NCI Building Systems Reports First Quarter 2018 Results
NCI Building Systems Reports First Quarter 2018 Results
HOUSTON, March 6, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for the first fiscal quarter ended January 28, 2018.
First Quarter 2018 Financial and Operational Highlights:
-- Sales rose 7.6% to $421.3 million for the quarter, compared to $391.7
million in the prior year's first quarter
-- Gross profit for the quarter was $91.9 million or 21.8% of revenues,
compared to $84.0 million or 21.4% of revenues in the prior year's first
quarter
-- Net income was $5.2 million for the quarter, compared to $2.0 million in
the prior year's first quarter. Adjusted Net Income was $9.5 million
this quarter, compared to $3.6 million in the prior year's first quarter
-- Net income per diluted common share for the quarter was $0.08, compared
to $0.03 in the prior year's first quarter. Adjusted Net Income was
$0.14 per diluted common share, compared to $0.05 in the prior year's
first quarter
-- Adjusted EBITDA was $32.9 million, or 7.8% of revenues, for the quarter,
compared to Adjusted EBITDA of $26.2 million, or 6.7% of revenues, in
the prior year's first quarter
-- Total consolidated backlog increased to $569.9 million, up 8.1%
year-over-year
"We are pleased with our first quarter results across our businesses, led by the strong performance from our Insulated Metal Panels segment," said Donald R. Riley, President and Chief Executive Officer. "These results demonstrate our commitment to maintaining commercial discipline in an environment of increasing costs.
Looking ahead, our internal economic indicators are tracking to expectations and our year-over-year growth in both backlog and bookings continues to support our favorable outlook. The NCI team is focused on and is making good progress on successfully executing our advanced manufacturing and continuous improvement initiatives. The successful execution of these initiatives and our backlog should position NCI well for the future."
First Quarter 2018 Results
First quarter 2018 sales increased to $421.3 million, up 7.6%, from $391.7 million in last year's first quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across our segments, combined with strong volume growth in both the Metal Components and Insulated Metal Panels (IMP) segments.
Gross profit was $91.9 million this quarter, compared to $84.0 million in the first quarter of fiscal 2017 and gross profit margins were 21.8% for the year's first quarter compared to 21.4% in the first quarter of fiscal 2017. Gross margins in the first quarter of the year increased primarily as a result of growth in the IMP segment and favorable commercial discipline, partially offset by higher transportation costs.
Engineering, selling, general and administrative ("ESG&A") expenses were $74.8 million for the quarter, compared to $69.0 million in the prior year's first quarter. As a percentage of revenues, ESG&A expenses were 17.7% in the fiscal 2018 first quarter compared to 17.6% in the prior year's first quarter. The first quarter of fiscal 2018 included a special charge of $4.6 million related to the acceleration of retirement benefits of the Company's former Chief Executive Officer. Excluding the effects of the acceleration of share-based compensation, ESG&A, as a percentage of revenues, improved to 16.7% in the first quarter of 2018.
Operating income for the quarter was $13.9 million, compared to $9.9 million in the prior year's first quarter. Adjusted Operating Income, a non-GAAP measure which excludes certain identified items, was $19.3 million in the current quarter, compared to $12.5 million in the prior year's first quarter.
Net income applicable to common shares in the quarter was $5.2 million, or $0.08 per diluted common share, compared to $2.0 million, or $0.03 per diluted common share in the prior year's first quarter. Net income was impacted by the following special items: a $4.6 million charge related to the acceleration of retirement benefits of the former CEO, $1.1 million charge for restructuring activities predominately attributable to severance costs and $0.7 million strategic development and acquisition related costs, partially offset by a discrete $1.4 million benefit from the December enactment of the Tax Cuts and Jobs Act and $1.5 million from the associated tax effect of these items. Excluding the impact of these special items, Adjusted Net Income, a non-GAAP measure, was $9.5 million, or $0.14 per diluted common share, compared to $3.6 million, or $0.05 per diluted common share, in the prior year's first 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 $32.9 million this quarter, compared to $26.2 million in the prior year's first 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 first quarter were $12.4 million, compared to $15.8 million at the end of the first quarter of fiscal 2017. Cash and cash equivalents decreased sequentially $53.3 million from $65.7 million at the end of the fourth quarter of fiscal 2017 primarily as a result of $46.7 million of share repurchases during the first quarter. NCI's net debt leverage ratio (net debt/EBITDA) at the end of the first quarter was 2.3x. As of January 28, 2018, the Company had utilized $10.0 million of the Company's $150.0 million ABL facility.
As of the first quarter of fiscal 2018, the Company changed its reportable business segments to the following:
Prior Reporting Segments New Reporting Segments
------------------------ ----------------------
Engineered Building Systems Engineered Building Systems
Metal Components Metal Components
Metal Coil Coating Insulated Metal Panels
Metal Coil Coating
Two years of historical financial results for previously reported quarterly and annual periods for fiscal 2016 and 2017 have been recast to reflect the four new business segments. An 8-K with this historical information was filed on February 28, 2018.
First Quarter 2018 Segment Performance
Sales in the Engineered Building Systems segment were $157.0 million in the first quarter, compared to $151.3 million in the prior year period, as a result of commercial discipline passing through higher input costs, offset by lower tonnage volumes. Operating income increased to $8.3 million this quarter, compared to $6.5 million in the prior year's first quarter. Adjusted Operating Income, a non-GAAP measure, increased to $9.6 million this quarter, compared to $8.4 million in the prior year's first quarter. Operating margins increased as a result of lower ESG&A costs and improved commercial discipline, partially offset by lower plant utilization and higher transportation costs.
The Metal Components segment generated $146.8 million in sales during the quarter, an increase of 9.4% from $134.2 million in the prior year's first quarter, led by higher external volumes across the segment and the pass-through of increasing materials costs. Operating income was $17.1 million for the quarter compared to $12.4 million in the prior year's first quarter. Adjusted Operating Income was $15.7 million, compared to $12.7 million in the prior year's first quarter. The Metal Components segment's operating margins increased as a result of improved operating leverage across the cost structure on higher volumes, partially offset by higher transportations costs.
The Insulated Metal Panels segment generated $110.8 million in sales during the quarter, an increase of 16.4% from $95.2 million in the prior year's first quarter, as a result of commercial discipline on rising input costs and increasing sales volumes. Operating income was $7.1 million for the quarter compared to $2.2 million in the prior year's first quarter. Adjusted Operating Income was $8.7 million, compared to $2.2 million in the prior year's first quarter. The IMP segment's operating margins increased as a result of improved operating leverage across the cost structure on higher volumes and committed commercial discipline on rising input costs.
Sales in the Metal Coil Coating segment were $88.3 million in the first quarter of both fiscal 2018 and fiscal 2017. Operating income and Adjusted Operating Income was $5.4 million for the quarter compared to $6.7 million in the prior year's first quarter, respectively. Operating margins in the Metal Coil Coating segment were impacted by less favorable product mix and lower margins in the CENTRIA coil coating operations as that entity was further integrated and aligned with the legacy coil coating operations.
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 nonresidential low-rise construction 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 new nonresidential low-rise construction starts for the Company's addressable market in fiscal 2018.
Recent Developments
In February 2018, NCI entered into a new $415 million secured term loan facility and used the proceeds to redeem and retire the Company's existing 8.25% senior notes due 2023 and refinance its existing $144 million senior secured term loan and to pay related call premiums, fees and expenses, including accrued and unpaid interest in respect of the existing term loan facility and the senior notes. The Company also announced the closing of the refinancing of its existing ABL facility with a new $150.0 million facility. As a result of these refinancing transactions, the Company expects to reduce its current effective cash interest rate from approximately 7.0% to 3.6%, which represents a reduction in annual interest expense of approximately $12.5 million based on current LIBOR rates. The company expects to record a loss, primarily related to the early extinguishment of the 8.25% senior notes ranging from $23.0 - $25.0 million during the quarter ending April 29, 2018.
On January 29, 2018, the Company closed on the sale of CENTRIA International LLC, which included the CENTRIA manufacturing facility in China. These operations were not considered material to the growth opportunities of the Company and had generated $9.9 million in revenues and an operating income of $1.2 million in fiscal 2017. The Company estimates that it will record a loss on the transaction ranging between $6.0 million and $7.5 million during the quarter ending April 29, 2018, of which approximately $3.5 to $4.0 million is considered a non-cash expense.
As the result of recently enacted Tax Cuts and Jobs Act, the company's effective income tax rate during the first quarter of fiscal 2018 decreased to 17.6% from 38.5% in the prior year's first quarter. The first quarter included a $1.4 million discrete benefit related to the remeasurement of tax assets and liabilities net of expected repatriation taxes on foreign operations.
Guidance
Looking ahead, NCI's internal economic indicators are tracking to expectation and year-over-year growth in both bookings and backlog support the Company's favorable outlook for fiscal 2018. For the second quarter of fiscal 2018, NCI expects revenues to be in the range of $430 to $450 million and Adjusted EBITDA to be in the range of $29 to $39 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. first quarter fiscal 2018 conference call is scheduled for Wednesday, March 7, 2018, at 9:00 a.m. ET (8:00 a.m. CT). Please dial 1-412-902-0003 or 1-877-407-0672 (toll-free) to participate in the call. To listen to a live broadcast of the call over the Internet or to review the archived call, please visit the Company's website at www.ncibuildingsystems.com. To access the taped telephone replay, please dial 1-201-612-7415 or 1-877-660-6853 (toll-free) and the passcode 13676349# when prompted. The taped replay will be available two hours after the call through March 21, 2018. A replay of the webcast will be available on the Company's website under the Event Calendar, Calls & Webcast section of the Investor Relations page of the NCI website for approximately 90 days.
About NCI Building Systems
NCI Building Systems, Inc. is one of North America's largest integrated manufacturers of metal products for the nonresidential building industry. NCI is comprised of a family of companies operating manufacturing facilities across the United States, Canada and Mexico with additional sales and distribution offices throughout the United States and Canada. For more information visit www.ncibuildingsystems.com.
Contact:
K. Darcey Matthews
Vice President, Investor Relations
281-897-7785
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "anticipate," "guidance," "plan," "potential," "expect," "should," "will," "forecast" and similar expressions are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company's actual performance to differ materially from that projected in such statements. Such forward-looking statements may include, but are not limited to, statements concerning our market commentary and expectations for new nonresidential low-rise construction starts in fiscal 2018 and our financial outlook and guidance, including our second quarter fiscal 2018 forecasted revenues and Adjusted EBITDA and other consolidated financial performance guidance. Among the factors that could cause actual results to differ materially include, but are not limited to, 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 indebtedness; our ability to generate significant cash flow required to service our existing debt, including our secured term loan facility, 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 management and other key personnel; 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
-------------------------
January 28, January 29,
2018 2017
---- ----
Sales $421,349 $391,703
Cost of sales 329,432 307,752
Gross profit 91,917 83,951
21.8% 21.4%
Engineering,
selling,
general and
administrative
expenses 74,786 69,039
Intangible
asset
amortization 2,412 2,405
Strategic
development
and
acquisition
related
costs 727 357
Restructuring
and
impairment
charges 1,094 2,264
Income from
operations 12,898 9,886
Interest
income 33 5
Interest
expense (7,492) (6,886)
Foreign
exchange
gain (loss) 471 (78)
Other income,
net 457 387
--- ---
Income before
income taxes 6,367 3,314
Provision for
income taxes 1,118 1,275
----- -----
17.6% 38.5%
Net income 5,249 2,039
===== =====
Net income
allocated to
participating
securities (38) (8)
Net income
applicable
to common
shares $5,211 $2,031
====== ======
Income per
common
share:
Basic $0.08 $0.03
Diluted $0.08 $0.03
Weighted
average
number of
common
shares
outstanding:
Basic 66,434 70,875
Diluted 66,546 71,088
Increase in
sales 7.6% 5.9%
Engineering,
selling,
general and
administrative
expenses
percentage 17.7% 17.6%
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 28, October 29,
2018 2017
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $12,420 $65,658
Restricted cash 180 136
Accounts
receivable, net 169,059 199,897
Inventories, net 200,533 198,296
Income taxes
receivable 1,244 3,617
Investments in
debt and equity
securities, at
market 6,802 6,481
Prepaid expenses
and other 33,761 31,359
Assets held for
sale 10,601 5,582
Total current assets 434,600 511,026
------- -------
Property, plant
and equipment,
net 220,465 226,995
Goodwill 148,291 148,291
Intangible
assets, net 134,743 137,148
Deferred income
taxes 2,679 2,544
Other assets,
net 5,216 5,108
Total assets $945,994 $1,031,112
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion
of long-term
debt $10,000 $ -
Note payable - 440
Accounts payable 116,567 147,772
Accrued
compensation
and benefits 47,611 59,189
Accrued interest 1,383 6,414
Other accrued
expenses 95,742 102,233
Total current liabilities 271,303 316,048
------- -------
Long-term debt,
net of deferred
financing costs
of $6,522 and
$6,857 387,625 387,290
Deferred income
taxes 2,620 4,297
Other long-term
liabilities 18,141 18,230
Total long-term liabilities 408,386 409,817
------- -------
Common stock 663 687
Additional paid-
in capital 519,224 562,277
Accumulated
deficit (244,148) (248,046)
Accumulated
other
comprehensive
loss, net (7,294) (7,531)
Treasury stock,
at cost (2,140) (2,140)
Total stockholders' equity 266,305 305,247
------- -------
Total liabilities and
stockholders' equity $945,994 $1,031,112
======== ==========
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Fiscal Three Months Ended
-------------------------
January 28, January 29,
2018 2017
---- ----
Cash flows from operating
activities:
Net income $5,249 $2,039
Adjustments to reconcile net
income to net cash from
operating activities
Depreciation and amortization 10,358 10,315
Amortization of deferred
financing costs 435 477
Share-based compensation
expense 5,870 3,042
(Gains) losses on assets, net (320) 125
Provision for doubtful accounts (20) 1,586
Provision for deferred income
taxes (1,676) 26
Changes in operating assets and
liabilities, net of effect of
acquisitions:
Accounts receivable 30,858 19,181
Inventories (2,237) (4,932)
Income taxes 2,373 (6,777)
Prepaid expenses and other (2,567) 2,157
Accounts payable (31,205) (30,199)
Accrued expenses (23,183) (27,240)
Other, net (515) (163)
---- ----
Net cash used in operating
activities (6,580) (30,363)
------ -------
Cash flows from investing
activities:
Capital expenditures (8,109) (4,120)
Proceeds from sale of property,
plant and equipment 2,249 -
----- ---
Net cash used in investing
activities (5,860) (4,120)
------ ------
Cash flows from financing
activities:
(Deposit) refund of restricted
cash (44) 117
Proceeds from stock options
exercised 1,040 1,019
Proceeds from Amended ABL
facility 43,000 30,000
Payments on Amended ABL facility (33,000) (30,000)
Payments on term loan - (10,000)
Payments on note payable (441) (431)
Payments of financing costs (275) -
Payments related to tax
withholding for share-based
compensation (4,610) (2,389)
Purchases of treasury stock (46,705) (3,533)
------- ------
Net cash used in financing
activities (41,035) (15,217)
------- -------
Effect of exchange rate changes
on cash and cash equivalents 237 86
Net decrease in cash and cash
equivalents (53,238) (49,614)
Cash and cash equivalents at
beginning of period 65,658 65,403
------ ------
Cash and cash equivalents at end
of period $12,420 $15,789
======= =======
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
-------------------------
January 28, January 29,
2018 2017
---- ----
Net income per diluted common share, GAAP basis $0.08 $0.03
Restructuring and impairment charges 0.02 0.03
Strategic development and acquisition related costs 0.01 0.00
Acceleration of CEO retirement benefits 0.07 -
Discrete tax effects of U.S. Tax Reform (0.01) -
Tax effect of applicable non-GAAP adjustments (1) (0.03) (0.01)
Adjusted net income per diluted common share (2) $0.14 $0.05
===== =====
Fiscal Three Months Ended
-------------------------
January 28, January 29,
2018 2017
---- ----
Net income applicable to common shares, GAAP basis $5,211 $2,031
Restructuring and impairment charges 1,094 2,264
Strategic development and acquisition related costs 727 357
Acceleration of CEO retirement benefits 4,600 -
Discrete tax effects of U.S. tax reform (323) -
Tax effect of applicable non-GAAP adjustments (1) (1,775) (1,022)
Adjusted net income applicable to common shares (2) $9,534 $3,630
====== ======
(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)
Trailing Trailing
Fiscal Three Months Ended Twelve Months Fiscal Three Months Ended Twelve Months
------------------------- ------------- ------------------------- -------------
May 1, July 31, October 30, January 29, January 29, April 30, July 30, October 29, January 28, January 28,
2016 2016 2016 2017 2017 2017 2017 2017 2018 2018
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total Sales:
Engineered Building Systems $138,023 $181,029 $204,208 $151,263 $674,523 $162,624 $191,910 $188,183 $156,964 $699,681
Metal Components 130,293 166,512 166,532 134,173 597,510 154,895 166,305 181,288 146,832 649,320
Insulated Metal Panels 89,433 105,694 110,001 95,195 400,323 102,937 119,730 123,542 110,794 457,003
Metal Coil Coating 79,829 96,684 95,987 88,340 360,840 86,729 95,261 98,550 88,343 368,883
------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Total sales 437,578 549,919 576,728 468,971 2,033,196 507,185 573,206 591,563 502,933 2,174,887
Less: Intersegment sales (65,331) (87,566) (96,414) (77,268) (326,579) (86,721) (103,821) (102,837) (81,584) (374,963)
------- ------- ------- ------- -------- ------- -------- -------- ------- --------
Total net sales $372,247 $462,353 $480,314 $391,703 $1,706,617 $420,464 $469,385 $488,726 $421,349 $1,799,924
External Sales
Engineered Building Systems $134,454 $175,471 $196,596 $145,021 $651,542 $154,456 $182,164 $178,222 $148,288 $663,130
Metal Components 111,748 140,560 139,968 115,557 507,833 133,290 140,639 155,183 127,528 556,640
Insulated Metal Panels 79,882 94,059 92,648 82,441 349,030 86,773 98,026 105,064 97,513 387,376
Metal Coil Coating 46,163 52,263 51,102 48,684 198,212 45,945 48,556 50,257 48,020 192,778
------ ------ ------ ------ ------- ------ ------ ------ ------ -------
Total external sales $372,247 $462,353 $480,314 $391,703 $1,706,617 $420,464 $469,385 $488,726 $421,349 $1,799,924
Operating Income
Engineered Building Systems $7,193 $19,561 $22,830 $6,503 $56,087 $6,894 $14,948 $13,043 $8,263 $43,148
Metal Components 13,071 26,803 21,254 12,376 73,504 19,997 23,276 23,119 17,089 83,481
Insulated Metal Panels 2,782 8,911 7,513 2,192 21,398 19,377 11,468 14,895 7,071 52,811
Metal Coil Coating 6,686 10,531 9,310 6,706 33,233 6,227 7,107 1,419 5,376 20,129
Corporate (19,138) (22,271) (21,516) (17,891) (80,816) (20,023) (22,702) (19,151) (24,901) (86,777)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total operating income $10,594 $43,535 $39,391 $9,886 $103,406 $32,472 $34,097 $33,325 $12,898 $112,792
Adjusted Operating Income (1)
Engineered Building Systems $6,415 $19,615 $23,103 $8,413 $57,546 $7,217 $15,889 $13,738 $9,572 $46,416
Metal Components 13,503 27,005 21,357 12,681 74,546 19,706 23,188 23,188 15,686 81,768
Insulated Metal Panels 2,986 8,979 7,917 2,192 22,074 10,387 11,711 15,696 8,655 46,449
Metal Coil Coating 6,725 10,531 9,310 6,706 33,272 6,227 7,107 7,419 5,376 26,129
Corporate (18,234) (21,050) (20,829) (17,485) (77,598) (19,899) (21,405) (18,786) (19,970) (80,060)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total adjusted operating income $11,395 $45,080 $40,858 $12,507 $109,840 $23,638 $36,490 $41,255 $19,319 $120,702
(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 (Continued)
(In thousands)
(Unaudited)
Trailing Trailing
Fiscal Three Months Ended Twelve Months Fiscal Three Months Ended Twelve Months
------------------------- ------------- ------------------------- -------------
May 1, July 31, October 30, January 29, January 29, April 30, July 30, October 29, January 28, January 28,
2016 2016 2016 2017 2017 2017 2017 2017 2018 2018
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Adjusted EBITDA (2)
Engineered Building Systems $9,789 $21,122 $25,140 $10,648 $66,699 $9,377 $19,435 $15,242 $12,382 $56,436
Metal Components 14,820 28,462 22,736 14,043 80,061 21,060 24,509 24,694 17,315 87,578
Insulated Metal Panels 7,126 13,368 12,113 6,619 39,226 14,985 16,016 20,794 12,770 64,565
Metal Coil Coating 8,891 12,747 11,159 8,843 41,640 8,236 9,170 9,484 7,434 34,324
Corporate (15,171) (17,871) (17,486) (13,980) (64,508) (16,689) (18,756) (16,273) (17,026) (68,744)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total adjusted EBITDA $25,455 $57,828 $53,662 $26,173 $163,118 $36,969 $50,374 $53,941 $32,875 $174,159
Operating Income Margin
Engineered Building Systems 5.2 % 10.8 % 11.2 % 4.3 % 8.3 % 4.2 % 7.8 % 6.9 % 5.3 % 6.2 %
Metal Components 10.0 % 16.1 % 12.8 % 9.2 % 12.3 % 12.9 % 14.0 % 12.8 % 11.6 % 12.9 %
Insulated Metal Panels 3.1 % 8.4 % 6.8 % 2.3 % 5.3 % 18.8 % 9.6 % 12.1 % 6.4 % 11.6 %
Metal Coil Coating 8.4 % 10.9 % 9.7 % 7.6 % 9.2 % 7.2 % 7.5 % 1.4 % 6.1 % 5.5 %
Consolidated 2.8 % 9.4 % 8.2 % 2.5 % 6.1 % 7.7 % 7.3 % 6.8 % 3.1 % 6.3 %
Adjusted Operating Income Margin
Engineered Building Systems 4.6 % 10.8 % 11.3 % 5.6 % 8.5 % 4.4 % 8.3 % 7.3 % 6.1 % 6.6 %
Metal Components 10.4 % 16.2 % 12.8 % 9.5 % 12.5 % 12.7 % 13.9 % 12.8 % 10.7 % 12.6 %
Insulated Metal Panels 3.3 % 8.5 % 7.2 % 2.3 % 5.5 % 10.1 % 9.8 % 12.7 % 7.8 % 10.2 %
Metal Coil Coating 8.4 % 10.9 % 9.7 % 7.6 % 9.2 % 7.2 % 7.5 % 7.5 % 6.1 % 7.1 %
Consolidated 3.1 % 9.8 % 8.5 % 3.2 % 6.4 % 5.6 % 7.8 % 8.4 % 4.6 % 6.7 %
Adjusted EBITDA Margin
Engineered Building Systems 7.1 % 11.7 % 12.3 % 7.0 % 9.9 % 5.8 % 10.1 % 8.1 % 7.9 % 8.1 %
Metal Components 11.4 % 17.1 % 13.7 % 10.5 % 13.4 % 13.6 % 14.7 % 13.6 % 11.8 % 13.5 %
Insulated Metal Panels 8.0 % 12.6 % 11.0 % 7.0 % 9.8 % 14.6 % 13.4 % 16.8 % 11.5 % 14.1 %
Metal Coil Coating 11.1 % 13.2 % 11.6 % 10.0 % 11.5 % 9.5 % 9.6 % 9.6 % 8.4 % 9.3 %
Consolidated 6.8 % 12.5 % 11.2 % 6.7 % 9.6 % 8.8 % 10.7 % 11.0 % 7.8 % 9.7 %
(2) 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.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Consolidated
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Total Net Sales $420,464 $469,385 $488,726 $421,349 $1,799,924
Operating Income, GAAP 32,472 34,097 33,325 12,898 112,792
Restructuring and impairment 315 1,009 1,709 1,094 4,127
Strategic development and
acquisition related costs 124 1,297 193 727 2,341
Acceleration of CEO retirement
benefits - - - 4,600 4,600
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 23,638 36,490 41,255 19,319 120,702
Other income and expense 449 1,322 (62) 928 2,637
Depreciation and amortization 10,062 10,278 10,664 10,358 41,362
Share-based compensation
expense 2,820 2,284 2,084 2,270 9,458
Adjusted EBITDA $36,969 $50,374 $53,941 $32,875 $174,159
Year over year growth, Total Net
Sales 13.0 % 1.5 % 1.8 % 7.6 % 5.5 %
Operating Income Margin 7.7 % 7.3 % 6.8 % 3.1 % 6.3 %
Adjusted Operating Income
Margin 5.6 % 7.8 % 8.4 % 4.6 % 6.7 %
Adjusted EBITDA Margin 8.8 % 10.7 % 11.0 % 7.8 % 9.7 %
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Total Net Sales $372,247 $462,353 $480,314 $391,703 $1,706,617
Operating Income, GAAP 10,594 43,535 39,391 9,886 103,406
Restructuring and impairment 1,149 778 815 2,264 5,006
Strategic development and
acquisition related costs 579 819 590 357 2,345
(Gain) loss on sale of assets
and asset recovery (927) (52) 62 - (917)
Adjusted Operating Income 11,395 45,080 40,858 12,507 109,840
Other income and expense 827 (508) (192) 309 436
Depreciation and amortization 10,765 10,595 9,815 10,315 41,490
Share-based compensation
expense 2,468 2,661 3,181 3,042 11,352
Adjusted EBITDA $25,455 $57,828 $53,662 $26,173 $163,118
Operating Income Margin 2.8 % 9.4 % 8.2 % 2.5 % 6.1 %
Adjusted Operating Income
Margin 3.1 % 9.8 % 8.5 % 3.2 % 6.4 %
Adjusted EBITDA Margin 6.8 % 12.5 % 11.2 % 6.7 % 9.6 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Engineered Building Systems
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Total Sales $162,624 $191,910 $188,183 $156,964 $699,681
External Sales 154,456 182,164 178,222 148,288 663,130
Operating Income, GAAP 6,894 14,948 13,043 8,263 43,148
Restructuring and impairment 186 941 695 1,136 2,958
Strategic development and
acquisition related costs - - - 173 173
Loss on sale of assets and
asset recovery 137 - - - 137
Adjusted Operating Income 7,217 15,889 13,738 9,572 46,416
Other income and expense (125) 1,291 (694) 733 1,205
Depreciation and amortization 2,285 2,255 2,198 2,077 8,815
Adjusted EBITDA $9,377 $19,435 $15,242 $12,382 $56,436
Year over year growth, Total
sales 17.8 % 6.0 % (7.8)% 3.8 % 3.7 %
Year over year growth,
External Sales 14.9 % 3.8 % (9.3)% 2.3 % 1.8 %
Operating Income Margin 4.2 % 7.8 % 6.9 % 5.3 % 6.2 %
Adjusted Operating Income
Margin 4.4 % 8.3 % 7.3 % 6.1 % 6.6 %
Adjusted EBITDA Margin 5.8 % 10.1 % 8.1 % 7.9 % 8.1 %
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Total Sales $138,023 $181,029 $204,208 $151,263 $674,523
External Sales 134,454 175,471 196,596 145,021 651,542
Operating Income, GAAP 7,193 19,561 22,830 6,503 56,087
Restructuring and impairment 149 106 211 1,910 2,376
(Gain) loss on sale of assets
and asset recovery (927) (52) 62 - (917)
Adjusted Operating Income 6,415 19,615 23,103 8,413 57,546
Other income and expense 938 (931) (362) (41) (396)
Depreciation and amortization 2,436 2,438 2,399 2,276 9,549
Adjusted EBITDA $9,789 $21,122 $25,140 $10,648 $66,699
Operating Income Margin 5.2 % 10.8 % 11.2 % 4.3 % 8.3 %
Adjusted Operating Income
Margin 4.6 % 10.8 % 11.3 % 5.6 % 8.5 %
Adjusted EBITDA Margin 7.1 % 11.7 % 12.3 % 7.0 % 9.9 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Metal Components
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Total Sales $154,895 $166,305 $181,288 $146,832 $649,320
External Sales 133,290 140,639 155,183 127,528 556,640
Operating Income, GAAP 19,997 23,276 23,119 17,089 83,481
Restructuring and impairment 129 60 69 (1,403) (1,145)
Gain on insurance recovery (420) (148) - - (568)
Adjusted Operating Income 19,706 23,188 23,188 15,686 81,768
Other income and expense 52 55 84 53 244
Depreciation and amortization 1,302 1,266 1,422 1,576 5,566
Adjusted EBITDA $21,060 $24,509 $24,694 $17,315 $87,578
Year over year growth, Total
sales 18.9 % (0.1)% 8.9 % 9.4 % 8.7 %
Year over year growth,
External Sales 19.3 % 0.1 % 10.9 % 10.4 % 9.6 %
Operating Income Margin 12.9 % 14.0 % 12.8 % 11.6 % 12.9 %
Adjusted Operating Income
Margin 12.7 % 13.9 % 12.8 % 10.7 % 12.6 %
Adjusted EBITDA Margin 13.6 % 14.7 % 13.6 % 11.8 % 13.5 %
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Total Sales $130,293 $166,512 $166,532 $134,173 $597,510
External Sales 111,748 140,560 139,968 115,557 507,833
Operating Income, GAAP 13,071 26,803 21,254 12,376 73,504
Restructuring and impairment 432 202 103 305 1,042
Adjusted Operating Income 13,503 27,005 21,357 12,681 74,546
Other income and expense 167 92 (27) 28 260
Depreciation and amortization 1,150 1,365 1,406 1,334 5,255
Adjusted EBITDA $14,820 $28,462 $22,736 $14,043 $80,061
Operating Income Margin 10.0 % 16.1 % 12.8 % 9.2 % 12.3 %
Adjusted Operating Income
Margin 10.4 % 16.2 % 12.8 % 9.5 % 12.5 %
Adjusted EBITDA Margin 11.4 % 17.1 % 13.7 % 10.5 % 13.4 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Insulated Metal Panels
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Total Sales $102,937 $119,730 $123,542 $110,794 $457,003
External Sales 86,773 98,026 105,064 97,513 387,376
Operating Income, GAAP 19,377 11,468 14,895 7,071 52,811
Restructuring and impairment - 8 683 1,284 1,975
Strategic development and
acquisition related costs - - 90 300 390
Gain on insurance recovery (9,181) - - - (9,181)
Unreimbursed business
interruption costs 191 235 28 - 454
Adjusted Operating Income 10,387 11,711 15,696 8,655 46,449
Other income and expense 340 (211) 356 (273) 212
Depreciation and amortization 4,258 4,516 4,742 4,388 17,904
Adjusted EBITDA $14,985 $16,016 $20,794 $12,770 $64,565
Year over year growth, Total
sales 15.1 % 13.3 % 12.3 % 16.4 % 14.2 %
Year over year growth, External
Sales 8.6 % 4.2 % 13.4 % 18.3 % 11.0 %
Operating Income Margin 18.8 % 9.6 % 12.1 % 6.4 % 11.6 %
Adjusted Operating Income
Margin 10.1 % 9.8 % 12.7 % 7.8 % 10.2 %
Adjusted EBITDA Margin 14.6 % 13.4 % 16.8 % 11.5 % 14.1 %
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Total Sales $89,433 $105,694 $110,001 $95,195 $400,323
External Sales 79,882 94,059 92,648 82,441 349,030
Operating Income, GAAP 2,782 8,911 7,513 2,192 21,398
Restructuring and impairment 176 59 404 - 639
Strategic development and
acquisition related costs 28 9 - - 37
Adjusted Operating Income 2,986 8,979 7,917 2,192 22,074
Other income and expense (543) 32 270 35 (206)
Depreciation and amortization 4,683 4,357 3,926 4,392 17,358
Adjusted EBITDA $7,126 $13,368 $12,113 $6,619 $39,226
Operating Income Margin 3.1 % 8.4 % 6.8 % 2.3 % 5.3 %
Adjusted Operating Income
Margin 3.3 % 8.5 % 7.2 % 2.3 % 5.5 %
Adjusted EBITDA Margin 8.0 % 12.6 % 11.0 % 7.0 % 9.8 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Metal Coil Coating
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Total Sales $86,729 $95,261 $98,550 $88,343 $368,883
External Sales 45,945 48,556 50,257 48,020 192,778
Operating Income, GAAP 6,227 7,107 1,419 5,376 20,129
Goodwill impairment - - 6,000 - 6,000
Adjusted Operating Income 6,227 7,107 7,419 5,376 26,129
Depreciation and amortization 2,009 2,063 2,065 2,058 8,195
Adjusted EBITDA $8,236 $9,170 $9,484 $7,434 $34,324
Year over year growth, Total
sales 8.6 % (1.5)% 2.7% 0.0 % 2.2 %
Year over year growth,
External Sales (0.5)% (7.1)% (1.7)% (1.4)% (2.7)%
Operating Income Margin 7.2 % 7.5 % 1.4 % 6.1 % 5.5 %
Adjusted Operating Income
Margin 7.2 % 7.5 % 7.5 % 6.1 % 7.1 %
Adjusted EBITDA Margin 9.5 % 9.6 % 9.6 % 8.4 % 9.3 %
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Total Sales $79,829 $96,684 $95,987 $88,340 $360,840
External Sales 46,163 52,263 51,102 48,684 198,212
Operating Income, GAAP 6,686 10,531 9,310 6,706 33,233
Restructuring and impairment 39 - - - 39
Adjusted Operating Income 6,725 10,531 9,310 6,706 33,272
Other income and expense - 2 - 31 33
Depreciation and amortization 2,166 2,214 1,849 2,106 8,335
Adjusted EBITDA $8,891 $12,747 $11,159 $8,843 $41,640
Operating Income Margin 8.4 % 10.9 % 9.7 % 7.6 % 9.2 %
Adjusted Operating Income
Margin 8.4 % 10.9 % 9.7 % 7.6 % 9.2 %
Adjusted EBITDA Margin 11.1 % 13.2 % 11.6 % 10.0 % 11.5 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Corporate
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
April 30, July 30, October 29, January 28, January 28,
2017 2017 2017 2018 2018
---- ---- ---- ---- ----
Operating Loss, GAAP $(20,023) $(22,702) $(19,151) $(24,901) $(86,777)
Restructuring and impairment - - 262 77 339
Strategic development and
acquisition related costs 124 1,297 103 254 1,778
Acceleration of CEO
retirement benefits - - - 4,600 4,600
Adjusted Operating Loss (19,899) (21,405) (18,786) (19,970) (80,060)
Other income and expense 182 187 192 415 976
Depreciation and
amortization 208 178 237 259 882
Share-based compensation
expense 2,820 2,284 2,084 2,270 9,458
Adjusted EBITDA $(16,689) $(18,756) $(16,273) $(17,026) $(68,744)
Trailing
Fiscal Three Months Ended Twelve Months
------------------------- -------------
May 1, July 31, October 30, January 29, January 29,
2016 2016 2016 2017 2017
---- ---- ---- ---- ----
Operating Loss, GAAP $(19,138) $(22,271) $(21,516) $(17,891) $(80,816)
Restructuring and impairment 353 411 97 49 910
Strategic development and
acquisition related costs 551 810 590 357 2,308
Adjusted Operating Loss (18,234) (21,050) (20,829) (17,485) (77,598)
Other income and expense 265 297 (73) 256 745
Depreciation and
amortization 330 221 235 207 993
Share-based compensation
expense 2,468 2,661 3,181 3,042 11,352
Adjusted EBITDA $(15,171) $(17,871) $(17,486) $(13,980) $(64,508)
View original content:http://www.prnewswire.com/news-releases/nci-building-systems-reports-first-quarter-2018-results-300609323.html
SOURCE NCI Building Systems, Inc.
