NCI Building Systems Reports Second Quarter 2018 Results
HOUSTON, June 5, 2018 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) ("NCI" or the "Company") today reported financial results for its second fiscal quarter ended April 29, 2018.
Second Quarter 2018 Financial and Operational Highlights:
-- Sales rose 8.7% to $457.1 million for the quarter, compared to $420.5
million in the prior year's second quarter
-- Gross profit was $104.1 million or 22.8% of sales, compared to $100.8
million or 24.0% of sales in the second quarter of 2017
-- The Company improved and replaced its debt structure, reducing its
current effective cash interest rate from approximately 7.0% to 3.6% and
extending the term to 2025
-- Net income was a loss of $5.7 million for the quarter, compared to net
income of $17.0 million in the prior year's second quarter. Adjusted Net
Income was $16.4 million this quarter, compared to $11.5 million in the
prior year's second quarter
-- Net income per diluted common share for the quarter was a loss of $0.09,
compared to income of $0.24 in the second quarter of fiscal 2017. There
were several previously announced special items, which while positive
for future operations including the debt refinancing and the sale of
CENTRIA's China operations, resulted in charges during the quarter.
Adjusted Net Income was $0.25 per diluted common share, an increase of
56.3%, compared to $0.16 in the prior year's second quarter
Fiscal Three Months Ended
-------------------------
April 29, 2018 April 30, 2017
-------------- --------------
Net income
(loss) per
diluted
common
share, GAAP
basis $(0.09) $0.24
Loss on
extinguishment
of debt 0.33 0.00
Loss on
disposition
of a
business 0.10 0.00
Gain on
insurance
recovery 0.00 (0.13)
Other items
and related
tax effect
of
adjustments (0.09) 0.05
----- ----
Adjusted net
income per
diluted
common share $0.25 $0.16
----- -----
-- Adjusted EBITDA was $39.7 million, or 8.7% of revenues, for the quarter,
compared to $37.0 million, or 8.8% of revenues, in the prior year's
second quarter
-- Total consolidated backlog increased to $631.6 million at quarter end,
up 10.8% year-over-year
"We are pleased with the strong second quarter performance of all our business segments, as we successfully maintained our commercial discipline in a rising cost environment," said Donald R. Riley, President and Chief Executive Officer. "NCI's solid backlog and bookings continue to support our favorable outlook for 2018, and our key economic indicators continue to track to our expectations for year-over-year growth.
"We are making good progress executing on our advanced manufacturing and continuous improvement initiatives. We believe the successful execution of these initiatives and the visibility provided by our backlog will position NCI well for the remainder of this fiscal year. Additionally during the quarter, we executed on two key priorities for the Company in improving our capital structure and completing the sale of our CENTRIA China business. These actions have simplified our operations, reduced risk and strengthened our balance sheet."
Second Quarter 2018 Results
Second quarter of fiscal 2018 sales increased to $457.1 million, up 8.7%, from $420.5 million in last year's second fiscal quarter, primarily due to continued commercial discipline in the pass-through of higher material costs across our segments, combined with volume growth in both the Metal Components and Insulated Metal Panel segments and growth in package volumes in the Metal Coil Coating segment.
Gross profit increased 3.2% to $104.1 million this quarter, compared to $100.8 million in the second quarter of fiscal 2017 and was up sequentially from $91.9 million in the first quarter of fiscal 2018. Gross profit margins were 22.8% for the second quarter of fiscal 2018, compared to 24.0% in the second quarter of fiscal 2017 and was up sequentially 100 basis points from 21.8% in the first quarter of fiscal 2018. Gross margins in the second quarter were lower than the second quarter of the prior year primarily as a result of less favorable product mix in the IMP segment and incremental manufacturing costs in the Metal Coil Coating segment related to ramping-up additional shifts in preparation for higher volumes expected in the second half of fiscal 2018.
Engineering, selling, general and administrative ("ESG&A") expenses were $74.4 million for the quarter, compared to $75.1 million in the prior year's second fiscal quarter. As a percentage of revenues, ESG&A expenses were 16.3% in the fiscal 2018 second quarter compared to 17.9% in the prior year's second fiscal quarter. The year-over-year decline in ESG&A expenses reflected the Company's ongoing cost reduction initiatives, partially offset by the impact of wage and information technology cost increases.
Operating income for the quarter was $19.0 million, including a previously disclosed $6.7 million charge related to the sale of CENTRIA's manufacturing facility in China, compared to $32.5 million in the second quarter 2017. Adjusted Operating Income, a non-GAAP financial measure which excludes certain special items, increased 15.3% to $27.3 million in the current quarter, compared to $23.6 million in the same period last year.
Net loss applicable to common shares in the quarter was $5.7 million, or $0.09 per diluted common share, compared to net income of $16.9 million, or $0.24 per diluted common share in the prior year's second quarter. Income was impacted by the following special items: a $21.9 million charge related to the extinguishment and refinancing of a portion of the Company's debt; a $6.7 million charge on the disposition of CENTRIA's China operations; a $1.1 million charge for strategic development and acquisition related costs and $0.5 million of restructuring and impairment charges, partially offset by the associated tax effect of these items. The second quarter of fiscal 2017 included a $9.6 million special gain on an insurance recovery, partially offset by the related tax effects. Excluding the impact of these special items, second quarter 2018 Adjusted Net Income, a non-GAAP measure, was $16.4 million, or $0.25 per diluted common share, compared to $11.5 million, or $0.16 per diluted common share, in the prior year's second 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 $39.7 million this quarter, compared to $37.0 million in the prior year's second 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 second quarter were $35.3 million, compared to $49.7 million at the end of the second quarter of fiscal 2017. Cash and cash equivalents increased sequentially $22.9 million from $12.4 million at the end of the first quarter of fiscal 2018 due to operating earnings and improved utilization of accounts payable. NCI's net debt leverage ratio (net debt/EBITDA) at the end of the second quarter was 2.2x. As of April 29, 2018, the Company's $150.0 million asset based lending (ABL) facility remained undrawn.
Second Quarter 2018 Segment Performance
Sales in the Engineered Building Systems segment were $167.2 million in the second quarter of fiscal 2018, compared to $162.6 million in the prior year period, primarily as a result of commercial discipline passing through higher input costs, partially offset by lower tonnage volumes. Operating income increased 34.5% to $9.3 million this quarter, compared to $6.9 million in the prior year's second quarter. Adjusted Operating Income, a non-GAAP measure, increased 32.3% to $9.6 million this quarter, compared to $7.2 million in the second quarter 2017. Operating margins increased as a result of reduced ESG&A costs and an emphasis on order profitability over volumes.
The Metal Components segment generated $168.5 million in sales during the quarter, an increase of 8.8% from $154.9 million in the prior year's second quarter, led by higher external volumes across the segment and the disciplined pass-through of increasing input costs, despite a less favorable mix in the overhead doors product lines. Operating income was $22.1 million in the second fiscal quarter of 2018 compared to $20.0 million in the same period last year. Adjusted Operating Income was $22.2 million in the quarter, compared to $19.7 million in the prior year's second quarter. The Metal Components segment's operating margins increased as a result of improved operating leverage on higher volumes.
The Insulated Metal Panels segment generated $113.4 million in sales during the quarter, an increase of 10.2% from $102.9 million in the prior year's second quarter, as a result of commercial discipline emphasizing project profitability over volume in a period of increasing input costs. Operating income was $1.5 million for the quarter compared to $19.4 million in the second quarter of 2017. The second quarter of fiscal 2018 had a $6.7 million special charge for the disposition of the CENTRIA's China business and the second quarter of fiscal 2017 had a special gain of $9.2 million for an insurance recovery. Adjusted Operating Income was $8.4 million, compared to $10.4 million in the same period last year. The IMP segment's operating margins decreased from the prior year as a result of the special items noted above and a change in product mix. The reduction in year-over-year margins was expected due to the unusually large amount of higher margin architectural panels shipped in the prior year quarter.
Sales in the Metal Coil Coating segment were $95.2 million during the second quarter of fiscal 2018, an increase of 9.8% from $86.7 million in the prior year's second quarter, as a result of higher volumes in package sales and the pass-through of rising material costs. Operating income and Adjusted Operating Income were both $7.1 million in the second quarter of fiscal 2018 compared to $6.2 million in the second quarter of fiscal 2017, respectively. Operating margins in the Metal Coil Coating segment improved as a result of lower ESG&A costs, partially offset by lower manufacturing efficiency due to ramping-up additional shifts to support increasing activity levels.
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 the volume of nonresidential low-rise construction starts when the three leading indicators are combined and then seasonally adjusted. Based on the combined forward projection of these metrics, and assuming a 9- to 14-month historical lag for each metric, the Company continues to expect new nonresidential low-rise construction starts in the Company's addressable market for its legacy businesses to grow 2.0% to 4.0% in fiscal 2018.
Guidance
Looking ahead, NCI's key 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 third quarter of fiscal 2018, NCI expects revenues to be in the range of $525 to $545 million and Adjusted EBITDA to be in the range of $56 to $66 million.
The Company has provided additional detailed financial guidance in the quarterly supplemental presentation that can be found at www.ncibuildingsystems.com under the "Investors" section.
Conference Call Information
The NCI Building Systems, Inc. second quarter fiscal 2018 conference call is scheduled for Wednesday, June 6, 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 13680060# when prompted. The taped replay will be available two hours after the call through June 20, 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 third 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; our substantial indebtedness and our ability to incur substantially more indebtedness; our ability to generate the 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 Fiscal Six Months Ended
------------------------- -----------------------
April 29, April 30, April 29, April 30,
2018 2017 2018 2017
---- ---- ---- ----
Sales $457,069 $420,464 $878,418 $812,167
Cost of sales 352,986 319,625 682,418 627,377
------- ------- ------- -------
Gross profit 104,083 100,839 196,000 184,790
22.8% 24.0% 22.3% 22.8%
Engineering, selling, general and administrative
expenses 74,406 75,124 149,192 144,164
Intangible asset amortization 2,413 2,405 4,825 4,810
Restructuring and impairment charges 488 315 1,582 2,578
Strategic development and acquisition related costs 1,134 124 1,861 481
Loss on disposition of business 6,686 - 6,686 -
Gain on insurance recovery - (9,601) - (9,601)
Income from operations 18,956 32,472 31,854 42,358
Interest income 37 138 70 144
Interest expense (4,849) (7,479) (12,341) (14,365)
Foreign exchange (loss) gain (305) 127 166 50
Loss on extinguishment of debt (21,875) - (21,875) -
Other income, net 270 322 727 708
--- --- --- ---
Income (loss) before income taxes (7,766) 25,580 (1,399) 28,895
(Benefit) provision for income taxes (2,082) 8,606 (964) 9,882
------ ----- ---- -----
26.8% 33.6% 68.9% 34.2%
Net income (loss) (5,684) 16,974 (435) 19,013
====== ====== ==== ======
Net income allocated to participating securities - (115) - (131)
Net income (loss) applicable to common shares $(5,684) $16,859 $(435) $18,882
======= ======= ===== =======
Check
Income (loss) per common share:
Basic $(0.09) $0.24 $(0.01) $0.27
Diluted $(0.09) $0.24 $(0.01) $0.27
Weighted average number of common shares
outstanding:
Basic 66,210 70,988 66,311 70,933
Diluted 66,210 71,122 66,311 71,107
Increase in sales 8.7% 13.0% 8.2% 9.4%
Engineering, selling, general and administrative
expenses percentage
16.3% 17.9% 17.0% 17.8%
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
April 29, October 29,
2018 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $35,335 $65,658
Restricted cash 177 136
Accounts receivable, net 180,393 199,897
Inventories, net 221,369 198,296
Income taxes receivable 6,439 3,617
Investments in debt and equity securities, at market 6,332 6,481
Prepaid expenses and other 36,551 31,359
Assets held for sale 10,102 5,582
Total current assets 496,698 511,026
------- -------
Property, plant and equipment, net 221,398 226,995
Goodwill 148,291 148,291
Intangible assets, net 132,338 137,148
Deferred income taxes 2,513 2,544
Other assets, net 5,369 5,108
Total assets $1,006,607 $1,031,112
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $1,656 $440
Accounts payable 157,819 147,772
Accrued compensation and benefits 49,850 59,189
Accrued interest 1,464 6,414
Other accrued expenses 104,475 102,233
Total current liabilities 315,264 316,048
------- -------
Long-term debt, net of deferred financing costs of $6,043
and $6,857 408,957 387,290
Deferred income taxes 1,928 4,297
Other long-term liabilities 18,134 18,230
Total long-term liabilities 429,019 409,817
------- -------
Common stock 663 687
Additional paid-in capital 521,190 562,277
Accumulated deficit (249,832) (248,046)
Accumulated other comprehensive loss, net (7,555) (7,531)
Treasury stock, at cost (2,142) (2,140)
Total stockholders' equity 262,324 305,247
------- -------
Total liabilities and stockholders' equity $1,006,607 $1,031,112
========== ==========
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Fiscal Six Months Ended
-----------------------
April 29, April 30,
2018 2017
---- ----
Cash flows from operating
activities:
Net income (loss) $(435) $19,013
Adjustments to reconcile net
income (loss) to net cash from
operating activities
Depreciation and amortization 20,800 20,378
Amortization of deferred
financing costs 781 954
Loss on extinguishment of debt 21,875 -
Share-based compensation expense 7,868 5,862
Gain on insurance recovery - (9,601)
Loss on disposition of business 6,192 -
(Gains) losses on assets, net (250) 262
Provision for doubtful accounts (44) 1,406
Benefit for deferred income taxes (1,676) (113)
Changes in operating assets and
liabilities, net of effect of
acquisitions:
Accounts receivable 17,060 12,232
Inventories (24,920) (8,617)
Income taxes (2,822) 982
Prepaid expenses and other (4,182) (1,875)
Accounts payable 12,686 (21,737)
Accrued expenses (12,016) (11,068)
Other, net (931) (189)
---- ----
Net cash provided by operating
activities 39,986 7,889
------ -----
Cash flows from investing
activities:
Capital expenditures (16,897) (11,556)
Proceeds from sale of property,
plant and equipment 2,678 2,533
Business disposition, net (4,415) -
Proceeds from insurance - 420
--- ---
Net cash used in investing
activities (18,634) (8,603)
------- ------
Cash flows from financing
activities:
(Deposit) refund of restricted
cash (41) 240
Proceeds from stock options
exercised 1,040 1,196
Proceeds from ABL facility 65,000 35,000
Payments on ABL facility (65,000) (35,000)
Proceeds from term loan 415,000 -
Payments on term loan (144,147) (10,000)
Payments on senior notes (265,470) -
Payments on note payable (441) (458)
Payments of financing costs (6,275) -
Payments related to tax
withholding for share-based
compensation (4,612) (2,389)
Purchases of treasury stock (46,705) (3,533)
------- ------
Net cash used in financing
activities (51,651) (14,944)
------- -------
Effect of exchange rate changes
on cash and cash equivalents (24) (63)
Net decrease in cash and cash
equivalents (30,323) (15,721)
Cash and cash equivalents at
beginning of period 65,658 65,403
------ ------
Cash and cash equivalents at end
of period $35,335 $49,682
======= =======
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON
(In thousands, except per share data)
(Unaudited)
Fiscal Three Months Ended Fiscal Six Months Ended
------------------------- -----------------------
April 29, April 30, April 29, April 30,
2018 2017 2018 2017
---- ---- ---- ----
Net income (loss) per diluted common share, GAAP basis $(0.09) $0.24 $(0.01) $0.27
Loss on extinguishment of debt 0.33 0.00 0.33 -
Loss on disposition of business 0.10 0.00 0.10 -
Restructuring and impairment charges 0.01 0.00 0.02 0.04
Strategic development and acquisition related costs 0.02 0.00 0.03 0.01
Acceleration of CEO retirement benefits - - 0.07 -
Gain on insurance recovery - (0.13) - (0.14)
Tax effect of applicable non-GAAP adjustments (1) (0.12) 0.05 (0.15) 0.03
Adjusted net income per diluted common share (2) $0.25 $0.16 $0.39 $0.21
===== ===== ===== =====
Fiscal Three Months Ended Fiscal Six Months Ended
------------------------- -----------------------
April 29, April 30, April 29, April 30,
2018 2017 2018 2017
---- ---- ---- ----
Net income (loss) applicable to common shares, GAAP basis $(5,684) $16,859 $(435) $18,882
Loss on extinguishment of debt 21,875 - 21,875 -
Loss on disposition of business 6,686 - 6,686 -
Restructuring and impairment charges 488 315 1,582 2,578
Strategic development and acquisition related costs 1,134 124 1,861 481
Acceleration of CEO retirement benefits - - 4,600 -
Gain on insurance recovery - (9,601) - (9,601)
Other, net - 328 (323) 328
Tax effect of applicable non-GAAP adjustments (1) (8,059) 3,445 (9,883) 2,423
Adjusted net income applicable to common shares (2) $16,440 $11,470 $25,963 $15,091
======= ======= ======= =======
(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 Ended Fiscal Six Months Ended
------------------------- -----------------------
April 29, April 30, April 29, April 30,
2018 2017 2018 2017
---- ---- ---- ----
% of % of % % of % of %
Total Total Change Total Total Change
Sales Sales Sales Sales
Total Sales
Engineered Building Systems $167,240 31 $162,624 32 2.8% $324,204 31 $313,887 32 3.3%
Metal Components 168,456 31 154,895 31 8.8% 315,288 30 289,068 30 9.1%
Insulated Metal Panels 113,413 21 102,937 20 10.2% 224,207 21 198,132 20 13.2%
Metal Coil Coating 95,190 17 86,729 17 9.8% 183,533 18 175,069 18 4.8%
------ --- ------ --- --- ------- --- ------- --- ---
Total sales 544,299 100 507,185 100 7.3% 1,047,232 100 976,156 100 7.3%
Less: Intersegment sales (87,230) 16 (86,721) 17 0.6% (168,814) 16 (163,989) 17 2.9%
------- --- ------- --- --- -------- --- -------- --- ---
Total net sales $457,069 84 $420,464 83 8.7% $878,418 84 $812,167 83 8.2%
External Sales % of % of % of % of
Sales Sales Sales Sales
Engineered Building Systems $157,136 34 $154,456 37 1.7% $305,424 35 $299,477 37 2.0%
Metal Components 147,661 32 133,290 31 10.8% 275,189 31 248,847 30 10.6%
Insulated Metal Panels 99,792 22 86,773 21 15.0% 197,305 23 169,214 21 16.6%
Metal Coil Coating 52,480 12 45,945 11 14.2% 100,500 11 94,629 12 6.2%
------ --- ------ --- ---- ------- --- ------ --- ---
Total external sales $457,069 100 $420,464 100 8.7% $878,418 100 $812,167 100 8.2%
Operating Income % of % of % of % of
Sales Sales Sales Sales
Engineered Building Systems $9,271 6 $6,894 4 34.5% $17,534 5 $13,397 4 30.9%
Metal Components 22,082 13 19,997 13 10.4% 39,171 12 32,373 11 21.0%
Insulated Metal Panels 1,540 1 19,377 19 -92.1% 8,611 4 21,569 11 -60.1%
Metal Coil Coating 7,129 7 6,227 7 14.5% 12,505 7 12,933 7 -3.3%
Corporate (21,066) - (20,023) - 5.2% (45,967) - (37,914) - 21.2%
------- --- ------- --- --- ------- --- ------- --- ----
Total operating income $18,956 4 $32,472 8 -41.6% $31,854 4 $42,358 5 -24.8%
Adjusted Operating Income (1) % of % of % of % of
Sales Sales Sales Sales
Engineered Building Systems $9,551 6 $7,217 4 32.3% $19,123 6 $15,630 5 22.3%
Metal Components 22,202 13 19,706 13 12.7% 37,888 12 32,387 11 17.0%
Insulated Metal Panels 8,375 7 10,387 10 -19.4% 17,030 8 12,579 6 35.4%
Metal Coil Coating 7,129 7 6,227 7 14.5% 12,505 7 12,933 7 -3.3%
Corporate (19,993) - (19,899) - 0.5% (39,963) - (37,384) - 6.9%
------- --- ------- --- --- ------- --- ------- --- ---
Total adjusted operating
income $27,264 6 $23,638 6 15.3% $46,583 5 $36,145 4 28.9%
Adjusted EBITDA (2) % of % of % of % of
Sales Sales Sales Sales
Engineered Building Systems $11,786 7 $9,377 6 25.7% $24,168 7 $20,025 6 20.7%
Metal Components 23,713 14 21,060 14 12.6% 41,028 13 35,103 12 16.9%
Insulated Metal Panels 12,933 11 14,985 15 -13.7% 25,703 11 21,604 11 19.0%
Metal Coil Coating 9,214 10 8,236 9 11.9% 16,648 9 17,079 10 -2.5%
Corporate (17,976) - (16,689) - 7.7% (35,002) - (30,669) - 14.1%
------- --- ------- --- --- ------- --- ------- --- ----
Total adjusted EBITDA $39,670 9 $36,969 9 7.3% $72,545 8 $63,142 8 14.9%
(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 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
Asset-Based Lending 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 Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Total Net Sales $469,385 $488,726 $421,349 $457,069 $878,418 $1,836,529
Operating Income, GAAP 34,097 33,325 12,898 18,956 31,854 99,276
Restructuring and impairment 1,009 1,709 1,094 488 1,582 4,300
Strategic development and
acquisition related costs 1,297 193 727 1,134 1,861 3,351
Loss on disposition of business - - - 6,686 6,686 6,686
Acceleration of CEO retirement
benefits - - 4,600 - 4,600 4,600
Gain on insurance recovery (148) - - - - (148)
Unreimbursed business
interruption costs 235 28 - - - 263
Goodwill impairment - 6,000 - - - 6,000
Adjusted Operating Income 36,490 41,255 19,319 27,264 46,583 124,328
Other income and expense 1,322 (62) 928 (34) 894 2,154
Depreciation and amortization 10,278 10,664 10,358 10,442 20,800 41,742
Share-based compensation
expense 2,284 2,084 2,270 1,998 4,268 8,636
Adjusted EBITDA $50,374 $53,941 $32,875 $39,670 $72,545 $176,860
Year over year growth, Total Net
Sales 1.5 % 1.8 % 7.6 % 8.7 % 8.2 % 4.7 %
Operating Income Margin 7.3 % 6.8 % 3.1 % 4.1 % 3.6 % 5.4 %
Adjusted Operating Income Margin 7.8 % 8.4 % 4.6 % 6.0 % 5.3 % 6.8 %
Adjusted EBITDA Margin 10.7 % 11.0 % 7.8 % 8.7 % 8.3 % 9.6 %
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Total Net Sales $462,353 $480,314 $391,703 $420,464 $812,167 $1,754,834
Operating Income, GAAP 43,535 39,391 9,886 32,472 42,358 125,284
Restructuring and impairment 778 815 2,264 315 2,579 4,172
Strategic development and
acquisition related costs 819 590 357 124 481 1,890
(Gain) loss on sale of assets
and asset recovery (52) 62 - 137 137 147
Gain on insurance recovery - - - (9,601) (9,601) (9,601)
Unreimbursed business
interruption costs - - - 191 191 191
Adjusted Operating Income 45,080 40,858 12,507 23,638 36,145 122,083
Other income and expense (508) (192) 309 449 758 58
Depreciation and amortization 10,595 9,815 10,315 10,062 20,377 40,787
Share-based compensation
expense 2,661 3,181 3,042 2,820 5,862 11,704
Adjusted EBITDA $57,828 $53,662 $26,173 $36,969 $63,142 $174,632
Operating Income Margin 9.4 % 8.2 % 2.5 % 7.7 % 5.2 % 7.1 %
Adjusted Operating Income Margin 9.8 % 8.5 % 3.2 % 5.6 % 4.5 % 7.0 %
Adjusted EBITDA Margin 12.5 % 11.2 % 6.7 % 8.8 % 7.8 % 10.0 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Engineered Building Systems
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Total Sales $191,910 $188,183 $156,964 $167,240 $324,204 $704,297
External Sales 182,164 178,222 148,288 157,136 305,424 665,810
Operating Income, GAAP 14,948 13,043 8,263 9,271 17,534 45,525
Restructuring and impairment 941 695 1,136 280 1,416 3,052
Strategic development and
acquisition related costs - - 173 - 173 173
Adjusted Operating Income 15,889 13,738 9,572 9,551 19,123 48,750
Other income and expense 1,291 (694) 733 (88) 645 1,242
Depreciation and amortization 2,255 2,198 2,077 2,323 4,400 8,853
Adjusted EBITDA $19,435 $15,242 $12,382 $11,786 $24,168 $58,845
Year over year growth, Total
sales 6.0 % (7.8)% 3.8 % 2.8 % 3.3 % 0.7 %
Year over year growth, External
Sales 3.8 % (9.3)% 2.3 % 1.7 % 2.0 % (0.9)%
Operating Income Margin 7.8 % 6.9 % 5.3 % 5.5 % 5.4 % 6.5 %
Adjusted Operating Income
Margin 8.3 % 7.3 % 6.1 % 5.7 % 5.9 % 6.9 %
Adjusted EBITDA Margin 10.1 % 8.1 % 7.9 % 7.0 % 7.5 % 8.4 %
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Total Sales $181,029 $204,208 $151,263 $162,624 313,887 $699,124
External Sales 175,471 196,596 145,021 154,456 299,477 671,544
Operating Income, GAAP 19,561 22,830 6,503 6,894 13,397 55,788
Restructuring and impairment 106 211 1,910 186 2,096 2,413
(Gain) loss on sale of assets
and asset recovery (52) 62 - 137 137 147
Adjusted Operating Income 19,615 23,103 8,413 7,217 15,630 58,348
Other income and expense (931) (362) (41) (125) (166) (1,459)
Depreciation and amortization 2,438 2,399 2,276 2,285 4,561 9,398
Adjusted EBITDA $21,122 $25,140 $10,648 $9,377 $20,025 $66,287
Operating Income Margin 10.8 % 11.2 % 4.3 % 4.2 % 4.3 % 8.0 %
Adjusted Operating Income
Margin 10.8 % 11.3 % 5.6 % 4.4 % 5.0 % 8.3 %
Adjusted EBITDA Margin 11.7 % 12.3 % 7.0 % 5.8 % 6.4 % 9.5 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Metal Components
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Total Sales $166,305 $181,288 $146,832 $168,456 $315,288 $662,881
External Sales 140,639 155,183 127,528 147,661 275,189 571,011
Operating Income, GAAP 23,276 23,119 17,089 22,082 39,171 85,566
Restructuring and impairment 60 69 (1,403) 120 (1,283) (1,154)
Gain on insurance recovery (148) - - - - (148)
Adjusted Operating Income 23,188 23,188 15,686 22,202 37,888 84,264
Other income and expense 55 84 53 67 120 259
Depreciation and amortization 1,266 1,422 1,576 1,444 3,020 5,708
Adjusted EBITDA $24,509 $24,694 $17,315 $23,713 $41,028 $90,231
Year over year growth, Total
sales (0.1)% 8.9 % 9.4 % 8.8 % 9.1 % 6.6 %
Year over year growth, External
Sales 0.1 % 10.9 % 10.4 % 10.8 % 10.6 % 7.9 %
Operating Income Margin 14.0 % 12.8 % 11.6 % 13.1 % 12.4 % 12.9 %
Adjusted Operating Income
Margin 13.9 % 12.8 % 10.7 % 13.2 % 12.0 % 12.7 %
Adjusted EBITDA Margin 14.7 % 13.6 % 11.8 % 14.1 % 13.0 % 13.6 %
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Total Sales $166,512 $166,532 $134,173 $154,895 $289,068 $622,112
External Sales 140,560 139,968 115,557 133,290 248,847 529,375
Operating Income, GAAP 26,803 21,254 12,376 19,997 32,373 80,430
Restructuring and impairment 202 103 305 129 434 739
Gain on insurance recovery - - - (420) (420) (420)
Adjusted Operating Income 27,005 21,357 12,681 19,706 32,387 80,749
Other income and expense 92 (27) 28 52 80 145
Depreciation and amortization 1,365 1,406 1,334 1,302 2,636 5,407
Adjusted EBITDA $28,462 $22,736 $14,043 $21,060 $35,103 $86,301
Operating Income Margin 16.1 % 12.8 % 9.2 % 12.9 % 11.2 % 12.9 %
Adjusted Operating Income
Margin 16.2 % 12.8 % 9.5 % 12.7 % 11.2 % 13.0 %
Adjusted EBITDA Margin 17.1 % 13.7 % 10.5 % 13.6 % 12.1 % 13.9 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Insulated Metal Panels
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Total Sales $119,730 $123,542 $110,794 $113,413 $224,207 $467,479
External Sales 98,026 105,064 97,513 99,792 197,305 400,395
Operating Income, GAAP 11,468 14,895 7,071 1,540 8,611 34,974
Restructuring and impairment 8 683 1,284 88 1,372 2,063
Strategic development and
acquisition related costs - 90 300 61 361 451
Loss on disposition of business - - - 6,686 6,686 6,686
Unreimbursed business
interruption costs 235 28 - - - 263
Adjusted Operating Income 11,711 15,696 8,655 8,375 17,030 44,437
Other income and expense (211) 356 (273) 223 (50) 95
Depreciation and amortization 4,516 4,742 4,388 4,335 8,723 17,981
Adjusted EBITDA $16,016 $20,794 $12,770 $12,933 $25,703 $62,513
Year over year growth, Total
sales 13.3 % 12.3 % 16.4 % 10.2 % 13.2 % 13.0 %
Year over year growth, External
Sales 4.2 % 13.4 % 18.3 % 15.0 % 16.6 % 12.5 %
Operating Income Margin 9.6 % 12.1 % 6.4 % 1.4 % 3.8 % 7.5 %
Adjusted Operating Income Margin 9.8 % 12.7 % 7.8 % 7.4 % 7.6 % 9.5 %
Adjusted EBITDA Margin 13.4 % 16.8 % 11.5 % 11.4 % 11.5 % 13.4 %
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Total Sales $105,694 $110,001 $95,195 $102,937 $198,132 $413,827
External Sales 94,059 92,648 82,441 86,773 169,214 355,921
Operating Income, GAAP 8,911 7,513 2,192 19,377 21,569 37,993
Restructuring and impairment 59 404 - - - 463
Strategic development and
acquisition related costs 9 - - - - 9
Gain on insurance recovery - - - (9,181) (9,181) (9,181)
Unreimbursed business
interruption costs - - - 191 191 191
---
Adjusted Operating Income 8,979 7,917 2,192 10,387 12,579 29,475
Other income and expense 32 270 35 340 375 677
Depreciation and amortization 4,357 3,926 4,392 4,258 8,650 16,933
-----
Adjusted EBITDA $13,368 $12,113 $6,619 $14,985 $21,604 $47,085
Operating Income Margin 8.4 % 6.8 % 2.3 % 18.8 % 10.9 % 9.2 %
Adjusted Operating Income Margin 8.5 % 7.2 % 2.3 % 10.1 % 6.3 % 7.1 %
Adjusted EBITDA Margin 12.6 % 11.0 % 7.0 % 14.6 % 10.9 % 11.4 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Metal Coil Coating
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Total Sales $95,261 $98,550 $88,343 $95,190 $183,533 $377,344
External Sales 48,556 50,257 48,020 52,480 100,500 199,313
Operating Income, GAAP 7,107 1,419 5,376 7,129 12,505 21,031
Goodwill impairment - 6,000 - - - 6,000
---
Adjusted Operating Income 7,107 7,419 5,376 7,129 12,505 27,031
Depreciation and amortization 2,063 2,065 2,058 2,085 4,143 8,271
Adjusted EBITDA $9,170 $9,484 $7,434 $9,214 $16,648 $35,302
Year over year growth, Total
sales (1.5)% 2.7 % 0.0% 9.8 % 4.8 % 2.6 %
Year over year growth,
External Sales (7.1)% (1.7)% (1.4)% 14.2 % 6.2 % 0.7 %
Operating Income Margin 7.5 % 1.4 % 6.1 % 7.5 % 6.8 % 5.6 %
Adjusted Operating Income
Margin 7.5 % 7.5 % 6.1 % 7.5 % 6.8 % 7.2 %
Adjusted EBITDA Margin 9.6 % 9.6 % 8.4 % 9.7 % 9.1 % 9.4 %
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Total Sales $96,684 $95,987 $88,340 $86,729 $175,069 $367,740
External Sales 52,263 51,102 48,684 45,945 94,629 197,994
Operating Income, GAAP 10,531 9,310 6,706 6,227 12,933 32,774
------
Adjusted Operating Income 10,531 9,310 6,706 6,227 12,933 32,774
Other income and expense 2 - 31 - 31 33
Depreciation and amortization 2,214 1,849 2,106 2,009 4,115 8,178
Adjusted EBITDA $12,747 $11,159 $8,843 $8,236 $17,079 $40,985
Operating Income Margin 10.9 % 9.7 % 7.6 % 7.2 % 7.4 % 8.9 %
Adjusted Operating Income
Margin 10.9 % 9.7 % 7.6 % 7.2 % 7.4 % 8.9 %
Adjusted EBITDA Margin 13.2 % 11.6 % 10.0 % 9.5 % 9.8 % 11.1 %
NCI BUILDING SYSTEMS, INC.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
(In thousands)
(Unaudited)
Corporate
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 30, October 29, January 28, April 29, April 29, April 29,
2017 2017 2018 2018 2018 2018
---- ---- ---- ---- ---- ----
Operating Loss, GAAP $(22,702) $(19,151) $(24,901) $(21,066) $(45,967) $(87,820)
Restructuring and impairment - 262 77 - 77 339
Strategic development and
acquisition related costs 1,297 103 254 1,073 1,327 2,727
Acceleration of CEO
retirement benefits - - 4,600 - 4,600 4,600
Adjusted Operating Loss (21,405) (18,786) (19,970) (19,993) (39,963) (80,154)
Other income and expense 187 192 415 (236) 179 558
Depreciation and amortization 178 237 259 255 514 929
Share-based compensation
expense 2,284 2,084 2,270 1,998 4,268 8,636
Adjusted EBITDA $(18,756) $(16,273) $(17,026) $(17,976) $(35,002) $(70,031)
Fiscal Six Trailing
Fiscal Three Months Ended Months Ended Twelve Months
------------------------- ------------ -------------
July 31, October 30, January 29, April 30, April 30, April 30,
2016 2016 2017 2017 2017 2017
---- ---- ---- ---- ---- ----
Operating Loss, GAAP $(22,271) $(21,516) $(17,891) $(20,023) $(37,914) $(81,701)
Restructuring and impairment 411 97 49 - 49 557
Strategic development and
acquisition related costs 810 590 357 124 481 1,881
Adjusted Operating Loss (21,050) (20,829) (17,485) (19,899) (37,384) (79,263)
Other income and expense 297 (73) 256 182 438 662
Depreciation and amortization 221 235 207 208 415 871
Share-based compensation
expense 2,661 3,181 3,042 2,820 5,862 11,704
Adjusted EBITDA $(17,871) $(17,486) $(13,980) $(16,689) $(30,669) $(66,026)
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SOURCE NCI Building Systems, Inc.
