Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Cornerstone Building Brands, Inc. | ncs201712078-k.htm |
| EX-99.1 - EXHIBIT 99.1 - Cornerstone Building Brands, Inc. | q42017exhibit991.htm |
Our Mission & Vision
Q4 and Full Year 2017
Supplemental Presentation
December 6, 2017
Our Mission & Vision
Forward-looking Statements
2
Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “plan,” “intend,” “foresee,” “guidance,” “potential,” “expect,”
“should,” “will” “continue,” “could,” “estimate,” “forecast,” “goal,” “may,” “objective,” “predict,” “projection,” or similar expressions are
intended to identify forward-looking statements (including those contained in certain visual depictions) in this presentation. These
forward-looking statements reflect the Company's current expectations and/or beliefs concerning future events. The Company believes
the information, estimates, forecasts and assumptions on which these statements are based are current, reasonable and complete. Our
expectations with respect to the first quarter of fiscal 2018 and longer-term cost savings initiatives and efficiencies that are contained in
this presentation are forward looking statements based on management’s best estimates, as of the date of this presentation. These
estimates are unaudited, and reflect management’s current views with respect to future results. However, the forward-looking
statements in this presentation 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; 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 or
refinance our existing debt, including the 8.25% senior notes due 2023, 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 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 Company's stock price; dilutive effect on
the Company's common stockholders of potential 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.
Our Mission & Vision
4Q 2017 Financial Overview (Page 1 of 2)
3
Sales were $488.7 million, an increase of $8.4 million or 1.8% from $480.3 million in
the prior year’s fourth quarter
• Revenues for the quarter benefited from commercial pricing discipline in the pass-through of
higher material costs
• Year-over-year, tonnage volumes were significantly lower in the Buildings segment, largely
resulting from the impact of hurricane related disruptions, customers access to job sites and
transportation delays
Gross profit margins for the period were 23.8%, compared to 25.2% in the prior year’s
period
• Compared to the year ago period, margins were impacted by hurricane disruptions and
declined by 140 basis points as a result of lower volumes in the Buildings segment, uneven
production flow and increased transportation costs
ESG&A Costs decreased to $72.7 million (14.9% of sales) from $77.6 million (16.2% of
sales) aided by ongoing cost reduction programs, integration activities and lower
incentive compensation costs
Operating income was $33.3 million, down from $39.4 million in the prior year period
Our Mission & Vision
4
4Q 2017 Financial Overview (Page 2 of 2)
Adjusted Operating Income(1) was $41.3 million, up from $40.9 million
Net income applicable to common shares was $17.4 million, or $0.25 per diluted
common share this quarter compared to $18.9 million, or $0.27 per diluted
common share in the fourth quarter of fiscal 2016. On an adjusted basis(1), diluted
earnings were $0.32 per share this quarter compared to $0.28 in the prior year
period
Adjusted EBITDA (1) was $53.9 million compared to $53.7 million in the prior year
period
Consolidated backlog grew 5.8% year-over-year to $545.6 million
The Company estimated that the hurricanes impacted revenues by approximately
$16.0 million, gross profits by $8.3 million and Adjusted EBITDA by $8.5 million
during the period
(1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
Our Mission & Vision
Full Year 2017 Financial Overview
5
Sales were $1.77 billion, an increase of $85.4 million or 5.1% from $1.68 billion a
year ago
• External tonnage volumes decreased 1.8% year-over-year, with lower volumes effecting
the Buildings segment in particular
Gross profits declined on a year-over-year basis to $416.1 million from $427.9
million a year ago
• Gross profit margins declined by 190 basis points from 23.5% in the comparable prior year
period to 25.4%
Operating income was $109.8 million compared to $108.8 million in the prior year
period.
• Adjusted for special items, operating income was $113.9 million compared to $114.1
million in the prior year period(1)
Net income applicable to common shares increased 7.4% to $54.4 million, or $0.77
per diluted common share compared to $50.6 million, or $ 0.70 per diluted common
share in the prior year period
Adjusted EBITDA(1) grew 0.8% to $167.5 million from $166.1 million in the prior year
period
(1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
Our Mission & Vision
6
Commercial
• Backlog in the Buildings segment at the end of the quarter increased 8.0% to
$360.1 million
• The Buildings and Components legacy distribution channels continue to
expand their product offerings, leveraging products from the other business
lines and recognizing the following revenue growth
o IMP intersegment sales increased 16% year-over-year
o Door intersegment sales increased 33% year-over-year
Steel Costs
• Steel costs continue to be elevated by various trade cases and the current
regulatory environment
• In the months preceding the fourth quarter and leading into fiscal 2018, steel
costs have shown less dramatic increases, as compared to the year ago period
• Slower activity, partially driven by the hurricanes, negatively impacted the flow
through of higher priced inventory layers into the fourth quarter
4Q 2017 Operational Overview
Our Mission & Vision
4Q 2017 Segment Overview (1)
7
Engineered Building Systems
• Revenue declined to $188.2 million from $204.2 million in the prior year period, resulting
from significantly lower volumes largely driven by the hurricane related disruptions
• Operating margin declines relate to lower plant utilization and uneven production flow
combined with increased transportation costs
Metal Components
• Revenue grew 8.3% to $316.7 million primarily resulting from continued growth in insulated
metal panels (“IMP”) and overhead doors through internal distribution channels
• During the quarter, IMP represented approximately 26% of Consolidated Revenues and
44% of Consolidated Adjusted EBITDA
• Legacy components volumes rebounded from a weak third quarter and drove better
manufacturing capacity utilization
Metal Coil Coating
• Revenues increased 5.4% to $73.0 million as a result of higher volumes for internal
customers
• Margins were compressed as a result of changing business mix and increases in the IMP
coating requirements that drove shorter productions runs at the coating facilities
(1) Segment revenue includes intersegment sales
Our Mission & Vision
173.9
135.3
113.3
173.8
145.0
180.6
167.2
172.3
170.3
100
110
120
130
140
150
160
170
180
190
Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17
Steel Price (CRU North American Index)
CRU
Steel Price Movements 2015 – 2017
8 Source: CRU Group
The graph above shows the monthly CRU Index data for the North American Steel Price Index. The
CRU North American Steel Price Index has been published by the CRU Group since 1994 and the
Company believes this index appropriately depicts the volatility it has experienced in steel prices. The
index is based on a CRU survey of industry participants of purchases for forward delivery, according to
mill lead time, which will vary. For example, the January index would likely approximate the Company’s
March steel purchase deliveries based on current lead-times and be representative of the steel costs
that would be recognized in April. The volatility in this steel price index is comparable to the volatility the
Company experiences in its average cost of steel.
FY 2015 FY 2016 FY 2017
Our Mission & Vision
4Q 2017 Financial Summary
9 (1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
(Dollars in millions, except per share amounts)
October
29, 2017
October
30, 2016 % Chg.
October
29, 2017
October
30, 2016 % Chg.
Sales 488.7$ 480.3$ 1.8% 1,770.3$ 1,684.9$ 5.1%
Gross Profit 116.3$ 120.8$ -3.8% 416.1$ 427.9$ -2.8%
Gross Profit Margin 23.8% 25.2% -5.6% 23.5% 25.4% -7.5%
Income from Operations 33.3$ 39.4$ -15.4% 109.8$ 108.8$ 0.9%
Net Income 17.5$ 19.0$ -8.0% 54.7$ 51.0$ 7.2%
Diluted EPS 0.25$ 0.27$ -7.4% 0.77$ 0.70$ 10.0%
Adjusted Operating Income
1
41.3$ 40.9$ 1.0% 113.9$ 114.1$ -0.1%
Adjusted EBITDA
1
53.9$ 53.7$ 0.5% 167.5$ 166.1$ 0.8%
Adjusted Diluted EPS
1
0.32$ 0.28$ 14.3% 0.80$ 0.71$ 12.7%
Fiscal Three Months Ended Fiscal Year Ended
Our Mission & Vision
10
4Q 2017 Revenues and Volumes – by Segment
4Q-'17 4Q-'16 % Chg.
% Vol.
Chg.
1
4Q-'17 4Q-'16 % Chg.
% Vol.
Chg.
1
4Q-'17 4Q-'16 % Chg.
% Vol.
Chg.
1
Third-Party 29.2$ 28.6$ 2.2% -9.6% Third-Party 281.3$ 255.1$ 10.3% 0.9% Third-Party 178.2$ 196.6$ -9.3% -14.2%
Internal 43.8 40.7 7.6% 7.7% Internal 35.5 37.3 -5.0% -16.2% Internal 10.0 7.6 30.9% 34.1%
Total Sales 73.0$ 69.3$ 5.4% -0.8% Total Sales 316.7$ 292.4$ 8.3% -1.9% Total Sales 188.2$ 204.2$ -7.8% -11.5%
Metal Coil Coating Metal Components Engineered Building Systems
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
4Q-'17 4Q-'16
Metal Coil Coating
Third-Party Internal
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
4Q-'17 4Q-'16
Metal Components
Third-Party Internal
$-
$50.0
$100.0
$150.0
$200.0
$250.0
4Q-'17 4Q-'16
Engineered Building Systems
Third-Party Internal
Metal Coil
Coating
6%
Metal
Components
58%
Consolidated 3rd Party Revenue
4Q 2017
Metal Coil
Coating
6%
Metal
Components
53%
Consolidated 3rd Party Revenue
4Q 2016
($ in millions)
Engineered Building
Systems
36%
Engineered Building
Systems
41%
(1) Calculated as the year-over-year change in the tonnage volumes shipped
Our Mission & Vision
4Q 2017 Business Segment Results
11
(Dollars in millions)
$29.2
$281.3
$178.2
$488.7
$28.6
$255.1
$196.6
$480.3
Coatings Components Buildings Consolidated
(1) Reconciliation of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
Third Party Revenue
$6.6
[VALUE]
$13.0
$33.3
$7.0
$31.1
$22.8
$39.4
Coatings Components Buildings Consolidated
Operating Income
Adjusted Operating Income1
$7.8
$47.1
$15.2
$53.9
$8.2
$37.8
$25.1
$53.7
Coatings Components Buildings Consolidated
2017
2016
Adjusted EBITDA(1)
$6.6
$39.7
$13.7
$41.3
$7.0
$31.6
$23.1
$40.9
Coatings Components Buildings Consolidated
Our Mission & Vision
Full Year 2017 Business Segment Results
12
(Dollars in millions)
$112.1
$998.3
$659.9
$1,770.3
$106.6
$925.9
$652.5
$1,684.9
Coatings Components Buildings Consolidated
(1) Reconciliation of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
Third Party Revenue
$23.9
$124.2
$41.4
$109.8
$25.3
$102.5
$62.0
$108.8
Coatings Components Buildings Consolidated
Operating Income
Adjusted Operating Income1
$28.7
$149.7
$54.7
$167.5
$30.0
$131.1
$70.0
$166.1
Coatings Components Buildings Consolidated
2017
2016
Adjusted EBITDA(1)
$23.9
$122.3
$45.3
$113.9
$25.3
$104.6
$61.4
$114.1
Coatings Components Buildings Consolidated
Our Mission & Vision
Gross Margin Reconciliation
13
Gross Margin 4Q 2016 25.2%
Net impact of higher material and transportation costs (1.70%)
Impact of hurricanes (0.90%)
Favorable product and segment mix, net 0.60%
Manufacturing and process efficiency improvements 0.70%
Other (0.10%)
Gross Margin 4Q 2017 23.8%
For the quarter, gross profit was $116.3 million compared to $120.8 million in the
fourth quarter of fiscal 2016. The Company estimates that the hurricanes
impacted gross profit by approximately $8.3 million during the period
The favorable product and segment mix was predominately in IMP sales and the
relative weighting of the three business segments
Note: Basis point attributions in the above tables are approximate
Our Mission & Vision
Key Cost Initiatives
14
($ in millions)
Original
Target (1)
2016 Cost
Savings
Realized
2017 Cost
Savings
Targets
2017 Cost
Savings
Realized
Manufacturing Consolidation $15.0 - $20.0 $6.0 $6.5 $7.6
ESG&A Restructuring $15.0 - $20.0 $6.0 $3.5 $3.8
Total $30.0 - $40.0 $12.0 $10.0 $11.4
The Manufacturing cost initiative includes the continuing rationalization of manufacturing
facilities and relocation of equipment and machinery
The ESG&A initiative includes the elimination of certain fixed and indirect costs through
restructuring and consolidation
During 4Q, the Company accelerated part of the ESG&A cost initiative originally planned
for 2018, which resulted in $8.5 million of additional costs savings that will be reflected in
2018
Through fiscal 2017, the Company has realized cost reductions of approximately $23.4
million, with an annualized run rate of $31.9 million
Going forward, any remaining targeted items from the Original Targets have been
included in the Company’s initiatives for 2018 and beyond. By the end of 2020, the
Company is targeting $40 - $50 million in cost savings reductions and efficiencies
(1) Key initiatives are anticipated to generate the target amount of savings by fiscal year-end 2018 and do not include the impact of inflation
Our Mission & Vision
15
Net Income:
Net income was $17.5 million compared to $19.0 million in the prior year’s fourth quarter
Adjusted EBITDA(1):
(Dollars in millions)
4Q Net Income and Adjusted EBITDA
(1) Reconciliations of non-GAAP financial measures to the nearest GAAP measure are included in the Company’s financial tables beginning on Slide 19
$53.7 $53.9
$(2.1)
$5.0
$(8.5)
$6.1
$(0.3)
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
Adjusted EBITDA 4Q
2016
Volume Product Mix and
Margin Expansion
Hurricanes ESG&A Cost
Reductions and
Lower Incentive
Compensation
Other Adjusted EBITDA 4Q
2017
Our Mission & Vision
4Q 2017 Cash Flow Summary
16
Cash and Cash Equivalents, as of 4Q 2017 3Q 2017 2Q 2017 1Q 2017
Beginning balance $ 45,923 $ 49,682 $ 15,789 $ 65,403
Cash provided by (used in) operating activities 63,277 (7,294) 38,254 (31,878)
Cash provided by (used in) investing activities (5,781) 4,100 (4,483) (4,120)
Cash provided by (used) in financing activities (37,622) (961) 271 (13,702)
Exchange rate effects (139) 396 (149) 86
Ending balance $ 65,658 $ 45,923 $ 49,682 $ 15,789
Stock Repurchases
• During the quarter, the Company utilized $37.6 million to repurchase 2.6 million shares at an
average share price of $14.73
• For fiscal 2017, the company utilized $41.2 million to repurchase 2.8 million shares at an
average share price of $14.68
• The Company announced a new $50.0 million share repurchase plan in October 2017. During
fiscal 2017, shares were not repurchased under the new plan
• From the end of fiscal 2017 through December 1, 2017, the Company repurchased 1.5 million shares at
an average price per share of $15.98 using $24.4 million
(Dollars in thousands)
Our Mission & Vision
4Q 2017 Results Compared to Guidance
17
($ in millions)
Range
Low High 4Q Actuals
Revenues $470.0 $500.0 $488.7
Gross Profit Margin 24.3% 26.3% 23.8%
ESG&A Expenses $77.0 $80.0 $72.7
Intangible Asset Amortization $2.3 $2.5 $2.4
Total Depreciation & Amortization
(inclusive of Intangible amortization above)
$10.0 $11.0 $10.7
Interest Expense $7.1 $7.5 $7.2
Effective Tax Rate 34.0% 37.0% 33.2%
Adjusted EBITDA $48.0 $62.0 $53.9
Revenues for the quarter reflect significantly lower tonnage volumes in the Buildings
segment as a result of hurricane related disruptions
Gross profit margins were lower in the quarter primarily as a result of lower volumes, uneven
production flow and escalating transportation costs
Lower ESG&A results reflect the impact of ongoing cost initiatives and lower incentive
compensation costs
The Company estimated that the hurricanes impacted revenues by approximately $16.0
million, gross profits by $8.3 million and Adjusted EBITDA by $8.5 million during the period
Our Mission & Vision
1Q 2018 Guidance (1)
18
($ in million)
1Q Range
Low High
Revenues $390.0 $410.0
Gross Profit Margin 21.5% 23.5%
ESG&A Expenses $70.0 $74.0
Intangible Asset Amortization $2.3 $2.5
Total Depreciation & Amortization
(inclusive of Intangible Asset Amortization above)
$10.0 $11.0
Interest Expense $7.0 $7.4
Effective Tax Rate(2) 34.0% 37.0%
Adjusted EBITDA $24.0 $34.0
Guidance for ESG&A excludes the amortization of intangible assets, which is shown as a separate
line item above
Total Depreciation & Amortization includes the intangible amortization and is reported on the
Company’s Statements of Operations within Cost of Goods Sold, ESG&A Expense and Intangible
Asset Amortization
Weighted average diluted common shares is expected to be 67.6 million for 1Q 2018
Total capital expenditures for fiscal 2018 are expected to be in the range of $45.0 million to $55.0
million
(1) See “Forward Looking Statements” on Slide 2
(2) This effective tax rate does not consider the potential enactment of changes to the tax laws currently being considered by Congress
Our Mission & Vision
Reconciliation of Net Income (Loss) and Adjusted Net Income (Loss) per
Diluted Common Share
19
(Dollars in thousands, except per share amounts)
October 29, October 30, October 29, October 30,
2017 2016 2017 2016
Net income per diluted common share, GAAP basis 0.25$ 0.27$ 0.77$ 0.70$
Goodwill impairment 0.09 - 0.08 -
Restructuring and impairment charges 0.02 0.01 0.07 0.06
Strategic development and acquisition related costs 0.00 0.01 0.03 0.04
(Gain) on insurance recovery - - (0.14) -
Unreimbursed business interruption costs 0.00 - 0.01 -
Other losses (gains), net - 0.00 0.00 (0.06)
Tax effect of applicable non-GAAP adjustments
(1)
(0.04) (0.01) (0.02) (0.03)
Adjusted net income per diluted common share
(2)
0.32$ 0.28$ 0.80$ 0.71$
October 29, October 30, October 29, October 30,
2017 2016 2017 2016
Net income applicable to common shares, GAAP basis 17,412$ 18,896$ 54,399$ 50,638$
Goodwill impairment 6,000 - 6,000 -
Restructuring and impairment charges 1,710 815 5,297 4,252
Strategic development and acquisition related costs 193 590 1,971 2,670
(Gain) on insurance recovery - - (9,749) -
Unreimbursed business interruption costs 28 - 454 -
Other losses (gains), net - 62 137 (3,506)
Tax effect of applicable non-GAAP adjustments
(1)
(3,093) (572) (1,603) (2,059)
Adjusted net income applicable to common shares
(2)
22,250$ 19,791$ 56,906$ 51,995$
#DIV/0! #DIV/0!
(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.
Fiscal Three Months Ended Fiscal Year Ended
Fiscal Three Months Ended Fiscal Year Ended
Our Mission & Vision
Reconciliation of 4Q 2017 Operating Income(Loss) to Adjusted
Operating Income (Loss) by Segment
20
(Dollars in thousands)
Engineered
Building
Systems
Metal
Components
Metal Coil
Coating Corporate Consolidated
Operating income (loss), GAAP basis 13,043$ 32,818$ 6,615$ (19,150)$ 33,326$
Goodwill impairment - 6,000 - - 6,000
Restructuring and impairment charges 695 753 - 262 1,710
Strategic development and acquisition related costs - 90 - 103 193
Unreimbursed business interruption costs - 28 - - 28
Adjusted operating income (loss)
(1)
13,738$ 39,689$ 6,615$ (18,785)$ 41,257$
Engineered
Building
Systems
Metal
Components
Metal Coil
Coating Corporate Consolidated
Operating income (loss), GAAP basis 22,830$ 31,059$ 7,018$ (21,515)$ 39,392$
Restructuring and impairment charges 211 506 - 98 815
Strategic development and acquisition related costs - - - 590 590
Loss on sale of assets and asset recovery 62 - - - 62
Adjusted operating income (loss)
(1)
23,103$ 31,565$ 7,018$ (20,827)$ 40,859$
(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.
Fiscal Three Months Ended October 30, 2016
Fiscal Three Months Ended October 29, 2017
Our Mission & Vision
Reconciliation of 2017 Operating Income(Loss) to Adjusted Operating
Income (Loss) by Segment
21
(Dollars in thousands)
Engineered
Building
Systems
Metal
Components
Metal Coil
Coating Corporate Consolidated
Operating income (loss), GAAP basis 41,388$ 124,224$ 23,935$ (79,767)$ 109,780$
Goodwill impairment - 6,000 - - 6,000
Restructuring and impairment charges 3,732 1,254 - 311 5,297
Strategic development and acquisition related costs - 90 - 1,881 1,971
Loss on sale of assets and assets recovery 137 - - - 137
(Gain) on insurance recovery - (9,749) - - (9,749)
Unreimbursed business interruption costs - 454 - - 454
Adjusted operating income (loss)
(1)
45,257$ 122,273$ 23,935$ (77,575)$ 113,890$
Engineered
Building
Systems
Metal
Components
Metal Coil
Coating Corporate Consolidated
Operating income (loss), GAAP basis 62,046$ 102,495$ 25,289$ (81,051)$ 108,779$
Restructuring and impairment charges 966 1,661 39 1,586 4,252
Strategic development and acquisition related costs - 403 - 2,267 2,670
(Gain) on sale of assets and asset recovery (1,642) - - - (1,642)
Adjusted operating income (loss)
(1)
61,370$ 104,559$ 25,328$ (77,198)$ 114,059$
(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.
Fiscal Year Ended October 29, 2017
Fiscal Year Ended October 30, 2016
Our Mission & Vision
Reconciliation of 4Q 2017 Net Income (Loss) to Adjusted EBITDA by
Segment
22
(Dollars in thousands)
Engineered
Building Metal Metal Coil
Systems Components Coating Corporate Consolidated
Net income (loss) 11,174$ 33,312$ 6,615$ (33,611)$ 17,490$
Add:
Depreciation and amortization 2,197 7,014 1,214 238 10,663
Consolidated interest expense, net (23) (53) - 7,162 7,086
Provision for income taxes 1,197 - - 7,491 8,688
Restructuring and impairment charges 695 753 - 261 1,709
Strategic development and acquisition related costs - 90 - 103 193
Share-based compensation - - - 2,084 2,084
Goodwill impairment - 6,000 - - 6,000
Unreimbursed business interruption costs - 28 - - 28
Adjusted EBITDA
(1)
15,240$ 47,144$ 7,829$ (16,272)$ 53,941$
Engineered
Building Metal Metal Coil
Systems Components Coating Corporate Consolidated
Net income (loss) 24,738$ 31,309$ 7,018$ (44,064)$ 19,001$
Add:
Depreciation and amortization 2,399 5,979 1,202 237 9,817
Consolidated interest expense, net 7 (14) - 7,554 7,548
Provision for income taxes (2,276) 7 - 14,918 12,649
Restructuring and impairment charges 211 506 - 98 815
Strategic development and acquisition related costs - - - 590 590
Share-based compensation - - - 3,181 3,181
(Gain) loss on sale of assets and asset recovery 62 - - - 62
Adjusted EBITDA
(1)
25,141$ 37,787$ 8,220$ (17,485)$ 53,663$
Fiscal Three Months Ended October 29, 2017
Fiscal Three Months Ended October 30, 2016
Our Mission & Vision
Reconciliation of 2017 Net Income (Loss) to Adjusted EBITDA by
Segment
23
(Dollars in thousands)
Engineered
Building Metal Metal Coil
Systems Components Coating Corporate Consolidated
Net income (loss) 40,257$ 125,134$ 23,965$ (134,632)$ 54,724$
Add:
Depreciation and amortization 9,014 26,717 4,757 830 41,318
Consolidated interest expense, net (21) (170) 1 28,851 28,661
Provision for income taxes 1,583 - - 26,831 28,414
Restructuring and impairment charges 3,732 1,254 - 311 5,297
Strategic development and acquisition related costs - 90 - 1,881 1,971
Share-based compensation - - - 10,230 10,230
Goodwill impairment - 6,000 - - 6,000
Loss on sale of assets and asset recovery 137 - - - 137
(Gain) on insurance recovery - (9,749) - - (9,749)
Unreimbursed business interruption costs - 454 - - 454
Adjusted EBITDA
(1)
54,702$ 149,730$ 28,723$ (65,698)$ 167,457$
Engineered
Building Metal Metal Coil
Systems Components Coating Corporate Consolidated
Net income (loss) 59,266$ 104,543$ 25,276$ (138,057)$ 51,028$
Add:
Depreciation and amortization 9,767 26,416 4,674 1,067 41,924
Consolidated interest expense, net (73) (43) 15 30,973 30,872
Provision for income taxes 1,749 9 - 26,180 27,938
Restructuring and impairment charges 966 1,661 39 1,586 4,252
(Gain) from bargain purchase - (1,864) - - (1,864)
Strategic development and acquisition related costs - 403 - 2,266 2,669
Share-based compensation - - - 10,892 10,892
(Gain) loss on sale of assets and asset recovery (1,642) - - - (1,642)
Adjusted EBITDA
(1)
70,033$ 131,125$ 30,004$ (65,093)$ 166,069$
(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 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.
Fiscal Year Ended October 29, 2017
Fiscal Year Ended October 30, 2016
Our Mission & Vision
K. DARCEY MATTHEWS
Vice President, Investor Relations
E: darcey.matthews@ncigroup.com
281.897.7785
ncibuildingsystems.com