Exhibit 99.1
 |
NEWS RELEASE |
NCI Building Systems Reports
Second Quarter 2015 Fiscal Year Results
HOUSTON, June 2, 2015 — NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the second fiscal quarter ended May 3, 2015.
Second Quarter 2015 Financial and Operational Highlights:
| · | Sales rose 18% to $360.1 million, compared to last year’s second quarter, primarily driven by the recent acquisition of CENTRIA |
| · | Gross profit margin expanded 160 basis points year-over-year to 21.1% |
| · | Net loss per diluted common share was $(0.10) and adjusted net loss per diluted common share was $(0.06) |
| · | Excluding an estimated $2.6 million Adjusted EBITDA contribution from CENTRIA, Adjusted EBITDA rose 110% compared to last year’s second quarter |
| · | Buildings backlog grew 18% year-over-year and consolidated backlog increased 51% to $504 million, which includes CENTRIA’s backlog of $117 million |
| · | Buildings Group bookings grew 18% year-over-year |
Norman C. Chambers, Chairman, President and Chief Executive, commented, “We continue to deliver solid results and our second quarter financial performance marks the fourth consecutive quarter of year-over-year improvement in gross profit margin and Adjusted EBITDA. We are entering the second half of our fiscal year with a seven-year high backlog and double digit year-over-year bookings growth. We believe we are well positioned to leverage our streamlined operational structure during our seasonally stronger second half and realize meaningful growth in revenue and earnings.”
Second Quarter 2015 Results
Second quarter sales increased 18% to $360.1 million from $305.8 million in last year's second quarter, driven principally by the full quarter’s contribution of the CENTRIA business as well as commercial discipline and higher volumes in our legacy single skin and insulated metal panel businesses. The Company estimates the impact of inclement weather was approximately $11 million in revenue for the quarter, largely due to delayed shipments because of poor worksite conditions.
Gross profit increased 27% to $75.9 million from $59.6 million in the second quarter of 2014, and gross profit margin expanded 160 basis points to 21.1%, compared to 19.5% in the prior year’s period. Contributing to the higher margins were continued commercial discipline in both the Components and Buildings groups, higher margin product mix, and improved manufacturing and supply chain efficiencies.
Adjusted operating income, a non-GAAP measure defined in the accompanying financial tables, increased to $1.6 million in the current quarter from a loss of $5.8 million in the second quarter of 2014 due to the expansion in sales and gross profit margin. On a GAAP basis, operating loss was $(3.6) million for the second quarter compared to $(5.5) million in the prior year’s quarter.
Adjusted EBITDA, a non-GAAP measure, defined as earnings before interest, taxes, depreciation and amortization, and cash and other non-cash items, in accordance with the Company's term loan credit agreement was $15.8 million, up 151% from $6.3 million in the prior year’s period. The Company estimates the impact of inclement weather in the quarter was between $3 million and $4 million in EBITDA. Please see the reconciliation of Adjusted EBITDA to net income (loss) in the accompanying financial tables.
Interest expense increased to $8.3 million in the second quarter compared to $3.1 million in last year’s second quarter as a result of the recently issued $250 million, 8.25% senior notes, used to finance the CENTRIA acquisition.
The Company reported a net loss of $7.5 million, or $(0.10) per diluted common share in the second quarter of 2015, which was impacted by several unusual after-tax charges including: $0.6 million of acquisition related costs; $1.5 million of restructuring charges associated with the realignment of the management structure and closure of our Caryville, Tennessee manufacturing facility; and $3.1 million of accounting fair value adjustments related to the acquisition of CENTRIA. Excluding the impact of these special items, the Company reported an adjusted net loss, a non-GAAP measure, of $4.3 million, or $(0.06) per diluted common share compared to an adjusted net loss of $5.3 million, or $(0.07) per diluted common share, in the second quarter of 2014.
Cash and cash equivalents ended at $25.3 million compared to $12.5 million in the comparable period in fiscal 2014. The Company paid down $21 million of principal on its term loan in the quarter. In addition, the Company’s $150.0 million ABL facility remained undrawn as of May 3, 2015.
Fiscal Second Quarter 2015 Segment Performance
Third party sales in the Coatings group were $22.8 million, an 11% decline from $25.5 million in last year’s second quarter. Total sales, including intercompany activity, decreased $4.3 million, or 8%, to $50.0 million from $54.3 million when compared to the same quarter in 2014. Operating income declined to $2.4 million in the second quarter of fiscal 2015 compared to $3.9 million reported in the same period last year. The volume decline and the resulting lower manufacturing leverage negatively impacted margins. The Coatings segment continues to diversify its customer base while improving its operating efficiencies in order to drive improved profitability.
The Components group generated $198.7 million in third-party sales during the quarter, an increase of 46% from $135.7 million in the second quarter of 2014. Total sales, including intercompany sales, increased $66.0 million, or 43%, to $221.1 million from $155.1 million in the prior year’s quarter. Operating income increased 52% to $6.9 million compared to $4.6 million in the same quarter in 2014. A combination of increased legacy single skin and insulated metal panel (IMP) sales improved operating leverage for the division. During the quarter, CENTRIA contributed $53.4 million in sales, an operating loss of $(3.1) million and $2.6 million in Adjusted EBITDA, reflecting its first full quarter of results. CENTRIA’s operating loss includes $3.3 million of acquisition related special charges.
Third party sales in the Buildings group declined 4% to $138.7 million in the second quarter from $144.6 million in the prior year’s quarter, primarily due to weather induced lower volumes. Total sales, including intercompany activity, were $143.2 million, or a decrease of 4%, from $149.4 million in the same period in 2014. Operating income increased significantly to $2.9 million in the current quarter when compared to near break even in the second quarter of 2014. The Buildings group continues to benefit from strong margins led by improved project mix and commercial discipline, combined with lean manufacturing improvements.
Market Commentary
Leading indicators for nonresidential construction activity continue to indicate positive momentum into the second half of fiscal year 2015, despite uneven industry statistics during the seasonally weaker winter season. Industrial vacancies continue to decline and according to Jones Lang LaSalle research, the current industrial vacancy rate of 6.8% marks a 10-year low. Net absorption outpaced completed projects, indicating tenant demand is likely to support new construction starts.
The American Institute of Architects’ (AIA) Architecture Mixed Use Index increased from 47.2 in February to 51.8 in April 2015. The Architectural Billings Index expanded in March by 1.3 points to 51.7 but softened in April to 48.8. The AIA cited weather in both the Midwest and the Northeast as the main driver behind the April decline. Due to the leading nature of the Architectural Billings Index, the reported index values in the last six months of 2014, which were all above 50, suggest increasing levels of U.S. nonresidential construction spending for the remainder of 2015. Further, the New Projects Inquiry Index increased from 58.2 in March to 60.1 in April, coming in above 60 for the first time since October 2014 and signaling continued positive momentum for near-term architectural billings.
Outlook and Guidance
Mr. Chambers remarked, “Our continued Adjusted EBITDA growth in our second quarter 2015 results from the internal changes we have implemented over the past several quarters, including our acquisition activity. Our streamlined manufacturing and commercial organizations, supply chain management and commercial discipline drove meaningful improvement in our financial results despite the headwinds of declining steel prices and inclement weather. We remain focused on our goals of delivering sustainable margin expansion and increasing levels of profitability as we take advantage of strong revenue growth and operating leverage during the seasonally stronger second half of 2015.”
“We are encouraged by the strength of our bookings and backlog as they indicate a potential for nonresidential recovery that is beginning to accelerate and expand beyond the commercial and industrial end markets. We expect the investments we’ve made in insulated metal panels over the past few years, including the recent acquisition of CENTRIA, will ideally position us to unlock the accelerated growth potential of the underpenetrated North American market. Based upon our current level of bookings and strong backlog, we expect year-over-year revenue growth in the second half of our fiscal year to drive Adjusted EBITDA growth. ”
For additional information, please see the CFO Commentary atwww.ncibuildingsystems.com under the tabQuarterly Earnings and Transcripts.
Conference Call Information
The NCI Building Systems, Inc. second quarter 2015 conference call is scheduled for Wednesday, June 3, 2015, at 9:00 AM ET. Please dial 1-877-407-0672 (toll free) or 412-902-0003 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 atwww.ncibuildingsystems.com. To access the taped replay, please dial 1-877-660-6853 (toll free) or 201-612-7415 and the passcode 13608557# when prompted. The taped replay will be available two hours after the call through June 10, 2015.
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, Mexico and China with additional sales and distribution offices throughout the United States and Canada. For more information visitwww.ncibuildingsystems.com.
Contact:
Layne de Alvarez
Vice President, Investor Relations
281-897-7710
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," "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. Among the factors that could cause actual results to differ materially include, but are not limited to, the Company’s ability to integrate CENTRIA with the Company’s business and realize anticipated benefits of such acquisition; industry cyclicality and seasonality and adverse weather conditions; ability to service or refinance the Company's debt and obtain future financing; the Company’s ability to comply with the financial tests and covenants in its existing and future debt obligations; operational limitations or restrictions in connection with our debt; recognition of asset impairment charges; the ability to make strategic acquisitions accretive to earnings; retention and replacement of key personnel; enforcement and obsolescence of intellectual property rights; fluctuations in customer demand; commodity price increases and/or limited availability of raw materials, including steel; increases in energy prices, competitive activity and pricing pressure; challenging economic conditions affecting the non-residential construction industry; volatility in the U.S. economy and abroad generally, and in the credit markets; costs related to environmental clean-ups and liabilities; changes in laws or regulations, including the Dodd-Frank Act; the dilutive effect on the Company’s common stockholders of potential future sales of the Company’s common stock held by our sponsor; substantial governance and other rights held by our sponsor; breaches of our information system security measures and damage to our major information management systems; hazards that may cause personal injury or property damage, thereby subjecting the Company to liabilities and possible losses, which may not be covered by insurance; costs and other effects of legal and administrative proceedings, settlements, investigations, claims and other matters; and the volatility of the Company's stock price. The Company's SEC filings, including our most recent reports on Form 10-K, particularly under Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended November 2, 2014 and in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended February 1, 2015, 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. NCI expressly disclaims any obligation to release publicly any updates or revisions to these forward-looking statements to reflect any changes in its expectations.
###
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| | | Fiscal Three Months Ended | | | Fiscal Six Months Ended | |
| | | May 3, | | | May 4, | | | May 3, | | | May 4, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| | | | | | | | | | | | | |
| Sales | | $ | 360,147 | | | $ | 305,800 | | | $ | 683,073 | | | $ | 616,466 | |
| Cost of sales, excluding gain on insurance recovery | | | 284,258 | | | | 246,527 | | | | 535,045 | | | | 498,955 | |
| Gain on insurance recovery | | | - | | | | (324 | ) | | | - | | | | (1,311 | ) |
| Gross profit | | | 75,889 | | | | 59,597 | | | | 148,028 | | | | 118,822 | |
| | | | 21.1 | % | | | 19.5 | % | | | 21.7 | % | | | 19.3 | % |
| | | | | | | | | | | | | | | | | |
| Engineering, selling, general and administrative expenses | | | 73,035 | | | | 64,097 | | | | 135,904 | | | | 125,477 | |
| Intangible asset amortization | | | 4,375 | | | | 1,013 | | | | 5,868 | | | | 2,026 | |
| Strategic development and acquisition related costs | | | 628 | | | | - | | | | 2,357 | | | | - | |
| Restructuring charges | | | 1,468 | | | | - | | | | 2,945 | | | | - | |
| Income (loss) from operations | | | (3,617 | ) | | | (5,513 | ) | | | 954 | | | | (8,681 | ) |
| | | | | | | | | | | | | | | | | |
| Interest income | | | 32 | | | | 24 | | | | 39 | | | | 50 | |
| Interest expense | | | (8,312 | ) | | | (3,059 | ) | | | (12,299 | ) | | | (6,185 | ) |
| Foreign exchange gain/(loss) | | | (10 | ) | | | 262 | | | | (1,411 | ) | | | (439 | ) |
| Other income, net | | | 332 | | | | 324 | | | | 332 | | | | 529 | |
| | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | (11,575 | ) | | | (7,962 | ) | | | (12,385 | ) | | | (14,726 | ) |
| Benefit from income taxes | | | (4,087 | ) | | | (3,057 | ) | | | (4,577 | ) | | | (5,563 | ) |
| | | | 35.3 | % | | | 38.4 | % | | | 37.0 | % | | | 37.8 | % |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (7,488 | ) | | $ | (4,905 | ) | | $ | (7,808 | ) | | $ | (9,163 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Loss per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | (0.10 | ) | | $ | (0.07 | ) | | $ | (0.11 | ) | | $ | (0.13 | ) |
| Diluted | | $ | (0.10 | ) | | $ | (0.07 | ) | | $ | (0.11 | ) | | $ | (0.13 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 73,133 | | | | 72,838 | | | | 73,102 | | | | 73,177 | |
| Diluted | | | 73,133 | | | | 72,838 | | | | 73,102 | | | | 73,177 | |
| | | | | | | | | | | | | | | | | |
| Increase in sales | | | 17.8 | % | | | 4.2 | % | | | 10.8 | % | | | 4.3 | % |
| | | | | | | | | | | | | | | | | |
| Gross profit percentage | | | 21.1 | % | | | 19.5 | % | | | 21.7 | % | | | 19.3 | % |
| | | | | | | | | | | | | | | | | |
| Engineering, selling, general and administrative expenses percentage | | | 20.3 | % | | | 21.0 | % | | | 19.9 | % | | | 20.4 | % |
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| | | May 3, | | | November 2, | |
| | | 2015 | | | 2014 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 25,276 | | | $ | 66,651 | |
| Restricted cash | | | 980 | | | | - | |
| Accounts receivable, net | | | 141,895 | | | | 136,923 | |
| Inventories, net | | | 159,681 | | | | 131,497 | |
| Deferred income taxes | | | 21,998 | | | | 21,447 | |
| Income tax receivable | | | 7,438 | | | | - | |
| Prepaid expenses and other | | | 33,045 | | | | 22,773 | |
| Investments in debt and equity securities, at market | | | 5,786 | | | | 5,549 | |
| Assets held for sale | | | 6,261 | | | | 5,690 | |
| Total current assets | | | 402,360 | | | | 390,530 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 270,003 | | | | 244,714 | |
| Goodwill | | | 198,169 | | | | 75,226 | |
| Intangible assets, net | | | 131,141 | | | | 44,923 | |
| Deferred financing costs, net | | | 12,051 | | | | 3,290 | |
| Total assets | | $ | 1,013,724 | | | $ | 758,683 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| Current portion of long-term debt | | $ | 2,384 | | | $ | 2,384 | |
| Note payable | | | 1,713 | | | | 418 | |
| Accounts payable | | | 120,913 | | | | 118,164 | |
| Accrued compensation and benefits | | | 51,631 | | | | 50,666 | |
| Accrued interest | | | 7,844 | | | | 1,820 | |
| Other accrued expenses | | | 79,728 | | | | 72,259 | |
| Total current liabilities | | | 264,213 | | | | 245,711 | |
| | | | | | | | | |
| Long-term debt, net | | | 461,765 | | | | 233,003 | |
| Deferred income taxes | | | 23,129 | | | | 20,219 | |
| Other long-term liabilities | | | 21,550 | | | | 13,208 | |
| Total long-term liabilities | | | 506,444 | | | | 266,430 | |
| | | | | | | | | |
| Common stock | | | 741 | | | | 737 | |
| Additional paid-in capital | | | 636,165 | | | | 630,297 | |
| Accumulated deficit | | | (379,358 | ) | | | (371,550 | ) |
| Accumulated other comprehensive loss | | | (8,739 | ) | | | (8,739 | ) |
| Treasury stock, at cost | | | (5,742 | ) | | | (4,203 | ) |
| Total stockholders' equity | | | 243,067 | | | | 246,542 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,013,724 | | | $ | 758,683 | |
NCI BUILDING SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| | | Fiscal Six Months Ended | |
| | | May 3, | | | May 4, | |
| | | 2015 | | | 2014 | |
| | | | | | | |
| Cash flows from operating activities: | | | | | | | | |
| Net loss | | $ | (7,808 | ) | | $ | (9,163 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
| Depreciation and amortization | | | 23,497 | | | | 17,708 | |
| Deferred financing cost amortization | | | 118 | | | | 592 | |
| Share-based compensation expense | | | 5,134 | | | | 5,742 | |
| Gain on sale of property | | | (26 | ) | | | - | |
| Gain on insurance recovery | | | - | | | | (1,311 | ) |
| (Recovery of) Provision for doubtful accounts | | | (129 | ) | | | 585 | |
| Provision for (benefit from) deferred income taxes | | | 5,506 | | | | (5,884 | ) |
| Excess tax benefits from share-based compensation arrangements | | | (384 | ) | | | (760 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 30,268 | | | | 25,132 | |
| Inventories | | | 1,660 | | | | (14,140 | ) |
| Income tax receivable | | | (6,373 | ) | | | (2 | ) |
| Investments in debt and equity securities | | | (238 | ) | | | - | |
| Prepaid expenses and other | | | 62 | | | | 862 | |
| Accounts payable | | | (25,044 | ) | | | (43,610 | ) |
| Accrued expenses | | | (28,910 | ) | | | (7,051 | ) |
| Other, net | | | (634 | ) | | | 47 | |
| | | | | | | | | |
| Net cash provided by operating activities | | | (3,301 | ) | | | (31,253 | ) |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Acquisition, net of cash acquired | | | (247,123 | ) | | | - | |
| Proceeds from sale of property, plant and equipment | | | 26 | | | | - | |
| Proceeds from insurance | | | - | | | | 1,311 | |
| Capital expenditures | | | (9,307 | ) | | | (10,004 | ) |
| | | | | | | | | |
| Net cash used in investing activities | | | (256,404 | ) | | | (8,693 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Proceeds from stock options exercised | | | 354 | | | | - | |
| Issuance of debt | | | 250,000 | | | | - | |
| Payments on term loan | | | (21,239 | ) | | | (1,196 | ) |
| Payments on note payable | | | (417 | ) | | | (547 | ) |
| Proceeds from Amended ABL Facility | | | - | | | | 47,000 | |
| Payments on Amended ABL Facility | | | - | | | | (47,000 | ) |
| Payment of financing costs | | | (8,879 | ) | | | (75 | ) |
| Purchase of treasury stock | | | (1,539 | ) | | | (23,743 | ) |
| Excess tax benefits from share-based compensation arrangements | | | 384 | | | | 760 | |
| | | | | | | | | |
| Net cash provided by (used in) financing activities | | | 218,664 | | | | (24,801 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | (334 | ) | | | (221 | ) |
| Net decrease in cash and cash equivalents | | | (41,375 | ) | | | (64,968 | ) |
| | | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 66,651 | | | | 77,436 | |
| | | | | | | | | |
| Cash and cash equivalents at end of period | | | 25,276 | | | | 12,468 | |
NCI Building Systems, Inc.
Business Segments
(In thousands)
(Unaudited)
| | | Fiscal Three Months Ended | | | Fiscal Three Months Ended | | | $ | | | % | |
| | | May 3, 2015 | | | May 4, 2014 | | | Inc/(Dec) | | | Change | |
| | | | | | % of | | | | | | % of | | | | | | | |
| | | | | | Total
Sales | | | | | | Total
Sales | | | | | | | |
| Sales: | | | | | | | | | | | | | | | | | | | | | | | | |
| Metal coil coating | | $ | 49,998 | | | | 12 | | | $ | 54,307 | | | | 15 | | | $ | (4,309 | ) | | | -7.9 | % |
| Metal components | | | 221,118 | | | | 53 | | | | 155,085 | | | | 43 | | | | 66,033 | | | | 42.6 | % |
| Engineered building systems | | | 143,245 | | | | 35 | | | | 149,411 | | | | 42 | | | | (6,166 | ) | | | -4.1 | % |
| Total sales | | | 414,361 | | | | 100 | | | | 358,803 | | | | 100 | | | | 55,558 | | | | 15.5 | % |
| Less: Intersegment sales | | | 54,214 | | | | 13 | | | | 53,003 | | | | 15 | | | | 1,211 | | | | 2.3 | % |
| Total net sales | | $ | 360,147 | | | | 87 | | | $ | 305,800 | | | | 85 | | | $ | 54,347 | | | | 17.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | % of
Sales | | | | | | % of
Sales | | | | | | | |
| Operating income (loss): | | | | | | | | | | | | | | | | | | | | | | | | |
| Metal coil coating | | $ | 2,397 | | | | 5 | | | $ | 3,893 | | | | 7 | | | $ | (1,496 | ) | | | -38.4 | % |
| Metal components | | | 6,941 | | | | 3 | | | | 4,559 | | | | 3 | | | | 2,382 | | | | 52.2 | % |
| Engineered building systems | | | 2,855 | | | | 2 | | | | 36 | | | | 0 | | | | 2,819 | | | | 7830.6 | % |
| Corporate | | | (15,810 | ) | | | - | | | | (14,001 | ) | | | - | | | | (1,809 | ) | | | -12.9 | % |
| Total operating income (loss) (% of sales) | | $ | (3,617 | ) | | | (1 | ) | | $ | (5,513 | ) | | | (2 | ) | | $ | 1,896 | | | | 34.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Six Months Ended | | | Fiscal Six Months Ended | | | $ | | | % | |
| | | May 3, 2015 | | | May 4, 2014 | | | Inc/(Dec) | | | Change | |
| | | | | | % of | | | | | | % of | | | | | | | |
| | | | | | Total | | | | | | Total | | | | | | | |
| | | | | | Sales | | | | | | Sales | | | | | | | |
| Sales: | | | | | | | | | | | | | | | | | | | | | | | | |
| Metal coil coating | | $ | 105,608 | | | | 13 | | | $ | 108,574 | | | | 15 | | | $ | (2,966 | ) | | | -2.7 | % |
| Metal components | | | 393,907 | | | | 50 | | | | 313,278 | | | | 43 | | | | 80,629 | | | | 25.7 | % |
| Engineered building systems | | | 293,045 | | | | 37 | | | | 301,648 | | | | 42 | | | | (8,603 | ) | | | -2.9 | % |
| Total sales | | | 792,560 | | | | 100 | | | | 723,500 | | | | 100 | | | | 69,060 | | | | 9.5 | % |
| Intersegment sales | | | 109,487 | | | | 14 | | | | 107,034 | | | | 15 | | | | 2,453 | | | | 2.3 | % |
| Total net sales | | $ | 683,073 | | | | 86 | | | $ | 616,466 | | | | 85 | | | $ | 66,607 | | | | 10.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | % of | | | | | | % of | | | | | | | |
| | | | | Sales | | | | | | Sales | | | | | | | |
| Operating income (loss): | | | | | | | | | | | | | | | | | | |
| Metal coil coating | | $ | 6,375 | | | | 6 | | | $ | 10,388 | | | | 10 | | | $ | (4,013 | ) | | | -38.6 | % |
| Metal components | | | 15,277 | | | | 4 | | | | 8,670 | | | | 3 | | | | 6,607 | | | | 76.2 | % |
| Engineered building systems | | | 11,574 | | | | 4 | | | | 1,676 | | | | 1 | | | | 9,898 | | | | 590.6 | % |
| Corporate | | | (32,272 | ) | | | - | | | | (29,415 | ) | | | - | | | | (2,857 | ) | | | -9.7 | % |
| Total operating income (loss) (% of sales) | | $ | 954 | | | | - | | | $ | (8,681 | ) | | | (1 | ) | | $ | 9,635 | | | | 111.0 | % |
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 MAY 3, 2015 AND MAY 4, 2014
(In thousands)
(Unaudited)
| | | Fiscal Three Months Ended May 3, 2015 | |
| | | Metal Coil
Coating | | | Metal
Components | | | Engineered
Building
Systems | | | Corporate | | | Consolidated | |
| | | | | | | | | | | | | | | | |
| Operating income (loss), GAAP basis | | $ | 2,397 | | | $ | 6,941 | | | $ | 2,855 | | | $ | (15,810 | ) | | $ | (3,617 | ) |
| Restructuring charges | | | 254 | | | | 629 | | | | 792 | | | | (207 | ) | | | 1,468 | |
| Strategic development and acquisition related costs | | | - | | | | - | | | | - | | | | 628 | | | | 628 | |
| Short lived acquisition method fair value adjustments | | | - | | | | 3,109 | | | | - | | | | - | | | | 3,109 | |
| Adjusted operating income (loss) (1) | | $ | 2,651 | | | $ | 10,679 | | | $ | 3,647 | | | $ | (15,389 | ) | | $ | 1,588 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Three Months Ended May 4, 2014 | |
| | | Metal Coil
Coating | | | Metal
Components | | | Engineered
Building
Systems | | | Corporate | | | Consolidated | |
| | | | | | | | | | | | | | | | |
| Operating income (loss), GAAP basis | | $ | 3,893 | | | $ | 4,559 | | | $ | 36 | | | $ | (14,001 | ) | | $ | (5,513 | ) |
| Gain on insurance recovery | | | (324 | ) | | | - | | | | - | | | | - | | | | (324 | ) |
| Secondary offering costs | | | - | | | | - | | | | - | | | | 50 | | | | 50 | |
| Adjusted operating income (loss) (1) | | $ | 3,569 | | | $ | 4,559 | | | $ | 36 | | | $ | (13,951 | ) | | $ | (5,787 | ) |
| (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 statement 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 SIX MONTHS ENDED MAY 3, 2015 AND MAY 4, 2014
(In thousands)
(Unaudited)
| | | Fiscal Six Months Ended May 3, 2015 | |
| | | Metal Coil
Coating | | | Metal
Components | | | Engineered
Building
Systems | | | Corporate | | | Consolidated | |
| | | | | | | | | | | | | | | | |
| Operating income (loss), GAAP basis | | $ | 6,375 | | | $ | 15,277 | | | $ | 11,574 | | | $ | (32,272 | ) | | $ | 954 | |
| Restructuring charges | | | 254 | | | | 1,237 | | | | 1,661 | | | | (207 | ) | | | 2,945 | |
| Strategic development and acquisition related costs | | | - | | | | - | | | | - | | | | 2,357 | | | | 2,357 | |
| Short lived acquisition method fair value adjustments | | | - | | | | 4,081 | | | | - | | | | - | | | | 4,081 | |
| Adjusted operating income (loss) (1) | | $ | 6,629 | | | $ | 20,595 | | | $ | 13,235 | | | $ | (30,122 | ) | | $ | 10,337 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Six Months Ended May 4, 2014 | |
| | | Metal Coil
Coating | | | Metal
Components | | | Engineered
Building Systems | | | Corporate | | | Consolidated | |
| | | | | | | | | | | | | | | | |
| Operating income (loss), GAAP basis | | $ | 10,388 | | | $ | 8,670 | | | $ | 1,676 | | | $ | (29,415 | ) | | $ | (8,681 | ) |
| Gain on insurance recovery | | | (1,311 | ) | | | - | | | | - | | | | - | | | | (1,311 | ) |
| Secondary offering costs | | | - | | | | - | | | | - | | | | 754 | | | | 754 | |
| Adjusted operating income (loss) (1) | | $ | 9,077 | | | $ | 8,670 | | | $ | 1,676 | | | $ | (28,661 | ) | | $ | (9,238 | ) |
| (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 statement 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)
| | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | Trailing 12 Months | |
| | | August 3, | | | November 2, | | | February 1, | | | May 3, | | | May 3, | |
| | | 2014 | | | 2014 | | | 2015 | | | 2015 | | | 2015 | |
| Net income (loss) | | $ | 6,089 | | | $ | 14,259 | | | $ | (320 | ) | | $ | (7,488 | ) | | $ | 12,540 | |
| Add: | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 8,994 | | | | 9,220 | | | | 9,731 | | | | 13,766 | | | | 41,711 | |
| Consolidated interest expense, net | | | 3,142 | | | | 3,053 | | | | 3,980 | | | | 8,280 | | | | 18,455 | |
| Provision (benefit) for income taxes | | | 2,837 | | | | 4,215 | | | | (490 | ) | | | (4,087 | ) | | | 2,475 | |
| Restructuring charges | | | - | | | | - | | | | 1,477 | | | | 1,759 | | | | 3,236 | |
| Strategic development and acquisition related costs | | | 1,486 | | | | 3,512 | | | | 1,729 | | | | 628 | | | | 7,355 | |
| Short lived acquisition method inventory fair value adjustments | | | - | | | | - | | | | 583 | | | | 775 | | | | 1,358 | |
| Non-cash charges: | | | | | | | | | | | | | | | | | | | | |
| Share-based compensation | | | 2,404 | | | | 2,022 | | | | 2,933 | | | | 2,201 | | | | 9,560 | |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA (1) | | $ | 24,952 | | | $ | 36,281 | | | $ | 19,623 | | | $ | 15,834 | | | $ | 96,690 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | 3rd Qtr | | | 4th Qtr | | | 1st Qtr | | | 2nd Qtr | | | Trailing 12 Months | |
| | | July 28, | | | November 3, | | | February 2, | | | May 4, | | | May 4, | |
| | | 2013 | | | 2013 | | | 2014 | | | 2014 | | | 2014 | |
| Net income (loss) | | $ | (12,192 | ) | | $ | 8,276 | | | $ | (4,258 | ) | | $ | (4,905 | ) | | $ | (13,079 | ) |
| Add: | | | | | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 9,066 | | | | 9,012 | | | | 8,767 | | | | 8,941 | | | | 35,786 | |
| Consolidated interest expense, net | | | 5,130 | | | | 3,334 | | | | 3,100 | | | | 3,035 | | | | 14,599 | |
| Provision (benefit) for income taxes | | | (9,933 | ) | | | 5,410 | | | | (2,506 | ) | | | (3,057 | ) | | | (10,086 | ) |
| Debt extinguishment costs, net | | | 21,491 | | | | - | | | | - | | | | - | | | | 21,491 | |
| Gain on insurance recovery | | | - | | | | (1,023 | ) | | | (987 | ) | | | (324 | ) | | | (2,334 | ) |
| Unreimbursed business interruption costs | | | - | | | | 500 | | | | - | | | | - | | | | 500 | |
| Secondary offering costs | | | - | | | | - | | | | 704 | | | | 50 | | | | 754 | |
| Non-cash charges: | | | | | | | | | | | | | | | | | | | | |
| Share-based compensation | | | 3,448 | | | | 4,565 | | | | 3,179 | | | | 2,563 | | | | 13,755 | |
| Embedded derivative | | | (50 | ) | | | - | | | | - | | | | - | | | | (50 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA (1) | | $ | 16,960 | | | $ | 30,074 | | | $ | 7,999 | | | $ | 6,303 | | | $ | 61,336 | |
| (1) | The Company's Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairmentsand stock compensation as well as certain non-recurring 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 substantiallythe same definition of Adjusted EBITDA except that the ABL Facility caps certain non-recurring 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
ADJUSTED NET INCOME (LOSS) PER DILUTED COMMON SHARE AND NET INCOME (LOSS) COMPARISON
(Unaudited)
| | | Fiscal Three Months Ended | | | Fiscal Six Months Ended | |
| | | May 3, | | | May 4, | | | May 3, | | | May 4, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| Net loss per diluted common share, GAAP basis | | $ | (0.10 | ) | | $ | (0.07 | ) | | $ | (0.11 | ) | | $ | (0.13 | ) |
| Gain on insurance recovery, net of taxes | | | - | | | | (0.00 | ) | | | - | | | | (0.01 | ) |
| Secondary offering costs, net of taxes | | | - | | | | 0.00 | | | | - | | | | 0.01 | |
| Foreign exchange loss, net of taxes | | | - | | | | (0.00 | ) | | | - | | | | 0.00 | |
| Strategic development and acquisition related costs, net of taxes | | | 0.00 | | | | - | | | | 0.02 | | | | - | |
| Restructuring charges, net of taxes | | | 0.01 | | | | - | | | | 0.03 | | | | - | |
| Short lived acquisition method fair value adjustments, net of taxes | | | 0.03 | | | | - | | | | 0.03 | | | | - | |
| Adjusted net loss per diluted common share (1) | | $ | (0.06 | ) | | $ | (0.07 | ) | | $ | (0.03 | ) | | $ | (0.13 | ) |
| | | Fiscal Three Months Ended | | | Fiscal Six Months Ended | |
| | | May 3, | | | May 4, | | | May 3, | | | May 4, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| Net loss applicable to common shares, GAAP basis | | $ | (7,488 | ) | | $ | (4,905 | ) | | $ | (7,808 | ) | | $ | (9,163 | ) |
| Gain on insurance recovery, net of taxes | | | - | | | | (199 | ) | | | - | | | | (807 | ) |
| Secondary offering costs, net of taxes | | | - | | | | 31 | | | | - | | | | 465 | |
| Foreign exchange loss, net of taxes | | | - | | | | (211 | ) | | | - | | | | 325 | |
| Strategic development and acquisition related costs, net of taxes | | | 387 | | | | - | | | | 1,452 | | | | - | |
| Restructuring charges, net of taxes | | | 904 | | | | - | | | | 1,814 | | | | - | |
| Short lived acquisition method fair value adjustments, net of taxes | | | 1,915 | | | | - | | | | 2,514 | | | | - | |
| Adjusted net loss applicable to common shares (1) | | $ | (4,282 | ) | | $ | (5,284 | ) | | $ | (2,028 | ) | | $ | (9,180 | ) |
(1) The Company discloses a tabular comparison of Adjusted net loss per diluted common share and Adjusted net loss 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 loss per diluted common shareand Adjusted net loss applicable to common shares should not be considered in isolation or as a substitute for net loss per diluted common share and net loss applicable to commonshares as reported on the face of our consolidated statement of operations.
NCI Building Systems, Inc.
Reconciliation of Segment Sales to Third Party Segment Sales
(In thousands)
(Unaudited)
| | | Fiscal | | | | | | Fiscal | | | | | | | | | % | |
| | | 2nd Qtr 2015 | | | | | | 2nd Qtr 2014 | | | | | | Inc/(Dec) | | | Change | |
| Metal Coil Coating | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 49,998 | | | | 12 | % | | $ | 54,307 | | | | 15 | % | | | (4,309 | ) | | | -7.9 | % |
| Less: Intersegment sales | | | 27,194 | | | | | | | | 28,799 | | | | | | | | (1,605 | ) | | | -5.6 | % |
| Third Party Sales | | $ | 22,804 | | | | 6 | % | | $ | 25,508 | | | | 9 | % | | | (2,704 | ) | | | -10.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 2,397 | | | | 11 | % | | $ | 3,893 | | | | 15 | % | | | (1,496 | ) | | | -38.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Metal Components | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 221,118 | | | | 53 | % | | $ | 155,085 | | | | 43 | % | | | 66,033 | | | | 42.6 | % |
| Less: Intersegment sales | | | 22,437 | | | | | | | | 19,351 | | | | | | | | 3,086 | | | | 15.9 | % |
| Third Party Sales | | $ | 198,681 | | | | 55 | % | | $ | 135,734 | | | | 44 | % | | | 62,947 | | | | 46.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 6,941 | | | | 3 | % | | $ | 4,559 | | | | 3 | % | | | 2,382 | | | | 52.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Engineered Building Systems | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 143,245 | | | | 35 | % | | $ | 149,411 | | | | 42 | % | | | (6,166 | ) | | | -4.1 | % |
| Less: Intersegment sales | | | 4,583 | | | | | | | | 4,853 | | | | | | | | (270 | ) | | | -5.6 | % |
| Third Party Sales | | $ | 138,662 | | | | 39 | % | | $ | 144,558 | | | | 47 | % | | | (5,896 | ) | | | -4.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 2,855 | | | | 2 | % | | $ | 36 | | | | 0 | % | | | 2,819 | | | | 7830.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 414,361 | | | | 100 | % | | $ | 358,803 | | | | 100 | % | | | 55,558 | | | | 15.5 | % |
| Less: Intersegment | | | 54,214 | | | | | | | | 53,003 | | | | | | | | 1,211 | | | | 2.3 | % |
| Third Party Sales | | $ | 360,147 | | | | 100 | % | | $ | 305,800 | | | | 100 | % | | | 54,347 | | | | 17.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Loss | | $ | (3,617 | ) | | | -1 | % | | $ | (5,513 | ) | | | -2 | % | | | 1,896 | | | | -34.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Fiscal YTD | | | | | | Fiscal YTD | | | | | | | | | % | |
| | | 2nd Qtr 2015 | | | | | | 2nd Qtr 2014 | | | | | | Inc/(Dec) | | | Change | |
| Metal Coil Coating | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 105,608 | | | | 13 | % | | $ | 108,574 | | | | 15 | % | | | (2,966 | ) | | | -2.7 | % |
| Less: Intersegment sales | | | 58,400 | | | | | | | | 58,476 | | | | | | | | (76 | ) | | | -0.1 | % |
| Third Party Sales | | $ | 47,208 | | | | 7 | % | | $ | 50,098 | | | | 8 | % | | | (2,890 | ) | | | -5.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 6,375 | | | | 14 | % | | $ | 10,388 | | | | 21 | % | | | (4,013 | ) | | | -38.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Metal Components | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 393,907 | | | | 50 | % | | $ | 313,278 | | | | 43 | % | | | 80,629 | | | | 25.7 | % |
| Less: Intersegment sales | | | 41,198 | | | | | | | | 38,198 | | | | | | | | 3,000 | | | | 7.9 | % |
| Third Party Sales | | $ | 352,709 | | | | 52 | % | | $ | 275,080 | | | | 45 | % | | | 77,629 | | | | 28.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 15,277 | | | | 4 | % | | $ | 8,670 | | | | 3 | % | | | 6,607 | | | | 76.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Engineered Building Systems | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 293,045 | | | | 37 | % | | $ | 301,648 | | | | 42 | % | | | (8,603 | ) | | | -2.9 | % |
| Less: Intersegment sales | | | 9,889 | | | | | | | | 10,360 | | | | | | | | (471 | ) | | | -4.5 | % |
| Third Party Sales | | $ | 283,156 | | | | 41 | % | | $ | 291,288 | | | | 47 | % | | | (8,132 | ) | | | -2.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | $ | 11,574 | | | | 4 | % | | $ | 1,676 | | | | 1 | % | | | 9,898 | | | | 590.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Sales | | $ | 792,560 | | | | 100 | % | | $ | 723,500 | | | | 100 | % | | | 69,060 | | | | 9.5 | % |
| Less: Intersegment sales | | | 109,487 | | | | | | | | 107,034 | | | | | | | | 2,453 | | | | 2.3 | % |
| Third Party Sales | | $ | 683,073 | | | | 100 | % | | $ | 616,466 | | | | 100 | % | | | 66,607 | | | | 10.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income (Loss) | | $ | 954 | | | | 0 | % | | $ | (8,681 | ) | | | -1 | % | | | 9,635 | | | | 111.0 | % |
