118

Operating Income Margin

2.8 %

9.4 %

8.2 %

2.5 %

6.1 %

Adjusted Operating Income Margin

3.1 %

9.8 %

8.5 %

3.2 %

6.4 %

Adjusted EBITDA Margin

6.8 %

12.5 %

11.2 %

6.7 %

9.6 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Engineered Building Systems

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Total Sales

$ 162,624

$ 191,910

$      188,183

$      156,964

$         699,681

External Sales

154,456

182,164

178,222

148,288

663,130

Operating Income, GAAP

6,894

14,948

13,043

8,263

43,148

 Restructuring and impairment 

186

941

695

1,136

2,958

 Strategic development and acquisition related costs 

-

-

-

173

173

 Loss on sale of assets and asset recovery 

137

-

-

-

137

Adjusted Operating Income

7,217

15,889

13,738

9,572

46,416

 Other income and expense 

(125)

1,291

(694)

733

1,205

 Depreciation and amortization 

2,285

2,255

2,198

2,077

8,815

Adjusted EBITDA

$     9,377

$   19,435

$        15,242

$        12,382

$           56,436

Year over year growth, Total sales

17.8 %

6.0 %

(7.8)%

3.8 %

3.7 %

Year over year growth, External Sales

14.9 %

3.8 %

(9.3)%

2.3 %

1.8 %

Operating Income Margin

4.2 %

7.8 %

6.9 %

5.3 %

6.2 %

Adjusted Operating Income Margin

4.4 %

8.3 %

7.3 %

6.1 %

6.6 %

Adjusted EBITDA Margin

5.8 %

10.1 %

8.1 %

7.9 %

8.1 %

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Total Sales

$ 138,023

$ 181,029

$      204,208

$      151,263

$         674,523

External Sales

134,454

175,471

196,596

145,021

651,542

Operating Income, GAAP

7,193

19,561

22,830

6,503

56,087

 Restructuring and impairment 

149

106

211

1,910

2,376

 (Gain) loss on sale of assets and asset recovery 

(927)

(52)

62

-

(917)

Adjusted Operating Income

6,415

19,615

23,103

8,413

57,546

 Other income and expense 

938

(931)

(362)

(41)

(396)

 Depreciation and amortization 

2,436

2,438

2,399

2,276

9,549

Adjusted EBITDA

$     9,789

$   21,122

$        25,140

$        10,648

$           66,699

Operating Income Margin

5.2 %

10.8 %

11.2 %

4.3 %

8.3 %

Adjusted Operating Income Margin

4.6 %

10.8 %

11.3 %

5.6 %

8.5 %

Adjusted EBITDA Margin

7.1 %

11.7 %

12.3 %

7.0 %

9.9 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Metal Components

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Total Sales

$ 154,895

$ 166,305

$      181,288

$      146,832

$         649,320

External Sales

133,290

140,639

155,183

127,528

556,640

Operating Income, GAAP

19,997

23,276

23,119

17,089

83,481

 Restructuring and impairment 

129

60

69

(1,403)

(1,145)

 Gain on insurance recovery 

(420)

(148)

-

-

(568)

Adjusted Operating Income

19,706

23,188

23,188

15,686

81,768

 Other income and expense 

52

55

84

53

244

 Depreciation and amortization 

1,302

1,266

1,422

1,576

5,566

Adjusted EBITDA

$   21,060

$   24,509

$        24,694

$        17,315

$           87,578

Year over year growth, Total sales

18.9 %

(0.1)%

8.9 %

9.4 %

8.7 %

Year over year growth, External Sales

19.3 %

0.1 %

10.9 %

10.4 %

9.6 %

Operating Income Margin

12.9 %

14.0 %

12.8 %

11.6 %

12.9 %

Adjusted Operating Income Margin

12.7 %

13.9 %

12.8 %

10.7 %

12.6 %

Adjusted EBITDA Margin

13.6 %

14.7 %

13.6 %

11.8 %

13.5 %

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Total Sales

$ 130,293

$ 166,512

$      166,532

$      134,173

$         597,510

External Sales

111,748

140,560

139,968

115,557

507,833

Operating Income, GAAP

13,071

26,803

21,254

12,376

73,504

 Restructuring and impairment 

432

202

103

305

1,042

Adjusted Operating Income

13,503

27,005

21,357

12,681

74,546

 Other income and expense 

167

92

(27)

28

260

 Depreciation and amortization 

1,150

1,365

1,406

1,334

5,255

Adjusted EBITDA

$   14,820

$   28,462

$        22,736

$        14,043

$           80,061

Operating Income Margin

10.0 %

16.1 %

12.8 %

9.2 %

12.3 %

Adjusted Operating Income Margin

10.4 %

16.2 %

12.8 %

9.5 %

12.5 %

Adjusted EBITDA Margin

11.4 %

17.1 %

13.7 %

10.5 %

13.4 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Insulated Metal Panels

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Total Sales

$ 102,937

$ 119,730

$      123,542

$      110,794

$         457,003

External Sales

86,773

98,026

105,064

97,513

387,376

Operating Income, GAAP

19,377

11,468

14,895

7,071

52,811

 Restructuring and impairment 

-

8

683

1,284

1,975

 Strategic development and acquisition related costs 

-

-

90

300

390

 Gain on insurance recovery 

(9,181)

-

-

-

(9,181)

 Unreimbursed business interruption costs 

191

235

28

-

454

Adjusted Operating Income

10,387

11,711

15,696

8,655

46,449

 Other income and expense 

340

(211)

356

(273)

212

 Depreciation and amortization 

4,258

4,516

4,742

4,388

17,904

Adjusted EBITDA

$   14,985

$   16,016

$        20,794

$        12,770

$           64,565

Year over year growth, Total sales

15.1 %

13.3 %

12.3 %

16.4 %

14.2 %

Year over year growth, External Sales

8.6 %

4.2 %

13.4 %

18.3 %

11.0 %

Operating Income Margin

18.8 %

9.6 %

12.1 %

6.4 %

11.6 %

Adjusted Operating Income Margin

10.1 %

9.8 %

12.7 %

7.8 %

10.2 %

Adjusted EBITDA Margin

14.6 %

13.4 %

16.8 %

11.5 %

14.1 %

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Total Sales

$   89,433

$ 105,694

$      110,001

$        95,195

$         400,323

External Sales

79,882

94,059

92,648

82,441

349,030

Operating Income, GAAP

2,782

8,911

7,513

2,192

21,398

 Restructuring and impairment 

176

59

404

-

639

 Strategic development and acquisition related costs 

28

9

-

-

37

Adjusted Operating Income

2,986

8,979

7,917

2,192

22,074

 Other income and expense 

(543)

32

270

35

(206)

 Depreciation and amortization 

4,683

4,357

3,926

4,392

17,358

Adjusted EBITDA

$     7,126

$   13,368

$        12,113

$          6,619

$           39,226

Operating Income Margin

3.1 %

8.4 %

6.8 %

2.3 %

5.3 %

Adjusted Operating Income Margin

3.3 %

8.5 %

7.2 %

2.3 %

5.5 %

Adjusted EBITDA Margin

8.0 %

12.6 %

11.0 %

7.0 %

9.8 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Metal Coil Coating

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Total Sales

$   86,729

$ 95,261

$        98,550

$        88,343

$         368,883

External Sales

45,945

48,556

50,257

48,020

192,778

Operating Income, GAAP

6,227

7,107

1,419

5,376

20,129

 Goodwill impairment 

-

-

6,000

-

6,000

Adjusted Operating Income

6,227

7,107

7,419

5,376

26,129

 Depreciation and amortization 

2,009

2,063

2,065

2,058

8,195

Adjusted EBITDA

$     8,236

$   9,170

$          9,484

$          7,434

$           34,324

Year over year growth, Total sales

8.6 %

(1.5)%

2.7%

0.0 %

2.2 %

Year over year growth, External Sales

(0.5)%

(7.1)%

(1.7)%

(1.4)%

(2.7)%

Operating Income Margin

7.2 %

7.5 %

1.4 %

6.1 %

5.5 %

Adjusted Operating Income Margin

7.2 %

7.5 %

7.5 %

6.1 %

7.1 %

Adjusted EBITDA Margin

9.5 %

9.6 %

9.6 %

8.4 %

9.3 %

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Total Sales

$   79,829

$ 96,684

$        95,987

$        88,340

$         360,840

External Sales

46,163

52,263

51,102

48,684

198,212

Operating Income, GAAP

6,686

10,531

9,310

6,706

33,233

 Restructuring and impairment 

39

-

-

-

39

Adjusted Operating Income

6,725

10,531

9,310

6,706

33,272

 Other income and expense 

-

2

-

31

33

 Depreciation and amortization 

2,166

2,214

1,849

2,106

8,335

Adjusted EBITDA

$     8,891

$ 12,747

$        11,159

$          8,843

$           41,640

Operating Income Margin

8.4 %

10.9 %

9.7 %

7.6 %

9.2 %

Adjusted Operating Income Margin

8.4 %

10.9 %

9.7 %

7.6 %

9.2 %

Adjusted EBITDA Margin

11.1 %

13.2 %

11.6 %

10.0 %

11.5 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)

Corporate

Trailing

 Fiscal Three Months Ended 

Twelve Months

 April 30, 

 July 30, 

 October 29, 

 January 28, 

 January 28, 

2017

2017

2017

2018

2018

Operating Loss, GAAP

$ (20,023)

$ (22,702)

$      (19,151)

$       (24,901)

$          (86,777)

 Restructuring and impairment 

-

-

262

77

339

 Strategic development and acquisition related costs 

124

1,297

103

254

1,778

 Acceleration of CEO retirement benefits 

-

-

-

4,600

4,600

Adjusted Operating Loss

(19,899)

(21,405)

(18,786)

(19,970)

(80,060)

 Other income and expense 

182

187

192

415

976

 Depreciation and amortization 

208

178

237

259

882

 Share-based compensation expense 

2,820

2,284

2,084

2,270

9,458

Adjusted EBITDA

$ (16,689)

$ (18,756)

$      (16,273)

$       (17,026)

$          (68,744)

Trailing

 Fiscal Three Months Ended 

Twelve Months

 May 1, 

 July 31, 

 October 30, 

 January 29, 

 January 29, 

2016

2016

2016

2017

2017

Operating Loss, GAAP

$ (19,138)

$ (22,271)

$      (21,516)

$       (17,891)

$          (80,816)

 Restructuring and impairment 

353

411

97

49

910

 Strategic development and acquisition related costs 

551

810

590

357

2,308

Adjusted Operating Loss

(18,234)

(21,050)

(20,829)

(17,485)

(77,598)

 Other income and expense 

265

297

(73)

256

745

 Depreciation and amortization 

330

221

235

207

993

 Share-based compensation expense 

2,468

2,661

3,181

3,042

11,352

Adjusted EBITDA

$ (15,171)

$ (17,871)

$      (17,486)

$       (13,980)

$          (64,508)

 

Cision View original content:http://www.prnewswire.com/news-releases/nci-building-systems-reports-first-quarter-2018-results-300609323.html

SOURCE NCI Building Systems, Inc.


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