NCI Building Systems Reports Fourth Quarter and 2018 Fiscal Year End Results

CARY, N.C., Dec. 19, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for the fourth fiscal quarter and fiscal year ended October 28, 2018.

Fourth Quarter Fiscal 2018 Financial and Operational Highlights:  

  • Sales rose 17.4% to $573.6 million for the quarter, compared to $488.7 million in the prior year's fourth quarter
  • Gross profit was $133.3 million or 23.2% of sales for the quarter, compared to $116.3 million or 23.8% of sales, in the prior year's fourth quarter
  • Net income was $27.6 million for the quarter, compared to $17.5 million in the prior year's fourth quarter. Adjusted Net Income was $36.4 million this quarter, compared to $22.3 million in the prior year's fourth quarter
  • Net income per diluted common share for the quarter was $0.41, compared to $0.25 in the prior year's fourth quarter. Adjusted Net Income was $0.55 per diluted common share, compared to $0.32 in the prior year's fourth quarter
  • Adjusted EBITDA increased 22.0% to $65.8 million, or 11.5% of sales, for the quarter, compared to Adjusted EBITDA of $53.9 million, or 11.0% of sales, in the prior year's fourth quarter
  • Total consolidated backlog increased to $557.0 million as of October 28, 2018, up 2.1% year-over-year

Commenting on the quarter, Donald R. Riley, Chief Executive Officer of the NCI Business Unit, said, "We are pleased with our fourth quarter performance that demonstrated our successful focus on commercial discipline and operational excellence across all of our segments. We remain committed to our key initiatives in advanced manufacturing, continuous improvement and product adjacency, which remain on track and, once implemented, are expected to drive further benefits to the organization in 2019 and beyond."

"During the quarter, NCI continued to demonstrate improved operating performance serving as a testament to the hard work that Don and the NCI employees have done to deliver on their key initiatives," said the Company's Chairman and Chief Executive Officer James S. Metcalf.  "Following the merger of Ply Gem into NCI, we are excited about the expansive set of building solutions we are able to offer our residential, commercial and repair & remodel customers and the broader opportunities ahead of the new organization. As we enter 2019, we are focused on the execution of the combined Company's strategy which includes cost initiatives and de-levering the capital structure, while investing in growth initiatives."

Fourth Quarter Fiscal 2018 Results

Sales in the fourth quarter of fiscal 2018 increased to $573.6 million, up 17.4%, from $488.7 million in last year's fourth 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 Building Systems and Insulated Metal Panels ("IMP") segments.   

Gross profit increased 14.6% to $133.3 million in the quarter, compared to $116.3 million in the fourth quarter of fiscal 2017. Gross profit margins were 23.2% for the fourth quarter of fiscal 2018, compared to 23.8% in the fourth quarter of fiscal 2017. Gross margins in the fourth quarter were lower than the fourth quarter of the prior fiscal year primarily as a result of lower manufacturing utilization due to weather, predominately in the Metal Components segment and product mix in the IMP segment.  

Engineering, selling, general and administrative ("ESG&A") expenses were $78.9 million for the fourth quarter, compared to $72.7 million in the prior year's fourth fiscal quarter. The year-over-year increase in ESG&A expenses is primarily in support of increased sales volumes and wage inflation during the period. As a percentage of sales, ESG&A expenses were down 110 basis point to 13.8% in the fiscal 2018 fourth quarter, compared to 14.9% in the prior year's fourth fiscal quarter as a result of the Company's ongoing cost reduction initiatives.

Operating income for the quarter was $39.6 million, compared to $33.3 million in the fourth quarter of fiscal 2017. Adjusted Operating Income, a non-GAAP financial measure which excludes certain special items, increased 26.0% to $52.0 million in the fourth quarter of fiscal 2018, compared to $41.3 million in the same period of fiscal 2017.

Net income applicable to common shares in the fourth quarter was $27.4 million, or $0.41 per diluted common share, compared to net income of $17.4 million, or $0.25 per diluted common share in the prior fiscal year's fourth quarter. Net income was impacted by the following special items: an $11.7 million charge related to strategic development and acquisition related costs and $0.8 million of restructuring and impairment charges, partially offset by $3.4 million associated tax effect of these items. Excluding the impact of these special items, Adjusted Net Income, a non-GAAP measure, was $36.4 million, or $0.55 per diluted common share in the fourth quarter of fiscal 2018, compared to $22.3 million, or $0.32 per diluted common share, in the prior fiscal year's fourth 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 $65.8 million this quarter, compared to $53.9 million in the prior fiscal year's fourth 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 fourth quarter of fiscal 2018 were $54.3 million, compared to $65.7 million at the end of the fourth quarter of fiscal 2017. Cash and cash equivalents increased sequentially by $11.0 million from $43.3 million at the end of the third quarter of fiscal 2018 due to seasonal working capital management and profitability. NCI's net debt leverage ratio (net debt/Adjusted EBITDA) at the end of the fourth quarter of fiscal 2018 was 1.8x. As of October 28, 2018, the Company's $150.0 million asset-based lending (ABL) facility remained undrawn. See "Recent Developments" for a discussion of the Company's debt facilities following the Merger (as defined below).

Fourth Quarter Fiscal 2018 Segment Performance

Sales in the Engineered Building Systems segment were $244.0 million in the fourth quarter of fiscal 2018, compared to $188.2 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 90.6% to $24.9 million this quarter, compared to $13.0 million in the prior fiscal year's fourth quarter. Adjusted Operating Income, a non-GAAP measure, increased 83.8% to $25.3 million this quarter, compared to $13.7 million in the fourth quarter of fiscal 2017. Operating margins increased as a result of reduced ESG&A costs.

The Metal Components segment generated $187.6 million in sales during the quarter, an increase of 3.5% from $181.3 million in the prior fiscal year's fourth quarter, led by the disciplined pass-through of increasing input costs. Operating income was $19.7 million in the fourth quarter of fiscal 2018, compared to $23.1 million in the same period last year. Adjusted Operating Income was $19.7 million in the quarter, compared to $23.2 million in the prior fiscal year's fourth quarter. The Metal Components segment's operating margins decreased as a result of lower operating leverage on external volumes due to the extreme wet weather in the significant areas of the Southeast and Texas.

The IMP segment generated $146.5 million in sales during the quarter, an increase of 18.6% from $123.5 million in the prior fiscal year's fourth quarter, as a result of higher external volumes and commercial discipline, offset by the impact of the segment's product mix. Operating income was $21.0 million for the quarter, compared to $14.9 million in the fourth quarter of fiscal 2017. Adjusted Operating Income was $21.4 million during the fourth quarter of fiscal 2018, compared to $15.7 million in the same period last fiscal year. The IMP segment's operating margins increased from the prior year primarily as a result of better leverage on higher volumes.

Sales in the Metal Coil Coating segment were $117.3 million during the fourth quarter of fiscal 2018, an increase of 19.0% from $98.6 million in the prior year's fourth quarter, as a result of the pass-through of rising material costs and higher internal revenues. Operating income was $7.0 million in the fourth fiscal quarter of 2018, compared to $1.4 million in the same period last year. Adjusted Operating Income was $7.0 million in the fourth quarter of fiscal 2018, compared to $7.4 million in the prior fiscal year's fourth quarter. Adjusted operating margins in the Metal Coil Coating segment decreased as a result of lower external volumes and product mix.

Recent Developments

As previously announced, at a Special Meeting of shareholders of NCI held on November 15, 2018, NCI's shareholders approved, in relevant part, (i) the Agreement and Plan of Merger (the "Merger Agreement") among NCI, Ply Gem Parent, 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 ("CD&R"), pursuant to which, at the closing of the merger, Ply Gem, a leading manufacturer of exterior building products for residential construction, was merged with and into the Company, with the Company continuing its existence as a corporation organized under the laws of the State of Delaware (the "Merger") and (ii) the issuance in the Merger of 58,709,067 shares of NCI common stock, par value $0.01 per share (the "NCI Common Stock") in the aggregate, on a pro rata basis, to the holders of all of the equity interests in Ply Gem. The Merger was consummated on November 16, 2018.

NCI shareholders retained 53% ownership of the issued and outstanding NCI Common Stock, with Ply Gem shareholders now owning 47%. Investment funds associated with CD&R now own approximately 49% of the issued and outstanding NCI Common Stock.

On November 16, 2018, in connection with the consummation of the Merger, the Company assumed (i) the obligations of the company formerly known as Ply Gem Midco, Inc. ("Ply Gem Midco"), a subsidiary of Ply Gem immediately prior to the consummation of the Merger, as borrower under its Cash Flow Credit Agreement, (ii) the obligations of Ply Gem Midco as parent borrower under its ABL Credit Agreement and (iii) the obligations of Ply Gem Midco as issuer under its Indenture governing the 8.00% Senior Notes due 2026.

On November 16, 2018, in connection with the incurrence by Ply Gem Midco of incremental term loans and the obtaining by Ply Gem Midco of incremental ABL commitments, following consummation of the Merger, the Company (a) terminated all outstanding commitments and repaid all outstanding amounts under the Term Loan Credit Agreement, dated as of February 8, 2018 (the "Pre-Merger Term Loan Credit Agreement"), by and among the Company, as borrower, the several banks and other financial institutions from time to time party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, and (b) terminated all outstanding commitments and repaid all outstanding amounts under the ABL Credit Agreement, dated as of February 8, 2018 (the "Pre-Merger ABL Credit Agreement"), by and among NCI Group, Inc. and Robertson-Ceco II Corporation, as borrowers, the Company, as a guarantor, the other borrowers from time to time party thereto, the several banks and other financial institutions from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent and collateral agent. Outstanding letters of credit under the Pre-merger ABL Credit Agreement were cash collateralized.

Financial Reporting

On November 16, 2018, NCI's board of directors approved a change to the Company's fiscal year from a 52/53 week year with the Company's fiscal year end on the Sunday closest to October 31 to a fiscal year of the 12 month period of January 1 to December 31 of each calendar year, to commence with the fiscal year ending December 31, 2019. Consolidated results for the transition period from October 29, 2018 through December 31, 2018, which will include the results of Ply Gem beginning November 16, 2018, will be reported in February 2019.

Ply Gem Third Quarter 2018 Financial Results

On December 19, 2018, the Company filed an amendment to its current report on Form 8-K, which included, in relevant part, the unaudited financial statements for Ply Gem Midco and its subsidiaries for the quarterly period ended September 29, 2018.  On a consolidated basis, Ply Gem's net sales increased $119.7 million or 21.2% during the three months ended September 29, 2018 compared to the three months ended September 30, 2017.  The increase in net sales was largely due to the merger of Atrium Corporation ("Atrium") with Ply Gem Holdings Inc. on April 12, 2018 (the "Ply-Gem-Atrium Merger"), which increased net sales by $105.0 million for the third quarter of 2018. Ply Gem's gross profit increased $36.1 million or 27.3% during the three months ended September 29, 2018 relative to the three months ended September 30, 2017. The increase in gross profit was also largely due to the Ply-Gem-Atrium Merger, which increased gross profit by $30.5 million for the third quarter of 2018.

Adjusted EBITDA for the three months ended September 29, 2018 was $101.1 million, an increase of $20.3 million from the three months ended September 30, 2017. The increase in Adjusted EBITDA was largely driven by the inclusion of Atrium in the 2018 period.  Please see the reconciliation of Ply Gem's Adjusted EBITDA at the end of this news release.

Conference Call Information

The NCI Building Systems, Inc. fourth quarter fiscal 2018 conference call is scheduled for Wednesday, December 19, 2018, at 10:00 a.m. ET (9:00 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 13685508# when prompted. The taped replay will be available two hours after the call through January 2, 2019. 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 and Ply Gem Holdings, Inc.

The combination of NCI and Ply Gem, headquartered in Cary, NC, establishes a leading exterior building products manufacturer with a broad range of products to residential and commercial customers for both new construction and repair & remodel. With a portfolio of key products which includes windows, doors, siding, metal wall and roof systems, engineered commercial buildings, insulated metal panels, stone and other adjacent products, the Company has more than 20,000 employees across 80 manufacturing, distribution and office locations throughout North America. For more information, visit www.ncibuildingsystems.com or www.plygem.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 performance expectations. Among the factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties relating to industry cyclicality and seasonality and adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; volatility in the United States ("U.S.") economy and abroad, generally, and in the credit markets; changes in laws or regulations; the effects of certain external domestic or international factors that we may not be able to control, including war, civil conflict, terrorism, natural disasters and public health issues; our ability to obtain financing on acceptable terms; recognition of goodwill or asset impairment charges; commodity price volatility and/or limited availability of raw materials, including steel; retention and replacement of key personnel; enforcement and obsolescence of our intellectual property rights; costs and liabilities related to compliance with environmental laws and environmental clean-ups; competitive activity and pricing pressure in our industry; volatility of the Company's stock price; our ability to make strategic acquisitions accretive to earnings; our ability to carry out our restructuring plans and to fully realize the expected cost savings; volatility in energy prices; the adoption of climate change legislation; breaches of our information system security measures; damage to our major information management systems; necessary maintenance or replacements to our enterprise resource planning technologies; potential personal injury, property damage or product liability claims or other types of litigation; compliance with certain laws related to our international business operations; the effect of tariffs on steel imports; the cost and difficulty associated with integrating and combining the businesses of NCI and Ply Gem; potential write-downs or write-offs, restructuring and impairment or other charges required in connection with the Merger; substantial governance and other rights held by our sponsor investors; the effect on our common stock price caused by transactions engaged in by our sponsor investors, our directors or executives; our substantial indebtedness and our ability to incur substantially more indebtedness; limitations that our debt agreements place on our ability to engage in certain business and financial transactions; the effect of increased interest rates on our ability to service our debt. See also the "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 28, 2018, 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 Year Ended


 October 28, 


 October 29, 


 October 28, 


 October 29, 


2018


2017


2018


2017









 Sales 

$       573,634


$       488,726


$   2,000,577


$   1,770,278

 Cost of sales 

440,353


372,421


1,537,895


1,354,214

      Gross profit 

133,281


116,305


462,682


416,064


23.2%


23.8%


23.1%


23.5%









 Engineering, selling, general and administrative expenses 

78,875


72,671


307,106


293,145

 Intangible asset amortization 

2,411


2,405


9,648


9,620

 Goodwill Impairment 

-


6,000


-


6,000

 Restructuring and impairment charges, net 

769


1,710


1,912


5,297

 Strategic development and acquisition related costs 

11,661


193


17,164


1,971

 Loss on disposition of business 

-


-


5,673


-

 Gain on insurance recovery 

-


-


(4,741)


(9,749)

      Income from operations 

39,565


33,326


125,920


109,780









 Interest income 

22


74


140


238

 Interest expense 

(4,895)


(7,161)


(21,808)


(28,899)

 Foreign exchange (loss) gain 

(152)


(488)


(244)


547

 Loss on extinguishment of debt 

-


-


(21,875)


-

 Other income, net 

(110)


427


962


1,472









      Income before income taxes 

34,430


26,178


83,095


83,138

 Provision for income taxes 

6,875


8,688


19,989


28,414


20.0%


33.2%


24.1%


34.2%









 Net income 

27,555


17,490


63,106


54,724









 Net income allocated to participating securities 

(138)


(78)


(412)


(325)









 Net income applicable to common shares 

$         27,417


$         17,412


$         62,694


$         54,399









 Check 








 Income per common share: 








    Basic 

$             0.41


$             0.25


$             0.95


$             0.77

    Diluted 

$             0.41


$             0.25


$             0.94


$             0.77









 Weighted average number of common shares outstanding: 








    Basic 

66,262


69,629


66,260


70,629

    Diluted 

66,326


69,741


66,362


70,778









 Increase in sales 

17.4%


1.8%


13.0%


5.1%

















Engineering, selling, general and administrative expenses percentage 

13.8%


14.9%


15.4%


16.6%

 

 NCI BUILDING SYSTEMS, INC. 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands) 

 (Unaudited) 










 October 28, 


October 29,




2018


2017







ASSETS 





  Current assets: 






 Cash and cash equivalents 


$         54,272


$      65,658


 Restricted cash 


245


136


 Accounts receivable, net 


233,297


199,897


 Inventories, net 


254,531


198,296


 Income taxes receivable 


1,012


3,617


 Investments in debt and equity securities, at market 

5,285


6,481


 Prepaid expenses and other 


34,821


31,359


 Assets held for sale 


7,272


5,582



 Total current assets 

590,735


511,026








 Property, plant and equipment, net 


236,240


226,995


 Goodwill  


148,291


148,291


 Intangible assets, net 


127,529


137,148


 Deferred income taxes 


982


2,544


 Other assets, net 


6,598


5,108



 Total assets 

$   1,110,375


$ 1,031,112







LIABILITIES AND STOCKHOLDERS' EQUITY 




  Current liabilities: 






 Current portion of long-term debt 


$           4,150


$               -


 Note payable 


497


440


 Accounts payable 


170,663


147,772


 Accrued compensation and benefits 

65,136


59,189


 Accrued interest 


1,684


6,414


 Accrued income taxes 


11,685


-


 Other accrued expenses 


81,884


76,897



 Total current liabilities 

335,699


290,712








 Long-term debt, net of deferred financing costs of $5,699 and $6,857 

403,076


387,290


 Deferred income taxes 


2,250


4,297


 Other long-term liabilities 


39,085


43,566



 Total long-term liabilities 

444,411


435,153














 Common stock 


663


687


 Additional paid-in capital 


523,788


562,277


 Accumulated deficit 


(186,291)


(248,046)


 Accumulated other comprehensive loss, net 

(6,708)


(7,531)


 Treasury stock, at cost 


(1,187)


(2,140)



 Total stockholders' equity  

330,265


305,247









 Total liabilities and stockholders' equity  

$   1,110,375


$ 1,031,112

 

NCI BUILDING SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)










Fiscal Year Ended


 October 28, 


 October 29, 


2018


2017





Cash flows from operating activities:




      Net income

$         63,106


$         54,724

      Adjustments to reconcile net income to net cash from operating activities




            Depreciation and amortization

42,325


41,318

            Amortization of deferred financing costs

1,501


1,819

            Loss on extinguishment of debt

21,875


-

            Share-based compensation expense

11,638


10,230

            Loss on disposition of business, net

5,092


-

            (Gains) losses on assets, net

(502)


1,371

            Goodwill impairment

-


6,000

            Gain on insurance recovery

(4,741)


(9,749)

            Provision for doubtful accounts

(491)


1,948

            (Benefit) provision for deferred income taxes

(889)


866

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




            Accounts receivable

(35,397)


(19,582)

            Inventories

(58,534)


(11,473)

            Income taxes

2,605


(2,637)

            Prepaid expenses and other

(5,479)


(2,271)

            Accounts payable

24,465


4,858

            Accrued expenses

16,284


(12,320)

            Other, net

(395)


(1,228)





Net cash provided by operating activities

82,463


63,874





Cash flows from investing activities:




      Capital expenditures

(47,827)


(22,074)

      Proceeds from sale of property, plant and equipment

6,338


3,197

      Business disposition, net

(1,426)


-

      Proceeds from insurance

4,741


8,593





Net cash used in investing activities

(38,174)


(10,284)





Cash flows from financing activities:




(Deposit) refund of restricted cash

(109)


173

Proceeds from stock options exercised

1,279


1,651

Proceeds from ABL facility 

100,000


35,000

Payments on ABL facility

(100,000)


(35,000)

Proceeds from term loan

415,000


-

Payments on term loan

(146,221)


(10,180)

Payments on senior notes

(265,470)


-

Payments on note payable

(1,742)


(1,570)

Payments of financing costs

(6,546)


-

Payments related to tax withholding for share-based compensation

(5,068)


(2,389)

Purchases of treasury stock

(46,705)


(41,214)





Net cash used in financing activities

(55,582)


(53,529)

Effect of exchange rate changes on cash and cash equivalents

(93)


194

Net (decrease) increase in cash and cash equivalents

(11,386)


255





Cash and cash equivalents at beginning of period

65,658


65,403





Cash and cash equivalents at end of period

$         54,272


$         65,658

 

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 Year Ended 


 October 28, 

 October 29, 


 October 28, 

 October 29, 


2018

2017


2018

2017

Net income per diluted common share, GAAP basis

$             0.41

$             0.25


$             0.94

$             0.77

  Loss on extinguishment of debt

-

-


0.33

-

  Loss on disposition of business

-

-


0.08

-

  Goodwill impairment

-

0.09


-

0.08

  Restructuring and impairment charges, net

0.01

0.02


0.03

0.07

  Strategic development and acquisition related costs

0.18

0.00


0.26

0.03

  Acceleration of CEO retirement benefits

-

-


0.07

-

  Gain on insurance recovery

-

-


(0.07)

(0.14)

  Other, net

-

0.00


0.00

0.01

  Tax effect of applicable non-GAAP adjustments (1)

(0.05)

(0.04)


(0.19)

(0.02)

Adjusted net income per diluted common share (2)

$             0.55

$             0.32


$             1.45

$             0.80














 Fiscal Three Months Ended 


Fiscal Year Ended


 October 28, 

 October 29, 


 October 28, 

 October 29, 


2018

2017


2018

2017

Net income applicable to common shares, GAAP basis

$         27,417

$         17,412


$         62,694

$         54,399

  Loss on extinguishment of debt

-

-


21,875

-

  Loss on disposition of business

-

-


5,673

-

  Goodwill impairment

-

6,000


-

6,000

  Restructuring and impairment charges, net

769

1,710


1,912

5,297

  Strategic development and acquisition related costs

11,661

193


17,164

1,971

  Acceleration of CEO retirement benefits

-

-


4,600

-

  Gain on insurance recovery

-

-


(4,741)

(9,749)

  Other, net

-

28


(323)

591

  Tax effect of applicable non-GAAP adjustments (1)

(3,418)

(3,093)


(12,783)

(1,603)

Adjusted net income applicable to common shares (2)

$         36,429

$         22,250


$         96,071

$         56,906


 (1)  The Company calculated the tax effect of non-GAAP adjustments by applying the combined federal and state 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 Year Ended





 October 28, 



 October 29, 





 October 28, 



 October 29, 





2018



2017





2018



2017






















% of
Total
Sales



% of
Total
Sales


%
Change



% of
Total
Sales



% of
Total
Sales


% Change

Total Sales
















Engineered Building Systems

$       243,997

35


$       188,183

32


29.7%


$       798,299

33


$       693,980

32


15.0%

Metal Components

187,635

27


181,288

30


3.5%


689,344

29


636,661

30


8.3%

Insulated Metal Panels

146,466

21


123,542

21


18.6%


504,413

21


441,404

21


14.3%

Metal Coil Coating

117,323

17


98,550

17


19.0%


417,296

17


368,880

17


13.1%

Total sales

695,421

100


591,563

100


17.6%


2,409,352

100


2,140,925

100


12.5%

Less: Intersegment sales

(121,787)

18


(102,837)

17


18.4%


(408,775)

17


(370,647)

17


10.3%

Total net sales

$       573,634

82


$       488,726

83


17.4%


$   2,000,577

83


$   1,770,278

83


13.0%

















External Sales


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$       231,315

40


$       178,222

36


29.8%


$       755,353

38


$       659,863

37


14.5%

Metal Components

171,759

30


155,183

32


10.7%


612,645

31


544,669

31


12.5%

Insulated Metal Panels

120,852

21


105,064

22


15.0%


424,762

21


372,304

21


14.1%

Metal Coil Coating

49,708

9


50,257

10


-1.1%


207,817

10


193,442

11


7.4%

Total external sales

$       573,634

100


$       488,726

100


17.4%


$   2,000,577

100


$   1,770,278

100


13.0%

















Operating Income


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$         24,859

10


$         13,043

7


90.6%


$         66,689

8


$         41,388

6


61.1%

Metal Components

19,734

11


23,119

13


-14.6%


87,593

13


78,768

12


11.2%

Insulated Metal Panels

21,025

14


14,895

12


41.2%


47,495

9


47,932

11


-0.9%

Metal Coil Coating

6,962

6


1,419

1


390.6%


28,588

7


21,459

6


33.2%

Corporate

(33,015)

-


(19,150)

-


72.4%


(104,445)

-


(79,767)

-


30.9%

Total operating income

$         39,565

7


$         33,326

7


18.7%


$       125,920

6


$       109,780

6


14.7%

















Adjusted Operating Income (1)


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$         25,256

10


$         13,738

7


83.8%


$         68,211

9


$         45,257

7


50.7%

Metal Components

19,734

11


23,188

13


-14.9%


86,335

13


78,763

12


9.6%

Insulated Metal Panels

21,374

15


15,696

13


36.2%


50,509

10


39,986

9


26.3%

Metal Coil Coating

6,962

6


7,419

8


-6.2%


28,588

7


27,459

7


4.1%

Corporate

(21,331)

-


(18,786)

-


13.5%


(83,115)

-


(77,575)

-


7.1%

Total adjusted operating income

$         51,995

9


$         41,255

8


26.0%


$       150,528

8


$       113,890

6


32.2%

















Adjusted EBITDA (2)


% of
Sales



% of
Sales





% of
Sales



% of
Sales



Engineered Building Systems

$         27,422

11


$         15,242

8


79.9%


$         77,148

10


$         54,702

8


41.0%

Metal Components

21,256

11


24,694

14


-13.9%


92,408

13


84,306

13


9.6%

Insulated Metal Panels

26,023

18


20,794

17


25.1%


68,104

14


58,414

13


16.6%

Metal Coil Coating

9,210

8


9,484

10


-2.9%


37,076

9


35,733

10


3.8%

Corporate

(18,097)

-


(16,273)

-


11.2%


(73,125)

-


(65,698)

-


11.3%

Total adjusted EBITDA

$         65,814

11


$         53,941

11


22.0%


$       201,611

10


$       167,457

9


20.4%


 (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 Pre-Merger 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 Pre-Merger ABL 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 Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Total Net Sales

$       421,349

$ 457,069

$ 548,525

$       573,634


$   2,000,577








Operating Income, GAAP

12,898

18,956

54,501

39,565


125,920

 Restructuring and impairment charges, net 

1,094

488

(439)

769


1,912

 Strategic development and acquisition related costs 

727

1,134

3,642

11,661


17,164

 Loss (gain) on disposition of business 

-

6,686

(1,013)

-


5,673

 Acceleration of CEO retirement benefits 

4,600

-

-

-


4,600

 Gain on insurance recovery 

-

-

(4,741)

-


(4,741)

Adjusted Operating Income

19,319

27,264

51,950

51,995


150,528








 Other income and expense 

928

(34)

87

(261)


720

 Depreciation and amortization 

10,358

10,442

10,174

11,351


42,325

 Share-based compensation expense 

2,270

1,998

1,041

2,729


8,038

Adjusted EBITDA

$         32,875

$   39,670

$   63,252

$         65,814


$       201,611








Year over year growth, Total Net Sales

7.6 %

8.7 %

16.9 %

17.4 %


13.0 %

Operating Income Margin

3.1 %

4.1 %

9.9 %

6.9 %


6.3 %

Adjusted Operating Income Margin

4.6 %

6.0 %

9.5 %

9.1 %


7.5 %

Adjusted EBITDA Margin

7.8 %

8.7 %

11.5 %

11.5 %


10.1 %





















Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Total Net Sales

$       391,703

$ 420,464

$ 469,385

$       488,726


$   1,770,278








Operating Income, GAAP

9,886

32,472

34,097

33,325


109,780

 Restructuring and impairment charges, net 

2,264

315

1,009

1,709


5,297

 Strategic development and acquisition related costs 

357

124

1,297

193


1,971

 Loss on sale of assets and asset recovery 

-

137

-

-


137

 Gain on insurance recovery 

-

(9,601)

(148)

-


(9,749)

 Unreimbursed business interruption costs 

-

191

235

28


454

 Goodwill impairment 

-

-

-

6,000


6,000

Adjusted Operating Income

12,507

23,638

36,490

41,255


113,890








 Other income and expense 

309

449

1,322

(62)


2,018

 Depreciation and amortization 

10,315

10,062

10,278

10,664


41,319

 Share-based compensation expense 

3,042

2,820

2,284

2,084


10,230

Adjusted EBITDA

$         26,173

$   36,969

$   50,374

$         53,941


$       167,457








Operating Income Margin

2.5 %

7.7 %

7.3 %

6.8 %


6.2 %

Adjusted Operating Income Margin

3.2 %

5.6 %

7.8 %

8.4 %


6.4 %

Adjusted EBITDA Margin

6.7 %

8.8 %

10.7 %

11.0 %


9.5 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)








Engineered Building Systems














Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Total Sales

$       156,964

$ 167,240

$ 230,098

$       243,997


$       798,299

External Sales

148,288

157,136

218,614

231,315


755,353








Operating Income, GAAP

8,263

9,271

24,296

24,859


66,689

 Restructuring and impairment charges, net 

1,136

280

(464)

397


1,349

 Strategic development and acquisition related costs 

173

-

-

-


173

Adjusted Operating Income

9,572

9,551

23,832

25,256


68,211








 Other income and expense 

733

(88)

(179)

(156)


310

 Depreciation and amortization 

2,077

2,323

1,905

2,322


8,627

Adjusted EBITDA

$         12,382

$   11,786

$   25,558

$         27,422


$         77,148








Year over year growth, Total sales

3.8 %

2.8 %

19.9 %

29.7 %


15.0 %

Year over year growth, External Sales

2.3 %

1.7 %

20.0 %

29.8 %


14.5 %

Operating Income Margin

5.3 %

5.5 %

10.6 %

10.2 %


8.4 %

Adjusted Operating Income Margin

6.1 %

5.7 %

10.4 %

10.4 %


8.5 %

Adjusted EBITDA Margin

7.9 %

7.0 %

11.1 %

11.2 %


9.7 %





















Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Total Sales

$       151,263

$ 162,624

$ 191,910

$       188,183


693,980

External Sales

145,021

154,456

182,164

178,222


659,863








Operating Income, GAAP

6,503

6,894

14,948

13,043


41,388

 Restructuring and impairment charges, net 

1,910

186

941

695


3,732

 Loss on sale of assets and asset recovery 

-

137

-

-


137

Adjusted Operating Income

8,413

7,217

15,889

13,738


45,257








 Other income and expense 

(41)

(125)

1,291

(694)


431

 Depreciation and amortization 

2,276

2,285

2,255

2,198


9,014

Adjusted EBITDA

$         10,648

$     9,377

$   19,435

$         15,242


$         54,702








Operating Income Margin

4.3 %

4.2 %

7.8 %

6.9 %


6.0 %

Adjusted Operating Income Margin

5.6 %

4.4 %

8.3 %

7.3 %


6.5 %

Adjusted EBITDA Margin

7.0 %

5.8 %

10.1 %

8.1 %


7.9 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)








Metal Components














Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Total Sales

$       146,832

$ 168,456

$ 186,421

$       187,635


$       689,344

External Sales

127,528

147,661

165,697

171,759


612,645








Operating Income, GAAP

17,089

22,082

28,688

19,734


87,593

 Restructuring and impairment charges, net 

(1,403)

120

25

-


(1,258)

Adjusted Operating Income

15,686

22,202

28,713

19,734


86,335








 Other income and expense 

53

67

54

82


256

 Depreciation and amortization 

1,576

1,444

1,357

1,440


5,817

Adjusted EBITDA

$         17,315

$   23,713

$   30,124

$         21,256


$         92,408








Year over year growth, Total sales

9.4 %

8.8 %

12.1 %

3.5 %


8.3 %

Year over year growth, External Sales

10.4 %

10.8 %

17.8 %

10.7 %


12.5 %

Operating Income Margin

11.6 %

13.1 %

15.4 %

10.5 %


12.7 %

Adjusted Operating Income Margin

10.7 %

13.2 %

15.4 %

10.5 %


12.5 %

Adjusted EBITDA Margin

11.8 %

14.1 %

16.2 %

11.3 %


13.4 %





















Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Total Sales

$       134,173

$ 154,895

$ 166,305

$       181,288


$       636,661

External Sales

115,557

133,290

140,639

155,183


544,669








Operating Income, GAAP

12,376

19,997

23,276

23,119


78,768

 Restructuring and impairment charges, net 

305

129

60

69


563

 Gain on insurance recovery 

-

(420)

(148)

-


(568)

Adjusted Operating Income

12,681

19,706

23,188

23,188


78,763








 Other income and expense 

28

52

55

84


219

 Depreciation and amortization 

1,334

1,302

1,266

1,422


5,324

Adjusted EBITDA

$         14,043

$   21,060

$   24,509

$         24,694


$         84,306








Operating Income Margin

9.2 %

12.9 %

14.0 %

12.8 %


12.4 %

Adjusted Operating Income Margin

9.5 %

12.7 %

13.9 %

12.8 %


12.4 %

Adjusted EBITDA Margin

10.5 %

13.6 %

14.7 %

13.6 %


13.2 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)








Insulated Metal Panels














Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Total Sales

$       110,794

$ 113,413

$ 133,740

$       146,466


$       504,413

External Sales

97,513

99,792

106,605

120,852


424,762








Operating Income, GAAP

7,071

1,540

17,859

21,025


47,495

 Restructuring and impairment charges, net 

1,284

88

-

372


1,744

 Strategic development and acquisition related costs 

300

61

-

(23)


338

 Loss (gain) on disposition of business 

-

6,686

(1,013)

-


5,673

 Gain on insurance recovery 

-

-

(4,741)

-


(4,741)

Adjusted Operating Income

8,655

8,375

12,105

21,374


50,509








 Other income and expense 

(273)

223

(51)

92


(9)

 Depreciation and amortization 

4,388

4,335

4,324

4,557


17,604

Adjusted EBITDA

$         12,770

$   12,933

$   16,378

$         26,023


$         68,104








Year over year growth, Total sales

16.4 %

10.2 %

11.7 %

18.6 %


14.3 %

Year over year growth, External Sales

18.3 %

15.0 %

8.8 %

15.0 %


14.1 %

Operating Income Margin

6.4 %

1.4 %

13.4 %

14.4 %


9.4 %

Adjusted Operating Income Margin

7.8 %

7.4 %

9.1 %

14.6 %


10.0 %

Adjusted EBITDA Margin

11.5 %

11.4 %

12.2 %

17.8 %


13.5 %





















Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Total Sales

$         95,195

$ 102,937

$ 119,730

$       123,542


$       441,404

External Sales

82,441

86,773

98,026

105,064


372,304








Operating Income, GAAP

2,192

19,377

11,468

14,895


47,932

 Restructuring and impairment charges, net 

-

-

8

683


691

 Strategic development and acquisition related costs 

-

-

-

90


90

 Gain on insurance recovery 

-

(9,181)

-

-


(9,181)

 Unreimbursed business interruption costs 

-

191

235

28


454

Adjusted Operating Income

2,192

10,387

11,711

15,696


39,986








 Other income and expense 

35

340

(211)

356


520

 Depreciation and amortization 

4,392

4,258

4,516

4,742


17,908

Adjusted EBITDA

$           6,619

$   14,985

$   16,016

$         20,794


$         58,414








Operating Income Margin

2.3 %

18.8 %

9.6 %

12.1 %


10.9 %

Adjusted Operating Income Margin

2.3 %

10.1 %

9.8 %

12.7 %


9.1 %

Adjusted EBITDA Margin

7.0 %

14.6 %

13.4 %

16.8 %


13.2 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)








Metal Coil Coating














Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Total Sales

$         88,343

$  95,190

$ 116,440

$       117,323


$       417,296

External Sales

48,020

52,480

57,609

49,708


207,817








Operating Income, GAAP

5,376

7,129

9,121

6,962


28,588

Adjusted Operating Income

5,376

7,129

9,121

6,962


28,588








 Depreciation and amortization 

2,058

2,085

2,097

2,248


8,488

Adjusted EBITDA

$           7,434

$     9,214

$   11,218

$           9,210


$         37,076








Year over year growth, Total sales

0.0 %

9.8 %

22.2%

19.0 %


13.1 %

Year over year growth, External Sales

(1.4)%

14.2 %

18.6 %

(1.1)%


7.4 %

Operating Income Margin

6.1 %

7.5 %

7.8 %

5.9 %


6.9 %

Adjusted Operating Income Margin

6.1 %

7.5 %

7.8 %

5.9 %


6.9 %

Adjusted EBITDA Margin

8.4 %

9.7 %

9.6 %

7.9 %


8.9 %





















Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Total Sales

$         88,340

$  86,729

$   95,261

$         98,550


$       368,880

External Sales

48,684

45,945

48,556

50,257


193,442








Operating Income, GAAP

6,706

6,227

7,107

1,419


21,459

 Goodwill impairment 

-

-

-

6,000


6,000

Adjusted Operating Income

6,706

6,227

7,107

7,419


27,459








 Other income and expense 

31

-

-

-


31

 Depreciation and amortization 

2,106

2,009

2,063

2,065


8,243

Adjusted EBITDA

$           8,843

$     8,236

$     9,170

$           9,484


$         35,733








Operating Income Margin

7.6 %

7.2 %

7.5 %

1.4 %


5.8 %

Adjusted Operating Income Margin

7.6 %

7.2 %

7.5 %

7.5 %


7.4 %

Adjusted EBITDA Margin

10.0 %

9.5 %

9.6 %

9.6 %


9.7 %

 

NCI BUILDING SYSTEMS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)








Corporate














Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 28, 

 April 29, 

 July 29, 

 October 28, 


 October 28, 


2018

2018

2018

2018


2018

Operating Loss, GAAP

$        (24,901)

$ (21,066)

$(25,463)

$       (33,015)


$     (104,445)

 Restructuring and impairment charges, net 

77

-

-

-


77

 Strategic development and acquisition related costs 

254

1,073

3,642

11,684


16,653

 Acceleration of CEO retirement benefits 

4,600

-

-

-


4,600

Adjusted Operating Loss

(19,970)

(19,993)

(21,821)

(21,331)


(83,115)








 Other income and expense 

415

(236)

263

(279)


163

 Depreciation and amortization 

259

255

491

784


1,789

 Share-based compensation expense 

2,270

1,998

1,041

2,729


8,038

Adjusted EBITDA

$        (17,026)

$ (17,976)

$(20,026)

$       (18,097)


$       (73,125)




























Fiscal Year


 Fiscal Three Months Ended 


Ended


 January 29, 

 April 30, 

 July 30, 

 October 29, 


 October 29, 


2017

2017

2017

2017


2017

Operating Loss, GAAP

$        (17,891)

$ (20,023)

$(22,702)

$       (19,151)


$       (79,767)

 Restructuring and impairment charges, net 

49

-

-

262


311

 Strategic development and acquisition related costs 

357

124

1,297

103


1,881

Adjusted Operating Loss

(17,485)

(19,899)

(21,405)

(18,786)


(77,575)








 Other income and expense 

256

182

187

192


817

 Depreciation and amortization 

207

208

178

237


830

 Share-based compensation expense 

3,042

2,820

2,284

2,084


10,230

Adjusted EBITDA

$        (13,980)

$ (16,689)

$(18,756)

$       (16,273)


$       (65,698)

 

PLY GEM HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(In thousands)

(Unaudited)










 For the Three Months Ended 


 September 29, 


 September 30, 


2018


2017

Net income (loss)

$                (3,242)


$               27,534

 Interest expense, net 

45,331


17,518

 Provision for income taxes 

13,087


17,659

 Depreciation and amortization 

37,080


13,237

EBITDA

92,256


75,948

 Non cash gain on foreign currency transactions 

(612)


(810)

 Acquisition costs 

8,602


-

 Customer inventory buybacks 

519


1,089

 Restructuring/integration expense 

960


134

 Non cash charge of purchase price allocated to inventories 

-


-

 Initial public offering costs 

-


-

 Litigation - class action charges, net 

-


757

 Public company costs 

-


1,137

 Retention expense 

316


445

 Long term incentive plan compensation 

-


1,306

 Stock option expense 

-


92

 Tax receivable agreement liability adjustment 

(901)


-

 Hurricane freight impact 

-


725

 Loss on modification or extinguishment of debt 

-


-

Adjusted EBITDA

$             101,140


$               80,823

 

Cision View original content:http://www.prnewswire.com/news-releases/nci-building-systems-reports-fourth-quarter-and-2018-fiscal-year-end-results-300768504.html

SOURCE NCI Building Systems, Inc.

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