NCI Building Systems Reports Fourth Quarter and 2017 Fiscal Year End Results
HOUSTON, Dec. 6, 2017 /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 29, 2017.
Fourth Quarter 2017 Financial and Operational Highlights:
-- Sales rose 1.8% to $488.7 million for the quarter, compared to $480.3
million in the prior year's fourth quarter
-- Gross profit for the quarter was $116.3 million or 23.8% of revenues,
compared to $120.8 million or 25.2% of revenues in the prior year's
fourth quarter
-- Net income was $17.5 million for the quarter, compared to $19.0 million
in last year's fourth quarter. Adjusted Net Income was $22.3 million
this quarter, compared to $19.8 million in the prior year's fourth
quarter
-- Net income per diluted common share for the quarter was $0.25, compared
to $0.27 in the prior year's fourth quarter. Adjusted Net Income was
$0.32 per diluted common share, compared to $0.28 in the prior year's
fourth quarter
-- Adjusted EBITDA was $53.9 million or 11.0% of revenues for the quarter,
compared to Adjusted EBITDA of $53.7 million or 11.2% of revenues in the
prior year's fourth quarter.
-- Repurchased over 2.6 million shares at an average purchase price of
$14.73 per share using $37.6 million. For fiscal 2017, the Company
repurchased 2.8 million shares at an average purchase price of $14.68
-- Total consolidated backlog increased to $545.6 million, up 5.8%
year-over-year
-- For the period, the Company estimated the hurricanes negatively impacted
sales by approximately $16.0 million, gross profit by approximately $8.3
million and Adjusted EBITDA by approximately $8.5 million
"While 2017 was a demanding year, in spite of the overall challenges we finished the year on a strong note in terms of bookings and shipments," said Donald R. Riley, President and Chief Executive Officer. "In closing out the year, we achieved many goals critical to realizing our long-term vision for NCI. We completed the rationalization of our manufacturing footprint, met our cost reduction initiative goals a year ahead of schedule, resulting in a combined annual savings of $31.9 million, and produced double digit growth in our Insulated Metal Panels business."
"As we look towards fiscal 2018, we are excited and optimistic about our opportunities to continue driving NCI forward. The next phase of the Company's evolution will be focused on implementing continuous improvement processes throughout the entire company with an emphasis on customer service and efficiency, expanding our sales through further product adjacencies, incorporating advanced automation across our manufacturing facilities and taking additional costs out of the business. We believe these efforts will position us to realize our long range goals," concluded Riley.
Fourth Quarter 2017 Results
Fourth quarter 2017 sales increased to $488.7 million, up 1.8% from $480.3 million in last year's fourth quarter, primarily due to continued commercial discipline in the pass-through of higher material costs. On a year-over-year basis, tonnage volumes were significantly lower in the Buildings segment resulting from the impact of hurricane related disruptions, customers access to job sites and transportation delays. The Company estimated the hurricanes reduced sales by approximately $16.0 million for the quarter.
Gross profit was $116.3 million this quarter, down from $120.8 million in the fourth quarter of 2016 and gross profit margins were 23.8% for the this year's fourth quarter compared to 25.2% in the fourth quarter of 2016. Gross margins in the fourth quarter of the year declined primarily as a result of lower volumes in the Buildings segment, uneven production flow and increased transportation costs. The Company estimated the hurricanes impacted gross profits by approximately $8.3 million for the quarter.
Engineering, selling, general and administrative ("ESG&A") expenses were $72.7 million for the quarter, compared to $77.6 million in the fourth quarter of 2016. As a percentage of revenues, ESG&A expenses decreased approximately 130 basis points to 14.9% in the 2017 fourth quarter compared to 16.2% in the prior year's fourth quarter, primarily driven by the Company's cost reduction initiatives, integration activities and lower incentive compensation costs.
Operating income for the quarter was $33.3 million, compared to $39.4 million in the prior year's fourth quarter. Adjusted Operating Income, a non-GAAP measure which excludes certain identified items, was $41.3 million in the current quarter, compared to $40.9 million in the fourth quarter of 2016. The Company estimated the hurricanes impacted Adjusted Operating Income by approximately $8.5 million for the quarter.
Net income applicable to common shares in the quarter was $17.4 million, or $0.25 per diluted common share, compared to $19.0 million, or $0.27 per diluted common share in the prior year's fourth quarter. Net income was impacted by the following special items: $6.0 million non-cash goodwill impairment charge related to the coil coating operations of CENTRIA, $1.1 million of restructuring charges predominately attributable to severance costs, $0.6 million for asset impairments and $0.2 million of strategic development and acquisition related costs, partially offset by $3.1 million from the associated tax effect of these items. Excluding the impact of these special items, the Company reported Adjusted Net Income, a non-GAAP measure, of $22.3 million, or $0.32 per diluted common share, compared to $19.8 million, or $0.28 per diluted common share, in the fourth quarter of 2016.
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 $53.9 million this quarter, compared to $53.7 million in the prior year's fourth quarter. The Company estimated that the fourth quarter of fiscal 2017 was impacted by $8.5 million as a result of job site disruptions, uneven production flow and increased transportation costs related to the various hurricanes during the period.
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 were $65.7 million, compared to $65.4 million at the end of the fourth quarter of fiscal 2016. Cash and cash equivalents increased sequentially from $45.9 million at the end of the third quarter of fiscal 2017 as a result of strong operating cash flow offset by $37.6 million of share repurchases during the period. NCI's net debt leverage ratio (net debt/EBITDA) at the end of the fourth quarter was 2.0x. In addition, the Company's $150.0 million ABL facility remained undrawn as of October 29, 2017.
Fourth Quarter 2017 Segment Performance
Third party sales in the Buildings segment were $178.2 million in the fourth quarter compared to $196.6 million in the prior year period, as a result of significantly lower volumes during the period, largely driven by hurricane related disruptions. Operating income decreased to $13.0 million this quarter, compared to $22.8 million in the fourth quarter of 2016. Adjusted Operating Income decreased to $13.7 million in the current quarter, compared to $23.1 million in the fourth quarter of fiscal 2016. The year-over-year decrease in the Building segment's operating margins relates largely to lower plant utilization driven by lower volumes during the period, uneven production flow and increased transportation costs. The hurricanes had a disproportionate effect on the Buildings segment due to the larger transaction size and longer lead times from order to delivery.
The Components segment generated $281.3 million in third party sales during the quarter, an increase of 10.3% from $255.1 million in the fourth quarter of fiscal 2016, led by growth in the insulated panel product lines, as well as commercial pricing discipline and higher volumes across the segment. Operating income was $32.8 million for the quarter compared to $31.1 million in the fourth quarter of 2016. Adjusted Operating Income was $39.7 million, compared to $31.6 million in the fourth quarter of fiscal 2016. The Components segment's profitability was improved by higher volumes and capacity utilization across the legacy single skin product lines and a strong product mix in insulated panel sales.
Third party sales in the Coatings segment were $29.2 million, compared to $28.6 million in the fourth quarter of fiscal 2016. Operating income was $6.6 million for the quarter, compared to $7.0 million in the fourth quarter of 2016. Operating margins in the Coatings group were impacted by lower third party volumes offset by improved commercial discipline and higher internal volumes.
Market Commentary
The key leading indicators that NCI follows and that typically have the most meaningful correlation to nonresidential low-rise construction starts are the American Institute of Architects' ("AIA") Architecture Mixed Use Index, the Dodge Residential single family starts and the Conference Board Leading Economic Index ("LEI"). Historically, there has been a very high correlation to low-rise nonresidential starts when the three leading indicators are combined and then seasonally adjusted. The combined forward projection of these metrics, based on a 9- to 14-month historical lag for each metric, indicates an expected positive growth of 2.0% to 4.0% for low-rise new construction starts for the Company's addressable market in fiscal 2018.
Internal bookings and quoting activity indicates a continuation of low single digit growth as compared to the prior year. Offices and banks, educational and governmental end-markets have shown positive year-over-year growth. In NCI's geographic markets South Atlantic, New England and East North Central regions showed the strongest growth year-over-year.
Cost Initiatives and Guidance
The Company's two cost savings initiatives in manufacturing and ESG&A were ahead of schedule at the end of the fourth quarter. The Company is targeting an additional $40 - $50 million in cost savings reductions and efficiencies by the end of 2020.
For the first quarter of fiscal 2018, NCI expects revenues to be in the range of $390 to $410 million and Adjusted EBITDA to be in the range of $24 to $34 million.
The Company has provided additional detailed financial guidance in the quarterly supplemental presentation at www.ncibuildingsystems.com under the "Investors" section.
Conference Call Information
The NCI Building Systems, Inc. fourth quarter 2017 conference call is scheduled for Thursday, December 7, 2017, at 9:00 a.m. ET (8:00 a.m. CT). Please dial 1-412-902-0003 or 1-877-407-0672 (toll-free) to participate in the call. To listen to a live broadcast of the call over the Internet or to review the archived call, please visit the Company's website at www.ncibuildingsystems.com. To access the taped telephone replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13673308# when prompted. The taped replay will be available two hours after the call through December 21, 2017. A replay of the webcast will be available on the Company's website under the Event Calendar, Calls & Webcast section of the Investor Relations page of the NCI website for approximately 90 days.
About NCI Building Systems
NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States, Canada, Mexico and China with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.
Contact:
K. Darcey Matthews
Vice President, Investor Relations
281-897-7785
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "anticipate," "guidance," "plan," "potential," "expect," "should," "will," "forecast" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and expectations for new nonresidential low-rise construction starts in fiscal 2018 and our financial outlook and guidance, including our first quarter fiscal 2018 forecasted revenues and Adjusted EBITDA, long term targets with respect to cost savings and other consolidated financial performance guidance. Among the factors that could cause actual results to differ materially include, but are not limited to, industry cyclicality and seasonality; adverse weather conditions; challenging economic conditions affecting the nonresidential construction industry; volatility in the U.S. economy and abroad, generally, and in the credit markets; substantial indebtedness and our ability to incur substantially more or refinance 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 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; effect on the price of the Company's common stock of future sales of the Company's common stock held by our sponsor; substantial governance and other rights held by our sponsor; breaches of our information system security measures and damage to our major information management systems; hazards that may cause personal injury or property damage, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance; changes in laws or regulations, including the Dodd-Frank Act; the timing and amount of our stock repurchases; and costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters. See also the "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 2017, and other risks described in documents subsequently filed by the Company from time to time with the SEC, which identify other important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. The Company expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements, whether as a result of new information, future events, or otherwise.
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Fiscal Three Months Ended Fiscal Year Ended
------------------------- -----------------
October 29, October 30, October 29, October 30,
2017 2016 2017 2016
---- ---- ---- ----
Sales $488,726 $480,314 $1,770,278 $1,684,928
Cost of sales 372,421 359,403 1,354,077 1,258,680
Loss (gain) on sale of assets and asset recovery - 62 137 (1,642)
--- --- --- ------
Gross profit 116,305 120,849 416,064 427,890
23.8% 25.2% 23.5% 25.4%
Engineering, selling, general and administrative
expenses 72,671 77,640 293,145 302,551
Intangible asset amortization 2,405 2,412 9,620 9,638
Goodwill impairment 6,000 - 6,000 -
Strategic development and acquisition related costs 193 590 1,971 2,670
Restructuring and impairment charges 1,710 815 5,297 4,252
Gain on insurance recovery - - (9,749) -
Income from operations 33,326 39,392 109,780 108,779
Interest income 74 11 238 146
Interest expense (7,161) (7,559) (28,899) (31,019)
Foreign exchange (loss) gain (488) (312) 547 (1,401)
Gain from bargain purchase - - - 1,864
Other income, net 427 118 1,472 595
--- --- ----- ---
Income before income taxes 26,178 31,650 83,138 78,964
Provision for income taxes 8,688 12,649 28,414 27,937
----- ------ ------ ------
33.2% 40.0% 34.2% 35.4%
Net income $17,490 $19,001 $54,724 $51,027
======= ======= ======= =======
Net income allocated to participating securities (78) (105) (325) (389)
Net income applicable to common shares $17,412 $18,896 $54,399 $50,638
======= ======= ======= =======
Check
Income per common share:
Basic $0.25 $0.27 $0.77 $0.70
Diluted $0.25 $0.27 $0.77 $0.70
Weighted average number of common shares
outstanding:
Basic 69,629 70,845 70,629 72,411
Diluted 69,741 71,020 70,778 72,857
Increase in sales 1.8% 4.5% 5.1% 7.8%
Engineering, selling, general and administrative
expenses percentage
14.9% 16.2% 16.6% 18.0%
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 29, October 30,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $65,658 $65,403
Restricted cash 136 310
Accounts
receivable, net 199,897 182,258
Inventories, net 198,296 186,824
Income taxes
receivable 3,617 982
Deferred income
taxes 22,605 29,104
Investments in
debt and equity
securities, at
market 6,481 5,748
Prepaid expenses
and other 33,086 29,971
Assets held for
sale 5,582 4,256
----- -----
Total current assets 535,358 504,856
------- -------
Property, plant
and equipment,
net 226,995 242,212
Goodwill 148,291 154,271
Intangible
assets, net 137,148 146,769
Other assets,
net 1,875 2,092
----- -----
Total assets $1,049,667 $1,050,200
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $440 $460
Accounts payable 147,772 142,913
Accrued
compensation
and benefits 58,408 72,612
Accrued interest 6,414 7,165
Other accrued
expenses 103,253 103,384
------- -------
Total current liabilities 316,287 326,534
------- -------
Long-term debt,
net of deferred
financing costs
of $6,857 and
$8,096 387,290 396,051
Deferred income
taxes 23,396 24,804
Other long-term
liabilities 18,953 21,494
------ ------
Total long-term liabilities 429,639 442,349
------- -------
Common stock 687 715
Additional paid-
in capital 562,277 603,120
Accumulated
deficit (248,046) (302,706)
Accumulated
other
comprehensive
loss, net (9,037) (10,553)
Treasury stock,
at cost (2,140) (9,259)
------ ------
Total stockholders' equity 303,741 281,317
------- -------
Total liabilities and
stockholders' equity $1,049,667 $1,050,200
========== ==========
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Fiscal Year Ended
-----------------
October 29, October 30,
2017 2016
---- ----
Cash flows from operating
activities:
Net income $54,724 $51,027
Adjustments to reconcile net
income to net cash from
operating activities
Depreciation and amortization 41,318 41,924
Amortization of deferred
financing costs 1,819 1,908
Share-based compensation
expense 10,230 10,892
Losses (gains) on assets, net 1,371 (2,673)
Goodwill impairment 6,000 -
Gain on insurance recovery (9,749) -
Provision for doubtful accounts 1,948 1,343
Provision for deferred income
taxes 866 1,318
Excess tax (benefits) shortfalls
from share-based compensation
arrangements (1,515) 289
Changes in operating assets and
liabilities, net of effect of
acquisitions:
Accounts receivable (19,582) (18,141)
Inventories (11,473) (29,054)
Income taxes (2,637) (1,953)
Prepaid expenses and other (3,293) 671
Accounts payable 4,858 (1,598)
Accrued expenses (11,299) 12,656
Other, net (1,227) 159
------ ---
Net cash provided by operating
activities 62,359 68,768
------ ------
Cash flows from investing
activities:
Acquisitions, net of cash
acquired - (4,343)
Capital expenditures (22,074) (21,024)
Proceeds from sale of property,
plant and equipment 3,197 5,417
Proceeds from insurance 8,593 10,000
----- ------
Net cash used in investing
activities (10,284) (9,950)
------- ------
Cash flows from financing
activities:
Refund of restricted cash 173 370
Proceeds from stock options
exercised 1,651 12,612
Excess tax benefits (shortfalls)
from share-based compensation
arrangements 1,515 (289)
Proceeds from Amended ABL
facility 35,000 -
Payments on Amended ABL facility (35,000) -
Payments on term loan (10,180) (40,000)
Payments on note payable (1,570) (1,430)
Purchases of treasury stock (43,603) (64,015)
------- -------
Net cash used in financing
activities (52,014) (92,752)
------- -------
Effect of exchange rate changes
on cash and cash equivalents 194 (325)
Net increase (decrease) in cash
and cash equivalents 255 (34,259)
Cash and cash equivalents at
beginning of period 65,403 99,662
------ ------
Cash and cash equivalents at end
of period $65,658 $65,403
======= =======
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND NET INCOME COMPARISON
(Unaudited)
Fiscal Three Months Ended Fiscal Year Ended
------------------------- -----------------
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
===== ===== ===== =====
Fiscal Three Months Ended Fiscal Year Ended
------------------------- -----------------
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
======= ======= ======= =======
(1) The Company calculated the tax effect of
non-GAAP adjustments by applying the
applicable statutory tax rate for the
period to each applicable non-GAAP item.
(2) The Company discloses a tabular comparison
of Adjusted net income per diluted common
share and Adjusted net income applicable
to common shares, which are non-GAAP
measures, because they are referred to in
the text of our press releases and are
instrumental in comparing the results
from period to period. Adjusted net
income per diluted common share and
Adjusted net income applicable to common
shares should not be considered in
isolation or as a substitute for net
income per diluted common share and net
income applicable to common shares as
reported on the face of our consolidated
statements of operations.
NCI Building Systems, Inc
Business Segments
(In thousands)
(Unaudited)
Fiscal Three Months Fiscal Three Months
Ended Ended $ %
October 29, 2017 October 30, 2016 Inc/(Dec) Change
---------------- ---------------- --------- ------
% of % of
Total Total
Sales: Sales Sales
Engineered building systems $188,183 32 $204,208 36 $(16,025) -7.8%
Metal components 316,716 55 292,430 52 24,286 8.3%
Metal coil coating 73,007 13 69,283 12 3,724 5.4%
------ --- ------ --- ----- ---
Total sales 577,906 100 565,921 100 11,985 2.1%
Less: Intersegment sales 89,180 15 85,607 15 3,573 4.2%
----- ---
Total net sales $488,726 85 $480,314 85 $8,412 1.8%
-------- --- -------- --- ------ ---
% of % of
Operating income (loss): Sales Sales
Engineered building systems $13,043 7 $22,830 11 $(9,787) -42.9%
Metal components 32,818 10 31,059 11 1,759 5.7%
Metal coil coating 6,615 9 7,018 10 (403) -5.7%
Corporate (19,150) - (21,515) - 2,365 11.0%
-----
Total operating income $33,326 7 $39,392 8 $(6,066) -15.4%
------- --- ------- --- ------- -----
% of % of
Adjusted operating income
(loss) (1): Sales Sales
Engineered building systems $13,738 7 $23,103 11 $(9,365) -40.5%
Metal components 39,689 13 31,565 11 8,124 25.7%
Metal coil coating 6,615 9 7,018 10 (403) -5.7%
Corporate (18,785) - (20,827) - 2,042 9.8%
-----
Total adjusted operating
income $41,257 8 $40,859 9 $398 1.0%
------- --- ------- --- ---- ---
Fiscal Year Ended Fiscal Year Ended $ %
October 29, 2017 October 30, 2016 Inc/(Dec) Change
---------------- ---------------- --------- ------
% of % of
Total Total
Sales: Sales Sales
Engineered building systems $693,980 33 $672,235 34 $21,745 3.2%
Metal components 1,129,816 54 1,044,040 53 85,776 8.2%
Metal coil coating 271,085 13 247,736 13 23,349 9.4%
------- --- ------- --- ------ ---
Total sales 2,094,881 100 1,964,011 100 130,870 6.7%
Less: Intersegment sales 324,603 15 279,083 14 45,520 16.3%
------ ----
Total net sales $1,770,278 85 $1,684,928 86 $85,350 5.1%
---------- --- ---------- --- ------- ---
% of % of
Operating income (loss): Sales Sales
Engineered building systems $41,388 6 $62,046 9 $(20,658) -33.3%
Metal components 124,224 11 102,495 10 21,729 21.2%
Metal coil coating 23,935 9 25,289 10 (1,354) -5.4%
Corporate (79,767) - (81,051) - 1,284 1.6%
-----
Total operating income $109,780 6 $108,779 6 $1,001 0.9%
-------- --- -------- --- ------ ---
% of % of
Adjusted operating income
(loss) (1): Sales Sales
Engineered building systems $45,257 7 $61,370 9 $(16,113) -26.3%
Metal components 122,273 11 104,559 10 17,714 16.9%
Metal coil coating 23,935 9 25,328 10 (1,393) -5.5%
Corporate (77,575) - (77,198) - (377) -0.5%
----
Total adjusted operating
income $113,890 6 $114,059 7 $(169) -0.1%
-------- --- -------- --- ----- ----
(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. See
the reconciliation of Adjusted
operating income (loss) to
operating income (loss) on the
following page.
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 OCTOBER 29, 2017 AND OCTOBER 30, 2016
(In thousands)
(Unaudited)
Fiscal Three Months Ended October 29, 2017
------------------------------------------
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
======= ======= ====== ======== =======
Fiscal Three Months Ended October 30, 2016
------------------------------------------
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.
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 YEAR ENDED OCTOBER 29, 2017 AND OCTOBER 30, 2016
(In thousands)
(Unaudited)
Fiscal Year Ended October 29, 2017
----------------------------------
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
======= ======== ======= ======== ========
Fiscal Year Ended October 30, 2016
----------------------------------
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.
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)
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Fiscal Year Ended
January 29, April 30, July 30, October 29, October 29,
2017 2017 2017 2017 2017
---- ---- ---- ---- ----
Net income $2,039 $16,974 $18,221 $17,490 $54,724
Add:
Depreciation and amortization 10,315 10,062 10,278 10,663 41,318
Consolidated interest
expense, net 6,881 7,341 7,353 7,086 28,661
Provision for income taxes 1,275 8,606 9,845 8,688 28,414
Restructuring and impairment
charges 2,264 315 1,009 1,709 5,297
Strategic development and
acquisition related costs 357 124 1,297 193 1,971
Share-based compensation 3,042 2,820 2,284 2,084 10,230
Goodwill impairment - - - 6,000 6,000
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
Adjusted EBITDA(1) $26,173 $36,969 $50,374 $53,941 $167,457
======= ======= ======= ======= ========
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Fiscal Year Ended
January 31, May 1, July 31, October 30, October 30,
2016 2016 2016 2016 2016
---- ---- ---- ---- ----
Net income $5,892 $2,420 $23,715 $19,001 $51,028
Add:
Depreciation and amortization 10,747 10,765 10,595 9,817 41,924
Consolidated interest
expense, net 7,847 7,792 7,685 7,548 30,872
Provision for income taxes 2,453 1,209 11,627 12,649 27,938
Restructuring and impairment
charges 1,510 1,149 778 815 4,252
(Gain) from bargain purchase (1,864) - - - (1,864)
Strategic development and
acquisition related costs 681 579 819 590 2,669
Share-based compensation 2,582 2,468 2,661 3,181 10,892
(Gain) loss on sale of assets
and asset recovery (725) (927) (52) 62 (1,642)
Adjusted EBITDA (1) $29,123 $25,455 $57,828 $53,663 $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.
NCI Building Systems, Inc.
Reconciliation of Segment Sales to Third Party Segment Sales
(In thousands)
(Unaudited)
Fiscal Fiscal $ %
4th Qtr 2017 4th Qtr 2016 Inc/(Dec) Change
------------ ------------ ----------
Engineered Building Systems
Total Sales $188,183 32% $204,208 36% $(16,025) -7.8%
Less: Intersegment sales 9,961 7,612 2,349 30.9%
Third Party Sales $178,222 36% $196,596 41% $(18,374) -9.3%
Operating Income $13,043 7% $22,830 12% $(9,787) -42.9%
Metal Components
Total Sales $316,716 55% $292,430 52% $24,286 8.3%
Less: Intersegment sales 35,458 37,324 (1,866) -5.0%
Third Party Sales $281,258 58% $255,106 53% $26,152 10.3%
Operating Income $32,818 12% $31,059 12% $1,759 5.7%
Metal Coil Coating
Total Sales $73,007 13% $69,283 12% $3,724 5.4%
Less: Intersegment sales 43,761 40,671 3,090 7.6%
Third Party Sales $29,246 6% $28,612 6% $634 2.2%
Operating Income $6,615 23% $7,018 25% $(403) -5.7%
Consolidated
Total Sales $577,906 100% $565,921 100% $11,985 2.1%
Less: Intersegment 89,180 85,607 3,573 4.2%
Third Party Sales $488,726 100% $480,314 100% $8,412 1.8%
Operating Income $33,326 7% $39,392 8% $(6,066) -15.4%
Fiscal YTD Fiscal YTD $ %
4th Qtr 2017 4th Qtr 2016 Inc/(Dec) Change
------------ ------------ ----------
Engineered Building Systems
Total Sales $693,980 33% $672,235 34% $21,745 3.2%
Less: Intersegment sales 34,117 19,764 14,353 72.6%
Third Party Sales $659,863 37% $652,471 39% $7,392 1.1%
Operating Income $41,388 6% $62,046 10% $(20,658) -33.3%
Metal Components
Total Sales $1,129,816 54% $1,044,040 53% $85,776 8.2%
Less: Intersegment sales 131,537 118,177 13,360 11.3%
Third Party Sales $998,279 57% $925,863 55% $72,416 7.8%
Operating Income $124,224 12% $102,495 11% $21,729 21.2%
Metal Coil Coating
Total Sales $271,085 13% $247,736 13% $23,349 9.4%
Less: Intersegment sales 158,949 141,142 17,807 12.6%
Third Party Sales $112,136 6% $106,594 6% $5,542 5.2%
Operating Income $23,935 21% $25,289 24% $(1,354) -5.4%
Consolidated
Total Sales $2,094,881 100% $1,964,011 100% $130,870 6.7%
Less: Intersegment sales 324,603 279,083 45,520 16.3%
Third Party Sales $1,770,278 100% $1,684,928 100% $85,350 5.1%
Operating Income $109,780 6% $108,779 6% $1,001 0.9%
View original content:http://www.prnewswire.com/news-releases/nci-building-systems-reports-fourth-quarter-and-2017-fiscal-year-end-results-300567957.html
SOURCE NCI Building Systems, Inc.
