Market Overview

NCI Building Systems Reports Third Quarter 2018 Results

Share:

NCI Building Systems Reports Third Quarter 2018 Results

PR Newswire

HOUSTON, Aug. 28, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE:NCS) ("NCI" or the "Company") today reported financial results for its third fiscal quarter ended July 29, 2018.

Third Quarter 2018 Financial and Operational Highlights:  

  • Sales rose 16.9% to $548.5 million for the quarter, compared to $469.4 million in the prior year's third quarter
  • Gross profit was $133.4 million or 24.3% of sales, compared to $115.0 million or 24.5% of sales, in the prior year's third quarter
  • Net income was $36.0 million for the quarter, compared to $18.2 million in the prior year's third quarter. Adjusted Net Income was $33.9 million this quarter, compared to $19.6 million in the prior year's third quarter
  • Net income per diluted common share for the quarter was $0.54, compared to $0.25 in the prior year's third quarter. Adjusted Net Income was $0.51 per diluted common share, compared to $0.27 in the prior year's third quarter
  • Adjusted EBITDA was $63.3 million, or 11.5% of revenues, for the quarter, compared to Adjusted EBITDA of $50.4 million, or 10.7% of revenues, in the prior year's third quarter
  • Total consolidated backlog increased to $650.9 million, up 12.1% year-over-year

Commenting on the quarter, Donald R. Riley, NCI's President and Chief Executive Officer, said, "Our third quarter results continue to demonstrate our commitment to maintaining commercial discipline across all of our businesses in an environment of increasing input costs. Led by a solid performance from our Buildings and Components segments, we are pleased to have seen volume increases and the successful execution of our adjacency strategy for Insulated Metal Panels and doors. NCI's backlog and bookings continue to support our favorable outlook for fiscal 2018 and beyond. We believe we are well positioned to finish 2018 with positive year-over-year improvement in both revenue and Adjusted EBITDA."

Third Quarter 2018 Results

Sales in the third quarter of fiscal 2018 increased to $548.5 million, up 16.9%, from $469.4 million in last year's third fiscal quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across all the segments, combined with volume growth in both the Engineered Metal Building and Metal Components segments.  

Gross profit increased 16.0% to $133.4 million in the quarter, compared to $115.0 million in the third quarter of fiscal 2017 and was up sequentially from $104.1 million in the second quarter of fiscal 2018. Gross profit margins were 24.3% for the third quarter of fiscal 2018, compared to 24.5% in the third quarter of fiscal 2017 and were up sequentially 150 basis points from 22.8% in the second quarter of fiscal 2018. Gross margins in the third quarter were lower than the third quarter of the prior year primarily as a result of product mix in the IMP segment.  

Engineering, selling, general and administrative ("ESG&A") expenses were $79.0 million for the quarter, compared to $76.3 million in the prior year's third fiscal quarter. As a percentage of revenues, ESG&A expenses were 14.4% in the fiscal 2018 third quarter compared to 16.3% in the prior year's third fiscal quarter. The year-over-year increase in ESG&A expenses is primarily in support of increase sales volumes during the period.

Operating income for the quarter was $54.5 million, compared to $34.1 million in the third quarter 2017. Adjusted Operating Income, a non-GAAP financial measure which excludes certain special items, increased 42.4% to $52.0 million in the current quarter, compared to $36.5 million in the same period last year.

Net income applicable to common shares in the quarter was $35.8 million, or $0.54 per diluted common share, compared to net income of $18.1 million, or $0.25 per diluted common share in the prior year's third quarter. Net income was impacted by the following special items: a $4.7 million gain on insurance recovery; a $1.0 million gain of the disposition of a non-strategic product line and a reduction of $0.4 million of restructuring and impairment charges, partially offset by a $3.6 million charge related to strategic development and acquisition related costs and $0.7 million associated tax effect of these items. Excluding the impact of these special items, third quarter 2018 Adjusted Net Income, a non-GAAP measure, was $33.9 million, or $0.51 per diluted common share, compared to $19.6 million, or $0.27 per diluted common share, in the prior year's third 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 $63.3 million this quarter, compared to $50.4 million in the prior year's third 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 third quarter were $43.3 million, compared to $45.9 million at the end of the third quarter of fiscal 2017. Cash and cash equivalents increased sequentially by $8.0 million from $35.3 million at the end of the second quarter of fiscal 2018 due to improved working capital management year-over-year, lower taxes and lower interest rates. NCI's net debt leverage ratio (net debt/Adjusted EBITDA) at the end of the third quarter was 1.95x. As of July 29, 2018, the Company's $150.0 million asset-based lending (ABL) facility remained undrawn.

Third Quarter 2018 Segment Performance

Sales in the Engineered Building Systems segment were $230.1 million in the third quarter of fiscal 2018, compared to $191.9 million in the prior year period, increasing primarily as a result of commercial discipline passing through higher input costs and increased tonnage volumes. Operating income increased 62.5% to $24.3 million this quarter, compared to $14.9 million in the prior year's third quarter. Adjusted Operating Income, a non-GAAP measure, increased 50.0% to $23.8 million this quarter, compared to $15.9 million in the third 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 $186.4 million in sales during the quarter, an increase of 12.1% from $166.3 million in the prior year's third quarter, led by the disciplined pass-through of increasing input costs and higher external volumes in the segment. Operating income was $28.7 million in the third fiscal quarter of 2018, compared to $23.3 million in the same period last year. Adjusted Operating Income was $28.7 million in the quarter, compared to $23.2 million in the prior year's third quarter. The Metal Components segment's operating margins increased as a result of improved operating leverage on higher external volumes.

The Insulated Metal Panels ("IMP") segment generated $133.7 million in sales during the quarter, an increase of 11.7% from $119.7 million in the prior year's third quarter, as a result of higher external volumes and commercial discipline emphasizing project profitability over volumes. Operating income was $17.9 million for the quarter, compared to $11.5 million in the third quarter of 2017. Adjusted Operating Income was $12.1 million, compared to $11.7 million in the same period last year. The IMP segment's Adjusted Operating Income Margins decreased from the prior year primarily as a result of a change in product mix.

Sales in the Metal Coil Coating segment were $116.4 million during the third quarter of fiscal 2018, an increase of 22.2% from $95.3 million in the prior year's third 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 $9.1 million in the third quarter of fiscal 2018 compared to $7.1 million in the third quarter of fiscal 2017, respectively. Operating margins in the Metal Coil Coating segment improved as a result of lower ESG&A costs and commercial discipline.

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 fourth quarter of fiscal 2018, NCI expects revenues to be in the range of $550 to $570 million and Adjusted EBITDA to be in the range of $60 to $70 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.

Recent Developments

On July 17, 2018, NCI entered into an Agreement and Plan of Merger (the "Merger Agreement") with Ply GemParent, LLC, a Delaware limited liability company ("Ply Gem"), and for certain limited purposes set forth in the Merger Agreement, Clayton, Dubilier & Rice, LLC, a Delaware limited liability company (the "Sponsor"). Pursuant to the terms of the Merger Agreement, at the closing of the merger, Ply Gem will be merged with and into the Company with the Company continuing its existence as a Delaware corporation (the "Merger"). At the closing of the Merger, all of Ply Gem's equity interests (the "Ply Gem LLC Interests") as of immediately prior to the closing of the Merger will be converted into the right of the holders of the Ply Gem LLC Interests (the "Ply Gem Holders") to receive, in the aggregate with respect to all such Ply Gem LLC Interests, 58.7 million shares of NCI common stock, par value $0.01 per share ("Common Stock") (collectively, the "Aggregate Merger Consideration"), with each Ply Gem Holder being entitled to receive its pro rata share of the Aggregate Merger Consideration. The shares of NCI's Common Stock outstanding prior to the Merger will remain outstanding after the closing of the Merger. Upon the close of the Merger, the pre-Merger NCI shareholders will own approximately 53% of the Company's common equity, with the Ply Gem Holders owning approximately 47%.

A preliminary proxy detailing the Merger was filed with the Securities and Exchange Commission (the "SEC") on August 9, 2018. The parties expect the Merger to close in the fourth calendar quarter of 2018, subject to approval by NCI shareholders and customary conditions, including regulatory approvals.

On August 28, 2018 Ply Gem announced it has entered into an agreement with Andersen Corporation to acquire the Silver Line vinyl window and patio door division, which had 2017 annual revenues of more than $440 million. The transaction, valued at approximately $190 million, aligns with Ply Gem's strategy of driving growth in revenues and earnings in part through targeted acquisitions of highly complementary businesses. Based upon 2018 estimated Adjusted EBITDA and giving effect to anticipated cost savings and synergies, the transaction is expected to result in a purchase price multiple of 4.4x and will have a neutral impact on the leverage ratio of the pro forma NCI and Ply Gem combination. 

Conference Call Information

The NCI Building Systems, Inc. third quarter fiscal 2018 conference call is scheduled for Wednesday, August 29, 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 13681318# when prompted. The taped replay will be available two hours after the call through September 12, 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 Matthews
Vice President, Investor Relations
281-897-7785

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 the fourth 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, risks and uncertainties relating to the Merger, including the possibility that the Merger does not close when expected or at all because the conditions to closing are not satisfied on a timely basis or at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Merger; diversion of management's attention from ongoing business operations and opportunities as a result of the pending Merger; our ability to secure stockholder and regulatory approvals for the Merger in a timely manner or on the terms desired or anticipated; retention and replacement of key personnel in connection with the pendency of the Merger; 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 or refinance our existing debt, 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; our ability to make strategic acquisitions accretive to earnings; retention and replacement of key personnel; our ability to carry out our restructuring plans and to fully realize the expected cost savings; 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 price of our Common Stock; the dilutive effect on the Company's common stockholders of potential sales of 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 Nine Months Ended


 July 29, 


 July 30, 


 July 29, 


 July 30, 


2018


2017


2018


2017









Sales 

$  548,525


$  469,385


$  1,426,943


$  1,281,552

Cost of sales 

415,124


354,416


1,097,542


981,793

      Gross profit 

133,401


114,969


329,401


299,759


24.3%


24.5%


23.1%


23.4%









Engineering, selling, general and administrative expenses 

79,039


76,309


228,231


220,473

Intangible asset amortization 

2,412


2,405


7,237


7,215

Restructuring and impairment charges, net 

(439)


1,009


1,143


3,587

Strategic development and acquisition related costs 

3,642


1,297


5,503


1,778

(Gain) loss on disposition of business 

(1,013)


-


5,673


-

Gain on insurance recovery 

(4,741)


(148)


(4,741)


(9,749)

      Income from operations 

54,501


34,097


86,355


76,455









Interest income 

48


20


118


164

Interest expense 

(4,572)


(7,373)


(16,913)


(21,738)

Foreign exchange (loss) gain 

(258)


985


(92)


1,035

Loss on extinguishment of debt 

-


-


(21,875)


-

Other income, net 

345


337


1,072


1,045









      Income before income taxes 

50,064


28,066


48,665


56,961

Provision for income taxes 

14,078


9,845


13,114


19,727


28.1%


35.1%


26.9%


34.6%









Net income 

35,986


18,221


35,551


37,234









Net income allocated to participating securities 

(221)


(102)


(248)


(240)









Net income applicable to common shares 

$    35,765


$    18,119


$       35,303


$       36,994









Check 








Income per common share: 








    Basic 

$        0.54


$        0.26


$           0.53


$           0.52

    Diluted 

$        0.54


$        0.25


$           0.53


$           0.52









Weighted average number of common shares outstanding: 








    Basic 

66,335


71,047


66,361


70,973

    Diluted 

66,438


71,183


66,477


71,134









Increase in sales 

16.9%


1.5%


11.3%


6.4%









Engineering, selling, general and administrative expenses percentage 

14.4%


16.3%


16.0%


17.2%

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 










 July 29, 


October 29,




2018


2017







ASSETS 




  Current assets: 





 Cash and cash equivalents 

$      43,322


$      65,658


 Restricted cash 

180


136


 Accounts receivable, net 

211,098


199,897


 Inventories, net 

260,879


198,296


 Income taxes receivable 

1,171


3,617


 Investments in debt and equity securities, at market 

5,785


6,481


 Prepaid expenses and other 

35,859


31,359


 Assets held for sale 

7,272


5,582



 Total current assets 

565,566


511,026








 Property, plant and equipment, net 

230,851


226,995


 Goodwill  

148,291


148,291


 Intangible assets, net 

129,933


137,148


 Deferred income taxes 

1,701


2,544


 Other assets, net 

5,352


5,108



 Total assets 

$ 1,081,694


$ 1,031,112







LIABILITIES AND STOCKHOLDERS' EQUITY 




  Current liabilities: 





 Current portion of long-term debt 

$        4,150


$             -


 Note payable 

994


440


 Accounts payable 

179,700


147,772


 Accrued compensation and benefits 

58,454


59,189


 Accrued interest 

1,488


6,414


 Accrued income taxes 

7,925


-


 Other accrued expenses 

106,204


102,233



 Total current liabilities 

358,915


316,048








 Long-term debt, net of deferred financing costs of $5,971 and $6,857 

403,842


387,290


 Deferred income taxes 

1,740


4,297


 Other long-term liabilities 

18,111


18,230



 Total long-term liabilities 

423,693


409,817














 Common stock 

663


687


 Additional paid-in capital 

521,059


562,277


 Accumulated deficit 

(213,846)


(248,046)


 Accumulated other comprehensive loss, net 

(7,623)


(7,531)


 Treasury stock, at cost 

(1,167)


(2,140)



 Total stockholders' equity  

299,086


305,247









 Total liabilities and stockholders' equity  

$ 1,081,694


$ 1,031,112

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)










Fiscal Nine Months Ended


 July 29, 


 July 30, 


2018


2017





Cash flows from operating activities:




      Net income

$  35,551


$  37,234

      Adjustments to reconcile net income to net cash from operating activities




            Depreciation and amortization

30,974


30,656

            Amortization of deferred financing costs

1,140


1,398

            Loss on extinguishment of debt

21,875


-

            Share-based compensation expense

8,909


8,146

            Gain on insurance recovery

(4,741)


(9,749)

            Loss on disposition of business, net

5,092


-

            (Gains) losses on assets, net

(875)


438

            Provision for doubtful accounts

(177)


1,145

            (Benefit) provision for deferred income taxes

(1,676)


70

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




            Accounts receivable

(13,512)


(8,559)

            Inventories

(64,882)


(25,909)

            Income taxes

2,446


(1,284)

            Prepaid expenses and other

(3,686)


1,069

            Accounts payable

34,567


(22,212)

            Accrued expenses

6,088


(10,499)

            Other, net

(185)


(1,347)





Net cash provided by operating activities

56,908


597





Cash flows from investing activities:




      Capital expenditures

(34,867)


(15,629)

      Proceeds from sale of property, plant and equipment

6,338


2,533

      Business disposition, net

(1,426)


-

      Proceeds from insurance

4,741


8,593





Net cash used in investing activities

(25,214)


(4,503)





Cash flows from financing activities:




     (Deposit) refund of restricted cash

(44)


96

     Proceeds from stock options exercised

1,279


1,195

     Proceeds from ABL facility 

85,000


35,000

     Payments on ABL facility

(85,000)


(35,000)

     Proceeds from term loan

415,000


-

     Payments on term loan

(145,184)


(10,180)

     Payments on senior notes

(265,470)


-

     Payments on note payable

(1,245)


(1,096)

     Payments of financing costs

(6,521)


-

     Payments related to tax withholding for share-based compensation

(5,048)


(2,389)

     Purchases of treasury stock

(46,705)


(3,533)





Net cash used in financing activities

(53,938)


(15,907)

Effect of exchange rate changes on cash and cash equivalents

(92)


333

Net decrease in cash and cash equivalents

(22,336)


(19,480)





Cash and cash equivalents at beginning of period

65,658


65,403





Cash and cash equivalents at end of period

$  43,322


$  45,923

 

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 


 Fiscal Nine Months Ended 


 July 29, 

 July 30, 


 July 29, 

 July 30, 


2018

2017


2018

2017

Net income per diluted common share, GAAP basis

$      0.54

$      0.25


$      0.53

$      0.52

  Loss on extinguishment of debt

-

-


0.33

-

  (Gain) loss on disposition of business

(0.02)

-


0.09

-

  Restructuring and impairment charges, net

(0.01)

0.01


0.01

0.05

  Strategic development and acquisition related costs

0.06

0.02


0.08

0.02

  Acceleration of CEO retirement benefits

-

-


0.07

-

  Gain on insurance recovery

(0.07)

0.00


(0.07)

(0.14)

  Other, net

-

0.00


0.00

0.01

  Tax effect of applicable non-GAAP adjustments (1)

0.01

(0.01)


(0.14)

0.02

Adjusted net income per diluted common share (2)

$      0.51

$      0.27


$      0.90

$      0.48














 Fiscal Three Months Ended 


Fiscal Nine Months Ended


 July 29, 

 July 30, 


 July 29, 

 July 30, 


2018

2017


2018

2017

Net income applicable to common shares, GAAP basis

$  35,765

$  18,119


$  35,303

$  36,994

  Loss on extinguishment of debt

-

-


21,875

-

  (Gain) loss on disposition of business

(1,013)

-


5,673

-

  Restructuring and impairment charges, net

(439)

1,009


1,143

3,587

  Strategic development and acquisition related costs

3,642

1,297


5,503

1,778

  Acceleration of CEO retirement benefits

-

-


4,600

-

  Gain on insurance recovery

(4,741)

(148)


(4,741)

(9,749)

  Other, net

-

235


(323)

563

  Tax effect of applicable non-GAAP adjustments (1)

696

(933)


(9,296)

1,490

Adjusted net income applicable to common shares (2)

$  33,910

$  19,579


$  59,737

$  34,663


 (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 Nine Months Ended





 July 29, 



 July 30, 





 July 29, 



 July 30, 





2018



2017





2018



2017






















% of
Total
Sales



% of
Total
Sales


%
Change



% of
Total
Sales



% of
Total
Sales


%
Change

Total Sales
















Engineered Building Systems

$  230,098

35


$  191,910

33


19.9%


$     554,302

32


$     505,797

33


9.6%

Metal Components

186,421

28


166,305

29


12.1%


501,709

29


455,373

29


10.2%

Insulated Metal Panels

133,740

20


119,730

21


11.7%


357,947

21


317,862

21


12.6%

Metal Coil Coating

116,440

17


95,261

17


22.2%


299,973

18


270,330

17


11.0%

Total sales

666,699

100


573,206

100


16.3%


1,713,931

100


1,549,362

100


10.6%

Less: Intersegment sales

(118,174)

18


(103,821)

18


13.8%


(286,988)

17


(267,810)

17


7.2%

Total net sales

$  548,525

82


$  469,385

82


16.9%


$  1,426,943

83


$  1,281,552

83


11.3%

















External Sales


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$  218,614

40


$  182,164

39


20.0%


$     524,038

37


$     481,641

38


8.8%

Metal Components

165,697

30


140,639

30


17.8%


440,886

31


389,486

30


13.2%

Insulated Metal Panels

106,605

19


98,026

21


8.8%


303,910

21


267,240

21


13.7%

Metal Coil Coating

57,609

11


48,556

10


18.6%


158,109

11


143,185

11


10.4%

Total external sales

$  548,525

100


$  469,385

100


16.9%


$  1,426,943

100


$  1,281,552

100


11.3%

















Operating Income


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$    24,296

11


$    14,948

8


62.5%


$       41,830

8


$       28,345

6


47.6%

Metal Components

28,688

15


23,276

14


23.3%


67,859

14


55,649

12


21.9%

Insulated Metal Panels

17,859

13


11,468

10


55.7%


26,470

7


33,037

10


-19.9%

Metal Coil Coating

9,121

8


7,107

7


28.3%


21,626

7


20,040

7


7.9%

Corporate

(25,463)

-


(22,702)

-


12.2%


(71,430)

-


(60,616)

-


17.8%

Total operating income

$    54,501

10


$    34,097

7


59.8%


$       86,355

6


$       76,455

6


12.9%

















Adjusted Operating Income (1)


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$    23,832

10


$    15,889

8


50.0%


$       42,955

8


$       31,519

6


36.3%

Metal Components

28,713

15


23,188

14


23.8%


66,601

13


55,575

12


19.8%

Insulated Metal Panels

12,105

9


11,711

10


3.4%


29,135

8


24,290

8


19.9%

Metal Coil Coating

9,121

8


7,107

7


28.3%


21,626

7


20,040

7


7.9%

Corporate

(21,821)

-


(21,405)

-


1.9%


(61,784)

-


(58,789)

-


5.1%

Total adjusted operating income

$    51,950

9


$    36,490

8


42.4%


$       98,533

7


$       72,635

6


35.7%

















Adjusted EBITDA (2)


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$    25,558

11


$    19,435

10


31.5%


$       49,726

9


$       39,460

8


26.0%

Metal Components

30,124

16


24,509

15


22.9%


71,152

14


59,612

13


19.4%

Insulated Metal Panels

16,378

12


16,016

13


2.3%


42,081

12


37,620

12


11.9%

Metal Coil Coating

11,218

10


9,170

10


22.3%


27,866

9


26,249

10


6.2%

Corporate

(20,026)

-


(18,756)

-


6.8%


(55,028)

-


(49,425)

-


11.3%

Total adjusted EBITDA

$    63,252

12


$    50,374

11


25.6%


$     135,797

10


$     113,516

9


19.6%


 (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 Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Total Net Sales

$      488,726

$       421,349

$ 457,069

$ 548,525


$     1,426,943


$      1,915,669










Operating Income, GAAP

33,325

12,898

18,956

54,501


86,355


119,680

 Restructuring and impairment 

1,709

1,094

488

(439)


1,143


2,852

 Strategic development and acquisition related costs 

193

727

1,134

3,642


5,503


5,696

 Loss (gain) on disposition of business 

-

-

6,686

(1,013)


5,673


5,673

 Acceleration of CEO retirement benefits 

-

4,600

-

-


4,600


4,600

 Gain on insurance recovery 

-

-

-

(4,741)


(4,741)


(4,741)

 Unreimbursed business interruption costs 

28

-

-

-


-


28

 Goodwill impairment 

6,000

-

-

-


-


6,000

Adjusted Operating Income

41,255

19,319

27,264

51,950


98,533


139,788










 Other income and expense 

(62)

928

(34)

87


981


919

 Depreciation and amortization 

10,664

10,358

10,442

10,174


30,974


41,638

 Share-based compensation expense 

2,084

2,270

1,998

1,041


5,309


7,393

Adjusted EBITDA

$        53,941

$         32,875

$   39,670

$   63,252


$        135,797


$         189,738










Year over year growth, Total Net Sales

1.8 %

7.6 %

8.7 %

16.9 %


11.3 %


8.7 %

Operating Income Margin

6.8 %

3.1 %

4.1 %

9.9 %


6.1 %


6.2 %

Adjusted Operating Income Margin

8.4 %

4.6 %

6.0 %

9.5 %


6.9 %


7.3 %

Adjusted EBITDA Margin

11.0 %

7.8 %

8.7 %

11.5 %


9.5 %


9.9 %

























Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Total Net Sales

$      480,314

$       391,703

$ 420,464

$ 469,385


$     1,281,552


$      1,761,866










Operating Income, GAAP

39,391

9,886

32,472

34,097


76,455


115,846

 Restructuring and impairment 

815

2,264

315

1,009


3,588


4,403

 Strategic development and acquisition related costs 

590

357

124

1,297


1,778


2,368

 Loss on sale of assets and asset recovery 

62

-

137

-


137


199

 Gain on insurance recovery 

-

-

(9,601)

(148)


(9,749)


(9,749)

 Unreimbursed business interruption costs 

-

-

191

235


426


426

Adjusted Operating Income

40,858

12,507

23,638

36,490


72,635


113,493










 Other income and expense 

(192)

309

449

1,322


2,080


1,888

 Depreciation and amortization 

9,815

10,315

10,062

10,278


30,655


40,470

 Share-based compensation expense 

3,181

3,042

2,820

2,284


8,146


11,327

Adjusted EBITDA

$        53,662

$         26,173

$   36,969

$   50,374


$        113,516


$         167,178










Operating Income Margin

8.2 %

2.5 %

7.7 %

7.3 %


6.0 %


6.6 %

Adjusted Operating Income Margin

8.5 %

3.2 %

5.6 %

7.8 %


5.7 %


6.4 %

Adjusted EBITDA Margin

11.2 %

6.7 %

8.8 %

10.7 %


8.9 %


9.5 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










Engineered Building Systems
















Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Total Sales

$      188,183

$       156,964

$ 167,240

$ 230,098


$        554,302


$         742,485

External Sales

178,222

148,288

157,136

218,614


524,038


702,260










Operating Income, GAAP

13,043

8,263

9,271

24,296


41,830


54,873

 Restructuring and impairment 

695

1,136

280

(464)


952


1,647

 Strategic development and acquisition related costs 

-

173

-

-


173


173

Adjusted Operating Income

13,738

9,572

9,551

23,832


42,955


56,693










 Other income and expense 

(694)

733

(88)

(179)


466


(228)

 Depreciation and amortization 

2,198

2,077

2,323

1,905


6,305


8,503

Adjusted EBITDA

$        15,242

$         12,382

$   11,786

$   25,558


$          49,726


$           64,968










Year over year growth, Total sales

(7.8)%

3.8 %

2.8 %

19.9 %


9.6 %


4.6 %

Year over year growth, External Sales

(9.3)%

2.3 %

1.7 %

20.0 %


8.8 %


3.5 %

Operating Income Margin

6.9 %

5.3 %

5.5 %

10.6 %


7.5 %


7.4 %

Adjusted Operating Income Margin

7.3 %

6.1 %

5.7 %

10.4 %


7.7 %


7.6 %

Adjusted EBITDA Margin

8.1 %

7.9 %

7.0 %

11.1 %


9.0 %


8.8 %

























Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Total Sales

$      204,208

$       151,263

$ 162,624

$ 191,910


505,797


$         710,005

External Sales

196,596

145,021

154,456

182,164


481,641


678,237










Operating Income, GAAP

22,830

6,503

6,894

14,948


28,345


51,175

 Restructuring and impairment 

211

1,910

186

941


3,037


3,248

 Loss on sale of assets and asset recovery 

62

-

137

-


137


199

Adjusted Operating Income

23,103

8,413

7,217

15,889


31,519


54,622










 Other income and expense 

(362)

(41)

(125)

1,291


1,125


763

 Depreciation and amortization 

2,399

2,276

2,285

2,255


6,816


9,215

Adjusted EBITDA

$        25,140

$         10,648

$     9,377

$   19,435


$          39,460


$           64,600










Operating Income Margin

11.2 %

4.3 %

4.2 %

7.8 %


5.6 %


7.2 %

Adjusted Operating Income Margin

11.3 %

5.6 %

4.4 %

8.3 %


6.2 %


7.7 %

Adjusted EBITDA Margin

12.3 %

7.0 %

5.8 %

10.1 %


7.8 %


9.1 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










Metal Components
















Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Total Sales

$      181,288

$       146,832

$ 168,456

$ 186,421


$        501,709


$         682,997

External Sales

155,183

127,528

147,661

165,697


440,886


596,069










Operating Income, GAAP

23,119

17,089

22,082

28,688


67,859


90,978

 Restructuring and impairment 

69

(1,403)

120

25


(1,258)


(1,189)

Adjusted Operating Income

23,188

15,686

22,202

28,713


66,601


89,789










 Other income and expense 

84

53

67

54


174


258

 Depreciation and amortization 

1,422

1,576

1,444

1,357


4,377


5,799

Adjusted EBITDA

$        24,694

$         17,315

$   23,713

$   30,124


$          71,152


$           95,846










Year over year growth, Total sales

8.9 %

9.4 %

8.8 %

12.1 %


10.2 %


9.8 %

Year over year growth, External Sales

10.9 %

10.4 %

10.8 %

17.8 %


13.2 %


12.6 %

Operating Income Margin

12.8 %

11.6 %

13.1 %

15.4 %


13.5 %


13.3 %

Adjusted Operating Income Margin

12.8 %

10.7 %

13.2 %

15.4 %


13.3 %


13.1 %

Adjusted EBITDA Margin

13.6 %

11.8 %

14.1 %

16.2 %


14.2 %


14.0 %

























Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Total Sales

$      166,532

$       134,173

$ 154,895

$ 166,305


$        455,373


$         621,905

External Sales

139,968

115,557

133,290

140,639


389,486


529,454










Operating Income, GAAP

21,254

12,376

19,997

23,276


55,649


76,903

 Restructuring and impairment 

103

305

129

60


494


597

 Gain on insurance recovery 

-

-

(420)

(148)


(568)


(568)

Adjusted Operating Income

21,357

12,681

19,706

23,188


55,575


76,932










 Other income and expense 

(27)

28

52

55


135


108

 Depreciation and amortization 

1,406

1,334

1,302

1,266


3,902


5,308

Adjusted EBITDA

$        22,736

$         14,043

$   21,060

$   24,509


$          59,612


$           82,348










Operating Income Margin

12.8 %

9.2 %

12.9 %

14.0 %


12.2 %


12.4 %

Adjusted Operating Income Margin

12.8 %

9.5 %

12.7 %

13.9 %


12.2 %


12.4 %

Adjusted EBITDA Margin

13.7 %

10.5 %

13.6 %

14.7 %


13.1 %


13.2 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










Insulated Metal Panels
















Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Total Sales

$      123,542

$       110,794

$ 113,413

$ 133,740


$        357,947


$         481,489

External Sales

105,064

97,513

99,792

106,605


303,910


408,974










Operating Income, GAAP

14,895

7,071

1,540

17,859


26,470


41,365

 Restructuring and impairment 

683

1,284

88

-


1,372


2,055

 Strategic development and acquisition related costs 

90

300

61

-


361


451

 Loss (gain) on disposition of business 

-

-

6,686

(1,013)


5,673


5,673

 Gain on insurance recovery 

-

-

-

(4,741)


(4,741)


(4,741)

 Unreimbursed business interruption costs 

28

-

-

-


-


28

Adjusted Operating Income

15,696

8,655

8,375

12,105


29,135


44,831










 Other income and expense 

356

(273)

223

(51)


(101)


255

 Depreciation and amortization 

4,742

4,388

4,335

4,324


13,047


17,789

Adjusted EBITDA

$        20,794

$         12,770

$   12,933

$   16,378


$          42,081


$           62,875










Year over year growth, Total sales

12.3 %

16.4 %

10.2 %

11.7 %


12.6 %


12.5 %

Year over year growth, External Sales

13.4 %

18.3 %

15.0 %

8.8 %


13.7 %


13.6 %

Operating Income Margin

12.1 %

6.4 %

1.4 %

13.4 %


7.4 %


8.6 %

Adjusted Operating Income Margin

12.7 %

7.8 %

7.4 %

9.1 %


8.1 %


9.3 %

Adjusted EBITDA Margin

16.8 %

11.5 %

11.4 %

12.2 %


11.8 %


13.1 %

























Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Total Sales

$      110,001

$         95,195

$ 102,937

$ 119,730


$        317,862


$         427,863

External Sales

92,648

82,441

86,773

98,026


267,240


359,888










Operating Income, GAAP

7,513

2,192

19,377

11,468


33,037


40,550

 Restructuring and impairment 

404

-

-

8


8


412

 Gain on insurance recovery 

-

-

(9,181)

-


(9,181)


(9,181)

 Unreimbursed business interruption costs 

-

-

191

235


426


426

Adjusted Operating Income

7,917

2,192

10,387

11,711


24,290


32,207










 Other income and expense 

270

35

340

(211)


164


434

 Depreciation and amortization 

3,926

4,392

4,258

4,516


13,166


17,092

Adjusted EBITDA

$        12,113

$           6,619

$   14,985

$   16,016


$          37,620


$           49,733










Operating Income Margin

6.8 %

2.3 %

18.8 %

9.6 %


10.4 %


9.5 %

Adjusted Operating Income Margin

7.2 %

2.3 %

10.1 %

9.8 %


7.6 %


7.5 %

Adjusted EBITDA Margin

11.0 %

7.0 %

14.6 %

13.4 %


11.8 %


11.6 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










Metal Coil Coating
















Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Total Sales

$        98,550

$         88,343

$   95,190

$ 116,440


$        299,973


$         398,523

External Sales

50,257

48,020

52,480

57,609


158,109


208,366










Operating Income, GAAP

1,419

5,376

7,129

9,121


21,626


23,045

 Goodwill impairment 

6,000

-

-

-


-


6,000

Adjusted Operating Income

7,419

5,376

7,129

9,121


21,626


29,045










 Depreciation and amortization 

2,065

2,058

2,085

2,097


6,240


8,305

Adjusted EBITDA

$          9,484

$           7,434

$     9,214

$   11,218


$          27,866


$           37,350










Year over year growth, Total sales

2.7 %

0.0 %

9.8%

22.2 %


11.0 %


8.8 %

Year over year growth, External Sales

(1.7)%

(1.4)%

14.2 %

18.6 %


10.4 %


7.2 %

Operating Income Margin

1.4 %

6.1 %

7.5 %

7.8 %


7.2 %


5.8 %

Adjusted Operating Income Margin

7.5 %

6.1 %

7.5 %

7.8 %


7.2 %


7.3 %

Adjusted EBITDA Margin

9.6 %

8.4 %

9.7 %

9.6 %


9.3 %


9.4 %

























Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Total Sales

$        95,987

$         88,340

$   86,729

$   95,261


$        270,330


$         366,317

External Sales

51,102

48,684

45,945

48,556


143,185


194,287










Operating Income, GAAP

9,310

6,706

6,227

7,107


20,040


29,350

Adjusted Operating Income

9,310

6,706

6,227

7,107


20,040


29,350










 Other income and expense 

-

31

-

-


31


31

 Depreciation and amortization 

1,849

2,106

2,009

2,063


6,178


8,027

Adjusted EBITDA

$        11,159

$           8,843

$     8,236

$     9,170


$          26,249


$           37,408










Operating Income Margin

9.7 %

7.6 %

7.2 %

7.5 %


7.4 %


8.0 %

Adjusted Operating Income Margin

9.7 %

7.6 %

7.2 %

7.5 %


7.4 %


8.0 %

Adjusted EBITDA Margin

11.6 %

10.0 %

9.5 %

9.6 %


9.7 %


10.2 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










Corporate
















Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 29, 

 January 28, 

 April 29, 

 July 29, 


 July 29, 


 July 29, 


2017

2018

2018

2018


2018


2018

Operating Loss, GAAP

$       (19,151)

$       (24,901)

$  (21,066)

$  (25,463)


$        (71,430)


$          (90,581)

 Restructuring and impairment 

262

77

-

-


77


339

 Strategic development and acquisition related costs 

103

254

1,073

3,642


4,969


5,072

 Acceleration of CEO retirement benefits 

-

4,600

-

-


4,600


4,600

Adjusted Operating Loss

(18,786)

(19,970)

(19,993)

(21,821)


(61,784)


(80,570)










 Other income and expense 

192

415

(236)

263


442


634

 Depreciation and amortization 

237

259

255

491


1,005


1,242

 Share-based compensation expense 

2,084

2,270

1,998

1,041


5,309


7,393

Adjusted EBITDA

$       (16,273)

$       (17,026)

$  (17,976)

$  (20,026)


$        (55,028)


$          (71,301)


































Fiscal Nine 


Trailing


 Fiscal Three Months Ended 


Months Ended


Twelve Months


 October 30, 

 January 29, 

 April 30, 

 July 30, 


 July 30, 


 July 30, 


2016

2017

2017

2017


2017


2017

Operating Loss, GAAP

$       (21,516)

$       (17,891)

$  (20,023)

$  (22,702)


$        (60,616)


$          (82,132)

 Restructuring and impairment 

97

49

-

-


49


146

 Strategic development and acquisition related costs 

590

357

124

1,297


1,778


2,368

Adjusted Operating Loss

(20,829)

(17,485)

(19,899)

(21,405)


(58,789)


(79,618)










 Other income and expense 

(73)

256

182

187


625


552

 Depreciation and amortization 

235

207

208

178


593


828

 Share-based compensation expense 

3,181

3,042

2,820

2,284


8,146


11,327

Adjusted EBITDA

$       (17,486)

$       (13,980)

$  (16,689)

$  (18,756)


$        (49,425)


$          (66,911)

 

Cision View original content:http://www.prnewswire.com/news-releases/nci-building-systems-reports-third-quarter-2018-results-300703652.html

SOURCE NCI Building Systems, Inc.

View Comments and Join the Discussion!