Exhibit 99.1

 

NEWS RELEASE

 

NCI Building Systems Reports

Third Quarter Fiscal 2014 Results

 

HOUSTON, September 8, 2014 — NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the third quarter ended August 3, 2014.

 

Third Quarter Financial and Operational Highlights:

 

·

Sales rose 14.0% to $361.6 million, compared to prior year’s third quarter

·

Gross profit increased 18.7% to $79.6 million from $67.0 million in the comparable quarter last year

·

Reported net income per diluted common share was $0.08 and adjusted net income per diluted common share of $0.10

·

Adjusted EBITDA rose 47% to $25.0 million, compared to $17.0 million in the prior year

·

Each segment achieved year-over-year double-digit growth in quarterly revenue and operating income as a result of the Company’s growth initiatives, commercial discipline and market growth

·

Backlog increased 5.6% to $337.2 million year-over-year

 

Norman C. Chambers, Chairman, President and Chief Executive, commented, "We delivered solid results in the third quarter, rebounding nicely after a weak first half as conditions improved and we entered our seasonally stronger second half. Importantly, we exceeded fiscal 2013’s year to date revenue by 8% and realized an improvement in pricing due to the commercial discipline displayed across all of our divisions since last August. As growth in the nonresidential construction market continues to gain traction, we are committed to maintaining commercial discipline and operational efficiency to maximize the leverage inherent in our integrated business model.”

 

For the fiscal third quarter, the Company reported net income of $6.1 million, or $0.08 per diluted common share compared to a net loss of $12.2 million, or $0.19 loss per diluted common share in last year’s third quarter. Third quarter adjusted net income was $7.2 million, or $0.10 per diluted common share, which excludes the impact of $1.5 million of non-recurring, non-operational strategic development costs. Last year’s third quarter adjusted net income per diluted common share, excluding the impact of early debt extinguishment costs, was $0.02.

 

Sales grew 14.0% to $361.6 million from $317.2 million in the prior year's third quarter, reflecting double-digit total sales growth in all three operating segments.

 

Gross profit increased 18.7% to $79.6 million when compared to $67.0 million in the third quarter of 2013. Gross margin improved sequentially to 22.0% from 19.5% in the second quarter of 2014. The improved performance was primarily driven by the impact of value pricing and increased operating leverage.

 

Engineering, selling, general administrative (ESG&A) expenses rose slightly to $65.9 million from $62.8 million in the third quarter of 2013 as a result of investments in the sales force, higher commissions due to higher volumes, and the impact of growth initiatives. ESG&A as a percent of revenues declined to 18.2% compared to 19.8% in last year’s third quarter.

 

 

Cash and cash equivalents at the end of the third quarter increased to $27.7 million compared to $16.1 million in the comparable period in fiscal 2013 and grew sequentially from $12.5 million at the end of the second quarter of fiscal 2014. In addition, the Company’s $150.0 million ABL facility remained undrawn at the end of the third quarter.

 

Net interest expense decreased to $3.1 million compared to $5.1 million in the third quarter of 2013, as a result of last year’s refinancing of the Company’s term loan. The weighted average number of diluted common shares used in the calculation of the third quarter of 2014 income per diluted common share was 74.4 million compared to 64.2 million in the same quarter a year ago. The 2013 weighted average share count was lower due to the conversion of preferred shares to common shares in May 2013, and thus the shares were not included in the weighted average calculation prior to conversion.

 

Adjusted EBITDA, a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization, and cash and other non-cash items, in accordance with the Company’s credit agreement increased 47.1% to $25.0 million from $17.0 million in the prior year’s third quarter. Please see the reconciliation of Adjusted EBITDA to net income (loss) in the tables attached to this release.

 

Fiscal Third Quarter 2014 Segment Performance

Third party sales in the Metal Coil Coating’s group increased $8.1 million, or 35.2%, over last year, driven by increased volumes out of the Middletown, OH plant as well as a beneficial shift to package sales. Total sales, including internal activity, increased $11.8 million, or 21%, compared to last year. Operating income rose 20.7% to $6.7 million from the $5.5 million reported in the third quarter of fiscal 2013.

 

The Metal Components group generated a $21.7 million increase, or 15.5%, in third party sales, primarily driven by volume growth in legacy single skin product sales. Operating income for the current quarter increased 29.6% to $10.4 million compared to $8.1 million in the same quarter in 2013. The group benefited from market growth, commercial discipline and the growth initiatives put in place over the past year to optimize sales and service levels. Orders for commercial and industrial applications of insulated metal panels began to rebound during the quarter indicating a return to a more normalized mix.

 

Third party sales in the Engineered Buildings group increased $14.6 million, or 9.5%, over the same period in 2013 primarily due to improved project mix supported by value oriented pricing. Operating income increased $5.3 million, or 87.1%, in the current quarter when compared to the prior year period. The Buildings group also benefited from improved management of freight costs and expects to realize continued margin expansion related to value pricing and manufacturing efficiencies.

 

The following table illustrates the composition of the Company’s revenue and profitability for the third quarter ended August 3, 2014 and July 28, 2013, respectively:

 

		Quarter Ended												Quarter Ended
(Revenues in millions)		August 3, 2014												July 28, 2013
Segment		Third party Revenue				% of Total Revenue				Operating Profit Margin				Third party Revenue				% of Total Revenue				Operating Profit Margin
Metal Coil Coating		$	31.1				9	%			9.8	%		$	23.0				7	%			9.8	%
Metal Components			162.2				45	%			5.7	%			140.4				44	%			5.0	%
Engineered Building Systems			168.3				46	%			6.6	%			153.8				49	%			3.9	%
Consolidated		$	361.6				100.0	%			2.9	%		$	317.2				100.0	%			1.1	%

 

 

Market commentary

The positive trend of leading indicators for nonresidential construction activity experienced in the second fiscal quarter accelerated in the third quarter. According to CBRE Econometric Advisors data, industrial vacancy rates continued to decline and the availability rate now registers at 10.8%, the lowest level since 2007. The lack of supply is expected to spur new development as sustained demand in the industrial sector continues over the next several quarters.

 

Reflecting the expansion in manufacturing for the 15th consecutive month, the Institute for Supply Management’s Purchasing Manager’s Index (PMI) registered 59% in August 2014. The New Orders Index was 66.7% in August; an increase of 3.3 percentage points from 63.4% in July 2014, indicating growth in new orders for the 15th consecutive month and signaling continued high levels of capital spending.

 

The American Institute of Architects’ (AIA) Architecture Mixed Use Index increased from 57.1 in June 2014 to 61.0 in July 2014. The Architectural Billings Index registered at 55.8 in July, up consecutively from 53.5 in June, and now at the highest reading since July 2007. The index has been above 50 for 19 of the past 24 months, signaling a continued recovery in U.S. construction spending for the remainder of 2014 and into 2015. Furthermore, the new projects inquiry index scored 66.0 in July following a strong 66.4 in June, while the new design contract index registered 55.7 in June and 54.9 in July, signaling positive momentum for near-term architectural billings.

 

The July 2014 Federal Reserve’s Senior Loan Officer Survey continues to report easing of lending standards and increased demand for commercial real estate loans. Banks have experienced a stronger demand over the past three months indicating increased loans to real nonresidential investments in commercial and industrial projects.

 

Summary/Outlook

“Our third quarter performance was largely on track with our internal expectations and demonstrates that our investments in growth initiatives and commercial discipline are beginning to pay dividends, as reflected in higher third party sales and improving margins. Increasing volumes have allowed us to leverage the improved operational efficiencies created by the recent realignment of manufacturing operations across our business units.”

 

“We are pleased with the steady improvement in our operating performance, and the leading indicators that signal growth in our end markets while realizing nonresidential end markets are still below historic cyclical trough volumes. The level of inquiries remains solid and our backlog continues to reflect a broadening recovery. We maintain our expectation that growth in new low rise nonresidential starts in fiscal 2014 will be in the mid-single digits, and I believe we will continue to build momentum that will take us into 2015,” Mr. Chambers concluded.

 

For additional information, please see the CFO Commentary at www.ncibuildingsystems.com under the tab Quarterly Earnings and Transcripts. 

 

Conference Call Information

The NCI Building Systems, Inc. third quarter conference call is scheduled for Tuesday, September 9, 2014, at 9:00 AM ET. Please dial 1-888-471-3843 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 replay, please dial 1-888-203-1112 and the passcode 5382199# when prompted. The taped replay will be available two hours after the call through September 16, 2014.

 

  

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

 

Contact:

Layne de Alvarez

Vice President, Investor Relations

281-897-7710

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "guidance," "potential," "expect," "should," "will," "forecast" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, as a result, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially include, but are not limited to industry cyclicality and seasonality and adverse weather conditions; ability to service or refinance the Company's debt and obtain future financing; the Company’s ability to comply with the financial tests and covenants in its existing and future debt obligations; operational limitations or restrictions in connection with our debt; recognition of asset impairment charges; the ability to make strategic acquisitions accretive to earnings; retention and replacement of key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; commodity price increases and/or limited availability of raw materials, including steel; increases in energy prices, competitive activity and pricing pressure; challenging economic conditions affecting the non-residential construction industry; volatility in the U.S. economy and abroad generally, and in the credit markets; costs related to environmental clean-ups and liabilities; changes in laws or regulations, including the Dodd-Frank Act; the dilutive effect on the Company’s common stockholders of potential future sales of the Company’s common stock held by the selling stockholders; substantial governance and other rights held by the selling stockholders; 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 the Company to liabilities and possible losses, which may not be covered by insurance; costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; and the volatility of the Company's stock price. The Company's SEC filings, including our most recent reports on Form 10-K, particularly under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended November 3, 2013 and in the Company’s Quarterly Report on Form 10-Q for the quarter period ending February 2, 2014, identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. NCI expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any changes in its expectations.

 

 

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

		Fiscal Three Months Ended								Fiscal Nine Months Ended
		August 3,				July 28,				August 3,				July 28,
		2014				2013				2014				2013
Sales		$	361,626			$	317,201			$	978,092			$	908,184
Cost of sales, excluding gain on insurance recovery			282,061				250,163				781,016				719,440
Gain on insurance recovery			-				-				(1,311	)			-
Gross profit			79,565				67,038				198,387				188,744
			22.0	%			21.1	%			20.3	%			20.8	%
Engineering, selling, general and administrative expenses			65,877				62,761				193,380				186,014
Strategic development costs			1,486				-				1,486				-
Income from operations			12,202				4,277				3,521				2,730
Interest income			60				29				110				101
Interest expense			(3,203	)			(5,159	)			(9,388	)			(17,624	)
Debt extinguishment costs, net			-				(21,491	)			-				(21,491	)
Other income, net			(133	)			219				(43	)			859
Income (loss) before income taxes			8,926				(22,125	)			(5,800	)			(35,425	)
Provision (benefit) from income taxes			2,837				(9,933	)			(2,726	)			(14,264	)
			31.8	%			44.9	%			47.0	%			40.3	%
Net Income (loss)		$	6,089			$	(12,192	)		$	(3,074	)		$	(21,161	)
Income (loss) per common share:
Basic		$	0.08			$	(0.19	)		$	(0.04	)		$	(0.62	)
Diluted		$	0.08			$	(0.19	)		$	(0.04	)		$	(0.62	)
Weighted average number of common shares outstanding:
Basic			72,928				64,217				73,093				34,290
Diluted			74,393				64,217				73,093				34,290
Increase in sales			14.0	%							7.7	%
Gross profit percentage			22.0	%			21.1	%			20.3	%			20.8	%
Engineering, selling, general and administrative
expenses percentage			18.2	%			19.8	%			19.8	%			20.5	%

 

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

 

		August 3,				November 3,
		2014				2013
		(Unaudited)
ASSETS
Cash and cash equivalents		$	27,664			$	77,436
Accounts receivable, net			133,532				135,368
Inventories, net			136,579				122,105
Deferred income taxes			30,803				27,736
Income tax receivable			1,601				1,112
Prepaid expenses and other			22,003				19,300
Investments in debt and equity securities, at market			5,408				4,892
Assets held for sale			5,732				2,879
Total current assets			363,322				390,828
Property, plant and equipment, net			249,493				260,918
Goodwill			75,226				75,226
Intangible assets, net			45,936				48,975
Deferred financing costs, net			3,553				4,316
Total assets		$	737,530			$	780,263
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt		$	2,384			$	2,384
Note payable			836				613
Accounts payable			115,191				144,553
Accrued compensation and benefits			46,606				40,954
Accrued interest			1,856				1,844
Other accrued expenses			62,842				61,266
			229,715				251,614
Long-term debt, net			233,599				235,391
Deferred income taxes			31,615				32,185
Other long-term liabilities			8,245				8,315
Total long-term liabilities			273,459				275,891
Common stock			1,460				1,471
Additional paid-in capital			627,563				638,574
Accumulated deficit			(385,809	)			(382,735	)
Accumulated other comprehensive loss			(4,663	)			(4,436	)
Treasury stock, at cost			(4,195	)			(116	)
Total stockholders' equity			234,356				252,758
Total liabilities and stockholders' equity		$	737,530			$	780,263

 

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

		Fiscal Nine Months Ended
		August 3,				July 28,
		2014				2013
Cash flows from operating activities:
Net loss		$	(3,074	)		$	(21,161	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			26,702				26,997
Deferred financing cost amortization			830				2,994
Share-based compensation expense			8,146				10,335
(Gain) loss on sale of property			41				(38	)
Non-cash debt extinguishment costs			-				17,582
Gain on insurance recovery			(1,311	)			-
Provision for doubtful accounts			334				1,424
Benefit from deferred income taxes			(3,109	)			(14,865	)
Excess tax benefits from share-based compensation arrangements			(549	)			-
Changes in operating assets and liabilities:
Accounts receivable			1,503				13,146
Inventories			(14,474	)			(29,186	)
Income tax receivable			(2	)			(1,859	)
Prepaid expenses and other			(1,287	)			(2,624	)
Accounts payable			(29,367	)			(5,561	)
Accrued expenses			5,529				(5,160	)
Other, net			34				(1,167	)
Net cash used in operating activities			(10,054	)			(9,143	)
Cash flows from investing activities:
Proceeds from insurance			1,311				-
Capital expenditures			(14,529	)			(17,545	)
Net cash used in investing activities			(13,218	)			(17,545	)
Cash flows from financing activities:
Proceeds from stock options exercised			-				674
Decrease in restricted cash			-				1,375
Payments on term loan			(1,792	)			(10,375	)
Payments on note payable			(1,172	)			(1,239	)
Proceeds from Amended ABL Facility			72,000				42,000
Payments on Amended ABL Facility			(72,000	)			(37,000	)
Payment of financing costs			(67	)			(6,215	)
Purchase of treasury stock			(23,791	)			(2,438	)
Excess tax benefits from share-based compensation arrangements			549				974
Net cash used in financing activities			(26,273	)			(12,244	)
Effect of exchange rate changes on cash and cash equivalents			(227	)			(77	)
Net decrease in cash and cash equivalents			(49,772	)			(39,009	)
Cash and cash equivalents at beginning of period			77,436				55,158
Cash and cash equivalents at end of period		$	27,664			$	16,149

 

 

NCI Building Systems, Inc.

Business Segments

(In thousands)

(Unaudited)

 

		Fiscal Three Months Ended								Fiscal Three Months Ended								$				%
		August 3, 2014								July 28, 2013								Inc/(Dec)				Change
						% of								% of
						Total								Total
						Sales								Sales
Sales:
Metal coil coating		$	68,324				16			$	56,478				15			$	11,846				21.0	%
Metal components			184,321				43				161,008				43				23,313				14.5	%
Engineered building systems			174,186				41				158,369				42				15,817				10.0	%
Total sales			426,831				100				375,855				100				50,976				13.6	%
Less: Intersegment sales			65,205				15				58,654				16				6,551				11.2	%
Total net sales		$	361,626				85			$	317,201				84			$	44,425				14.0	%
						% of								% of
						Sales								Sales
Operating income (loss):
Metal coil coating		$	6,665				10			$	5,521				10			$	1,144				20.7	%
Metal components			10,437				6				8,054				5				2,383				29.6	%
Engineered building systems			11,454				7				6,123				4				5,331				87.1	%
Corporate			(16,354	)			-				(15,421	)			-				(933	)			-6.1	%
Total operating income (% of sales)		$	12,202				3			$	4,277				1			$	7,925				185.3	%
		Fiscal Nine Months Ended								Fiscal Nine Months Ended								$				%
		August 3, 2014								July 28, 2013								Inc/(Dec)				Change
						% of								% of
						Total								Total
						Sales								Sales
Sales:
Metal coil coating		$	176,898				16			$	155,539				15			$	21,359				13.7	%
Metal components			497,599				43				462,075				43				35,524				7.7	%
Engineered building systems			475,834				41				454,030				42				21,804				4.8	%
Total sales			1,150,331				100				1,071,644				100				78,687				7.3	%
Intersegment sales			172,239				15				163,460				15				8,779				5.4	%
Total net sales		$	978,092				85			$	908,184				85			$	69,908				7.7	%
						% of								% of
						Sales								Sales
Operating income (loss):
Metal coil coating		$	17,053				10			$	15,818				10			$	1,235				7.8	%
Metal components			19,107				4				19,263				4				(156	)			-0.8	%
Engineered building systems			13,129				3				14,360				3				(1,231	)			-8.6	%
Corporate			(45,768	)			-				(46,711	)			-				943				2.0	%
Total operating income (% of sales)		$	3,521				-			$	2,730				-			$	791				29.0	%

 

 

NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) EXCLUDING SPECIAL CHARGES

FISCAL THREE MONTHS ENDED AUGUST 3, 2014 AND JULY 28, 2013

(In thousands)

(Unaudited)

 

		Fiscal Three Months Ended August 3, 2014
		Metal Coil Coating				Metal Components				Engineered Building Systems				Corporate				Consolidated
Operating income (loss), GAAP basis		$	6,665			$	10,437			$	11,454			$	(16,354	)		$	12,202
Strategic development costs			-				-				-				1,486				1,486
Adjusted operating income (loss) (1)		$	6,665			$	10,437			$	11,454			$	(14,868	)		$	13,688
		Fiscal Three Months Ended July 28, 2013
		Metal Coil Coating				Metal Components				Engineered Building Systems				Corporate				Consolidated
Operating income (loss), GAAP basis (2)		$	5,521			$	8,054			$	6,123			$	(15,421	)		$	4,277

 

(1)

The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure because it is instrumental in comparing the results from period to period. Adjusted operating income (loss) should not be considered in isolation or as a substitute for operating income (loss) as reported on the face of our statement of operations.

(2)

The Company did not incur any special charges during the three months ended August 3, 2014.

 

 

NCI BUILDING SYSTEMS, INC.

BUSINESS SEGMENTS

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) EXCLUDING SPECIAL CHARGES

FISCAL NINE MONTHS ENDED AUGUST 3, 2014 AND JULY 28, 2013

(In thousands)

(Unaudited)

 

		Fiscal Nine Months Ended August 3, 2014
		Metal Coil Coating				Metal Components				Engineered Building Systems				Corporate				Consolidated
Operating income (loss), GAAP basis		$	17,053			$	19,107			$	13,129			$	(45,768	)		$	3,521
Gain on insurance recovery			(1,311	)			-				-				-				(1,311	)
Secondary offering costs			-				-				-				754				754
Strategic development costs			-				-				-				1,486				1,486
Adjusted operating income (loss) (1)		$	15,742			$	19,107			$	13,129			$	(43,528	)		$	4,450
		Fiscal Nine Months Ended July 28, 2013
		Metal Coil Coating				Metal Components				Engineered Building Systems				Corporate				Consolidated
Operating income (loss), GAAP basis		$	15,818			$	19,263			$	14,360			$	(46,711	)		$	2,730

 

(1)

The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure because it is instrumental in comparing the results from period to period. Adjusted operating income (loss) should not be considered in isolation or as a substitute for operating income (loss) as reported on the face of our statement of operations.

(2)

The Company did not incur any special charges during the nine months ended August 3, 2014.

 

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,

AMORTIZATION AND OTHER NONCASH ITEMS ("ADJUSTED EBITDA")

(In thousands)

(Unaudited)

 

		4th Qtr				1st Qtr				2nd Qtr				3rd Qtr				Trailing 12 Months
		November 3,				February 2,				May 4,				August 3,				August 3,
		2013				2014				2014				2014				2014
Net income (loss)		$	8,276			$	(4,258	)		$	(4,905	)		$	6,089			$	5,202
Add:
Depreciation and amortization			9,012				8,767				8,941				8,994				35,714
Consolidated interest expense, net			3,334				3,100				3,035				3,142				12,611
Provision (benefit) for income taxes			5,410				(2,506	)			(3,057	)			2,837				2,684
Debt extinguishment costs, net			-				-				-				-				-
Gain on insurance recovery			(1,023	)			(987	)			(324	)			-				(2,334	)
Unreimbursed business interruption costs			500				-				-				-				500
Secondary offering costs			-				704				50				-				754
Strategic development costs			-												1,486				1,486
Non-cash charges:
Share-based compensation			4,565				3,179				2,563				2,404				12,711
Embedded derivative			-				-				-				-				-
Adjusted EBITDA (1)		$	30,074			$	7,999			$	6,303			$	24,952			$	69,328
		4th Qtr				1st Qtr				2nd Qtr				3rd Qtr				Trailing 12 Months
		October 28,				January 27,				April 28,				July 28,				July 28,
		2012				2013				2013				2013				2013
Net income (loss)		$	6,270			$	(3,627	)		$	(5,342	)		$	(12,192	)		$	(14,891	)
Add:
Depreciation and amortization			10,355				9,122				8,809				9,066				37,352
Consolidated interest expense, net			6,226				6,244				6,149				5,130				23,749
Provision (benefit) for income taxes			3,379				(1,825	)			(2,506	)			(9,933	)			(10,885	)
Acquisition-related costs			153				-				-				-				153
Debt extinguishment costs, net			-				-				-				21,491				21,491
Non-cash charges:
Share-based compensation			3,117				3,442				3,445				3,448				13,452
Asset impairments			13				-				-				-				13
Embedded derivative			(6	)			(5	)			(4	)			(50	)			(65	)
Adjusted EBITDA (1)		$	29,507			$	13,351			$	10,551			$	16,960			$	70,369

 

(1)

The Company's Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments and stock compensation as well as certain non-recurring charges. As such, the historical information is presented in accordance with the definition above. Concurrent with the amendment and restatement of the Term 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 non-recurring charges. The Company is disclosing Adjusted EBITDA, which is a non-GAAP measure, because it is used by management and provided to investors to provide comparability of underlying operational results.

 

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET LOSS PER DILUTED COMMON SHARE AND NET LOSS COMPARISON

(Unaudited)

 

		Fiscal Three Months Ended								Fiscal Nine Months Ended
		August 3,				July 28,				August 3,				July 28,
		2014				2013				2014				2013
Net income (loss) per diluted common share, GAAP basis		$	0.08			$	(0.19	)		$	(0.04	)		$	(0.62	)
Debt extinguishment costs, net of taxes			-				0.21				-				0.39
Gain on insurance recovery, net of taxes			-				-				(0.01	)			-
Secondary offering costs, net of taxes			-				-				0.00				-
Foreign exchange loss, net of taxes			0.00				-				0.01				-
Strategic development costs, net of taxes			0.02				-				0.01				-
Adjusted net income (loss) per diluted common share (1)		$	0.10			$	0.02			$	(0.03	)		$	(0.23	)
		Fiscal Three Months Ended								Fiscal Nine Months Ended
		August 3,				July 28,				August 3,				July 28,
		2014				2013				2014				2013
Net Income (loss) applicable to common shares, GAAP basis		$	6,089			$	(12,192	)		$	(3,074	)		$	(21,161	)
Debt extinguishment costs, net of taxes			-				13,238				-				13,238
Gain on insurance recovery, net of taxes			-				-				(808	)			-
Secondary offering costs, net of taxes			-				-				464				-
Foreign exchange loss, net of taxes			183				-				508				-
Strategic development costs, net of taxes			915				-				915				-
Adjusted net income (loss) applicable to common shares (1)		$	7,187			$	1,046			$	(1,995	)		$	(7,923	)

 

(1)

The Company discloses a tabular comparison of Adjusted net loss per diluted common share and Adjusted net loss applicable to common shares, which are non-GAAP measures, because they are referred to in the text of our press releases and are instrumental in comparing the results from period to period. Adjusted net loss per diluted common share and Adjusted net loss applicable to common shares should not be considered in isolation or as a substitute for net loss per diluted common share and net loss applicable to common shares as reported on the face of our consolidated statement of operations.

 

 

NCI Building Systems, Inc.

Reconciliation of Segment Sales to Third Party Segment Sales (Internal Information)

(In thousands)

(Unaudited)

 

		Fiscal								Fiscal												%
		3rd Qtr 2014								3rd Qtr 2013								Inc/(Dec)				Change
Metal Coil Coating
Total Sales		$	68,324				16	%		$	56,478				15	%			11,846				21.0	%
Less: Intersegment sales			37,192								33,450								3,742				11.2	%
Third Party Sales		$	31,132				9	%		$	23,028				7	%			8,104				35.2	%
Operating Income		$	6,665				21	%		$	5,521				24	%			1,144				20.7	%
Metal Components
Total Sales		$	184,321				43	%		$	161,008				43	%			23,313				14.5	%
Less: Intersegment sales			22,141								20,567								1,574				7.7	%
Third Party Sales		$	162,180				45	%		$	140,441				44	%			21,739				15.5	%
Operating Income		$	10,437				6	%		$	8,054				6	%			2,383				29.6	%
Engineered Building Systems
Total Sales		$	174,186				41	%		$	158,369				42	%			15,817				10.0	%
Less: Intersegment sales			5,872								4,637								1,235				26.6	%
Third Party Sales		$	168,314				46	%		$	153,732				49	%			14,582				9.5	%
Operating Income		$	11,454				7	%		$	6,123				4	%			5,331				87.1	%
Consolidated
Total Sales		$	426,831				100	%		$	375,855				100	%			50,976				13.6	%
Less: Intersegment			65,205								58,654								6,551				11.2	%
Third Party Sales		$	361,626				100	%		$	317,201				100	%			44,425				14.0	%
Operating Income		$	12,202				3	%		$	4,277				1	%			7,925				185.3	%
		Fiscal YTD								Fiscal YTD												%
		3rd Qtr 2014								3rd Qtr 2013								Inc/(Dec)				Change
Metal Coil Coating
Total Sales		$	176,898				16	%		$	155,539				15	%			21,359				13.7	%
Less: Intersegment sales			95,668								91,403								4,265				4.7	%
Third Party Sales		$	81,230				8	%		$	64,136				7	%			17,094				26.7	%
Operating Income		$	17,053				21	%		$	15,818				25	%			1,235				7.8	%
Metal Components
Total Sales		$	497,599				43	%		$	462,075				43	%			35,524				7.7	%
Less: Intersegment sales			60,339								55,925								4,414				7.9	%
Third Party Sales		$	437,260				45	%		$	406,150				45	%			31,110				7.7	%
Operating Income		$	19,107				4	%		$	19,263				5	%			(156	)			-0.8	%
Engineered Building Systems
Total Sales		$	475,834				41	%		$	454,030				42	%			21,804				4.8	%
Less: Intersegment sales			16,232								16,132								100				0.6	%
Third Party Sales		$	459,602				47	%		$	437,898				48	%			21,704				5.0	%
Operating Income		$	13,129				3	%		$	14,360				3	%			(1,231	)			-8.6	%
Consolidated
Total Sales		$	1,150,331				100	%		$	1,071,644				100	%			78,687				7.3	%
Less: Intersegment sales			172,239								163,460								8,779				5.4	%
Third Party Sales		$	978,092				100	%		$	908,184				100	%			69,908				7.7	%
Operating Income		$	3,521				0	%		$	2,730				0	%			791				29.0	%