HOUSTON, June 10, 2014 /PRNewswire/ -- NCI Building Systems, Inc. (NYSE: NCS) today reported financial results for the second quarter ended May 4, 2014.
Second Quarter Financial, Operational and Industry Highlights:
- Sales increased 4.2% to $305.8 million, compared to the prior year's second quarter
- Sequential improvement in gross margin
- Earnings negatively impacted by the effect of adverse weather and spending on growth initiatives
- Bookings improved, driving a 6% year-over-year increase in backlog to $335 million
- Net loss per diluted common share narrowed to $0.07
Norman C. Chambers, Chairman, President and Chief Executive, commented, "Although our second quarter performance was impacted by extreme winter weather in February and March, including disruption to our various manufacturing plants, bookings and backlog began to rebound at the end of the quarter. April and May bookings were up 8% and 28%, respectively, and the 6% growth in our backlog positions us well for the second half. I am encouraged by the improvement in market demand and the success of our value pricing initiatives."
For the fiscal second quarter, sales grew 4.2% to $305.8 million from $293.4 million in the prior year's second quarter reflecting sales growth in all three operating segments.
Gross margin improved sequentially to 19.5% from 19.1% in the first quarter, but was lower on a year-over-year basis due to the continued negative impact of severe weather, which drove 22 plant closure days in 2014 compared to two in the comparable period last year. The benefits of pricing improvements in the quarter were offset by weather related inefficiencies in freight, material costs, manufacturing costs and unfavorable product mix.
Engineering, selling, general administrative (ESG&A) expenses rose 3.7% to $65.1 million from $62.8 million in the second quarter of 2013. Corporate expenses declined 12.7% in the second quarter compared to the same period last year and decreased 6% in the first half of fiscal 2014. However, the reduction in corporate expenses was offset by increased investments in certain growth initiatives, wage increases and costs associated with the ramp-up of our architectural insulated metal panel plant in Richmond, Virginia.
Cash and cash equivalents at the end of the second quarter were $12.5 million compared to $27.5 million in the comparable period last year and down from $77 million at the end of fiscal 2013. The decline from fiscal 2013 reflects the $24 million repurchase of treasury stock and seasonal investments in working capital during the first half of fiscal 2014. In addition, the $150 million ABL facility remains undrawn at the end of the second quarter. Net interest expense was $3.0 million compared to $6.1 million in the second quarter of 2013 as a result of last year's refinancing of our term loan. Net loss per diluted common share of $0.07 improved versus a net loss per diluted common share of $0.28 in the second quarter of last year. The weighted average number of common shares used in the calculation of second quarter loss per diluted common share was 72.8 million. Prior to the May 2013 conversion of preferred shares to common shares, the weighted average number of common shares used in the calculation of second quarter 2013 loss per diluted common share was 19.4 million.
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 credit agreement was $6.3 million, down from $10.6 million in the prior year's second quarter. Please see the reconciliation of Adjusted EBITDA to net income (loss) in the Company's financial statements.
Fiscal Second Quarter 2014 Segment Performance
The Metal Coil Coatings group's third party sales grew 16.5% year-over-year as coating and tolling sales increased for both the light gauge and heavy gauge product lines. Volume improvement was enhanced by favorable mix but the gain was offset by elevated steel costs associated with supply chain disruptions and increased marketing expenditures. Higher utility expenses related to inclement weather and cold temperatures also contributed to lower earnings.
The Metal Components group achieved a 5.1% increase in third party sales versus the prior year's second quarter driven by growth in the legacy single skin products. Pricing was favorable compared to last year's second quarter but operating income of $4.6 million declined 11.3%. The group had increased costs over the prior year due to investments in growth initiatives, the weather related decline in commercial and industrial insulated panel volumes and costs associated with the ramp-up of our Richmond, Virginia architectural insulated metal panel plant.
The Engineered Buildings group's third party sales increased 1.6% compared to last year's second quarter. We began to benefit from value pricing during the quarter and achieved improvement in sales margin and product mix but the gain was offset by weather induced lower volumes and increased freight expenses.
Market commentary
Despite weather related weakness in the first half of fiscal 2014, leading indicators for nonresidential construction activity continue to trend positive. Sustained demand in the industrial sector has led to falling vacancy rates for 14 consecutive quarters according to CBRE Econometric Advisors data. The first quarter of calendar 2014 ended with an 11.1% vacancy rate and 80% of all major industrial markets reporting positive absorption; a reflection of the breadth of the nascent industrial recovery.
The Institute for Supply Management's Purchasing Manager's Index (PMI) registered 55.4 in May, reflecting expansion in the manufacturing sector for the 12th consecutive month. The New Orders Index was 56.9 signaling growth in new orders for the 12th consecutive month and suggesting continued growth in capital spending.
The American Institute of Architects' (AIA) Architecture Mixed Use Index, which declined in January and February recovered and crossed into expansionary territory at 50.7 in April. The index has been above 50 for 16 of the past 21 months, forecasting an increase in U.S. construction spending for the remainder of 2014. Furthermore, the new projects inquiry index increased from 57.9 in March to 59.1 in April, while the new design contract index, recently unveiled by AIA, scored 54.6 providing a strong signal of the direction of future architectural billings.
Finally, the April Federal Senior Loan Survey reflects continued growth of real nonresidential investment in structures as lending standards ease and demand for commercial and industrial projects strengthens.
Summary/Outlook
"Although our performance in the first half of fiscal 2014 was significantly impacted by severe winter weather, our bookings and backlog have continued to improve both sequentially and as compared to last year, both in volumes and in expected margins. The level of inquiries is solid and legacy component sales for commercial and industrial application, a harbinger of the last cyclical recovery, are growing at a double digit pace. Also, the recent realignment of manufacturing operations is resulting in measurable improvement, especially in our Buildings group."
"As we mentioned in our first quarter earnings release, we historically generate approximately 60% to 90% of our annual EBITDA in the second half of the year and we currently anticipate that our second half results will reflect this pattern. We continue to expect mid-single digit growth in low rise new nonresidential starts for our fiscal 2014," Mr. Chambers concluded.
For additional information, please see the CFO Commentary at www.ncibuildingsystems.comunder the tab Quarterly Earnings and Transcripts.
Conference Call Information
The NCI Building Systems, Inc. first quarter conference call is scheduled for Wednesday, June 11, 2014, at 9:00 AM ET. Please dial 1-888-329-8893 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 replay, please dial 1-888-203-1112 and the passcode 1277255# when prompted. The taped replay will be available two hours after the call through June 18, 2014.
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 and Mexico, with additional sales and distribution offices throughout the United States and Canada.
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," "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, as a result, 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 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 the selling stockholders; substantial governance and other rights held by the selling stockholders; 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 3, 2013, 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 4, | April 28, | May 4, | April 28, | |||||
2014 | 2013 | 2014 | 2013 | |||||
Sales | $ 305,800 | $ 293,399 | $ 616,466 | $ 590,983 | ||||
Cost of sales, excluding gain on insurance recovery | 246,527 | 232,562 | 498,955 | 469,277 | ||||
Gain on insurance recovery | (324) | - | (1,311) | - | ||||
Gross profit | 59,597 | 60,837 | 118,822 | 121,706 | ||||
19.5% | 20.7% | 19.3% | 20.6% | |||||
Engineering, selling, general and administrative expenses | 65,110 | 62,782 | 127,503 | 123,253 | ||||
Loss from operations | (5,513) | (1,945) | (8,681) | (1,547) | ||||
Interest income | 24 | 42 | 50 | 72 | ||||
Interest expense | (3,059) | (6,191) | (6,185) | (12,465) | ||||
Other income, net | 586 | 246 | 90 | 640 | ||||
Loss before income taxes | (7,962) | (7,848) | (14,726) | (13,300) | ||||
Benefit from income taxes | (3,057) | (2,506) | (5,563) | (4,331) | ||||
38.4% | 31.9% | 37.8% | 32.6% | |||||
Net loss | $ (4,905) | $ (5,342) | $ (9,163) | $ (8,969) | ||||
Net loss applicable to common shares | $ (4,905) | $ (5,342) | $ (9,163) | $ (8,969) | ||||
Loss per common share: | ||||||||
Basic | $ (0.07) | $ (0.28) | $ (0.13) | $ (0.46) | ||||
Diluted | $ (0.07) | $ (0.28) | $ (0.13) | $ (0.46) | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 72,838 | 19,416 | 73,177 | 19,326 | ||||
Diluted | 72,838 | 19,416 | 73,177 | 19,326 | ||||
Increase in sales | 4.2% | 4.3% | ||||||
Gross profit percentage | 19.5% | 20.7% | 19.3% | 20.6% | ||||
Engineering, selling, general and administrative | ||||||||
expenses percentage | 21.3% | 21.4% | 20.7% | 20.9% | ||||
NCI BUILDING SYSTEMS, INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands) | ||||||
May 4, | November 3, | |||||
2014 | 2013 | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Cash and cash equivalents | $ 12,468 | $ 77,436 | ||||
Accounts receivable, net | 109,651 | 135,368 | ||||
Inventories, net | 136,245 | 122,105 | ||||
Deferred income taxes | 33,619 | 27,736 | ||||
Income tax receivable | 1,114 | 1,112 | ||||
Prepaid expenses and other | 20,986 | 19,300 | ||||
Investments in debt and equity securities, at market | 5,249 | 4,892 | ||||
Assets held for sale | 5,408 | 2,879 | ||||
Total current assets | 324,740 | 390,828 | ||||
Property, plant and equipment, net | 252,966 | 260,918 | ||||
Goodwill | 75,226 | 75,226 | ||||
Intangible assets, net | 46,949 | 48,975 | ||||
Deferred financing costs, net | 3,799 | 4,316 | ||||
Total assets | $ 703,680 | $ 780,263 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current portion of long-term debt | $ 2,384 | $ 2,384 | ||||
Note payable | 1,461 | 613 | ||||
Accounts payable | 100,949 | 144,553 | ||||
Accrued compensation and benefits | 41,128 | 40,954 | ||||
Accrued interest | 1,731 | 1,844 | ||||
Other accrued expenses | 56,012 | 61,266 | ||||
203,665 | 251,614 | |||||
Long-term debt, net | 234,195 | 235,391 | ||||
Deferred income taxes | 31,425 | 32,185 | ||||
Other long-term liabilities | 8,267 | 8,315 | ||||
Total long-term liabilities | 273,887 | 275,891 | ||||
Common stock | 1,460 | 1,471 | ||||
Additional paid-in capital | 625,370 | 638,574 | ||||
Accumulated deficit | (391,898) | (382,735) | ||||
Accumulated other comprehensive loss | (4,657) | (4,436) | ||||
Treasury stock, at cost | (4,147) | (116) | ||||
Total stockholders' equity | 226,128 | 252,758 | ||||
Total liabilities and stockholders' equity | $ 703,680 | $ 780,263 | ||||
NCI BUILDING SYSTEMS, INC. | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
(In thousands) | ||||
(Unaudited) | ||||
Fiscal Six Months Ended | ||||
May 4, | April 28, | |||
2014 | 2013 | |||
Cash flows from operating activities: | ||||
Net loss | $ (9,163) | $ (8,969) | ||
Adjustments to reconcile net loss to net cash used in | ||||
operating activities: | ||||
Depreciation and amortization | 17,708 | 17,932 | ||
Deferred financing cost amortization | 592 | 2,171 | ||
Share-based compensation expense | 5,742 | 6,887 | ||
Gain on insurance recovery | (1,311) | - | ||
Provision for doubtful accounts | 585 | 1,100 | ||
Benefit from deferred income taxes | (5,884) | (4,772) | ||
Excess tax benefits from share-based compensation arrangements | (760) | - | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 25,132 | 19,812 | ||
Inventories | (14,140) | (19,764) | ||
Income tax receivable | (2) | (381) | ||
Prepaid expenses and other | 862 | 286 | ||
Accounts payable | (43,610) | (15,425) | ||
Accrued expenses | (6,473) | (2,389) | ||
Other, net | 214 | (278) | ||
Net cash used in operating activities | (30,508) | (3,790) | ||
Cash flows from investing activities: | ||||
Capital expenditures | (10,004) | (12,715) | ||
Proceeds from insurance | 1,311 | - | ||
Net cash used in investing activities | (8,693) | (12,715) | ||
Cash flows from financing activities: | ||||
Proceeds from stock options exercised | - | 674 | ||
Decrease in restricted cash | - | 1,375 | ||
Payments on term loan | (1,196) | (10,375) | ||
Payments on note payable | (547) | (593) | ||
Proceeds from Amended ABL Facility | 47,000 | 17,000 | ||
Payments on Amended ABL Facility | (47,745) | (17,633) | ||
Payment of financing costs | (75) | (97) | ||
Excess tax benefits from share-based compensation arrangements | 760 | 948 | ||
Purchase of treasury stock | (23,743) | (2,369) | ||
Net cash used in financing activities | (25,546) | (11,070) | ||
Effect of exchange rate changes on cash and cash equivalents | (221) | (45) | ||
Net decrease in cash and cash equivalents | (64,968) | (27,620) | ||
Cash and cash equivalents at beginning of period | 77,436 | 55,158 | ||
Cash and cash equivalents at end of period | $ 12,468 | $ 27,538 | ||
NCI Building Systems, Inc. | |||||||||
Business Segments | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
Fiscal Three Months Ended | Fiscal Three Months Ended | $ | % | ||||||
May 4, 2014 | April 28, 2013 | Inc/(Dec) | Change | ||||||
% of | % of | ||||||||
Total | Total | ||||||||
Sales: | Sales | Sales | |||||||
Metal coil coating | $ 54,307 | 15 | $ 49,790 | 14 | $ 4,517 | 9.1% | |||
Metal components | 155,085 | 43 | 147,163 | 43 | 7,922 | 5.4% | |||
Engineered building systems | 149,411 | 42 | 148,095 | 43 | 1,316 | 0.9% | |||
Total sales | 358,803 | 100 | 345,048 | 100 | 13,755 | 4.0% | |||
Less: Intersegment sales | 53,003 | 15 | 51,649 | 15 | 1,354 | 2.6% | |||
Total net sales | $ 305,800 | 85 | $ 293,399 | 85 | $ 12,401 | 4.2% | |||
% of | % of | ||||||||
Operating income (loss): | Sales | Sales | |||||||
Metal coil coating | $ 3,893 | 7 | $ 4,755 | 10 | $ (862) | -18.1% | |||
Metal components | 4,559 | 3 | 5,137 | 3 | (578) | -11.3% | |||
Engineered building systems | 36 | 0 | 4,196 | 3 | (4,160) | -99.2% | |||
Corporate | (14,001) | - | (16,033) | - | 2,032 | 12.7% | |||
Total operating income (loss) (% of sales) | $ (5,513) | (2) | $ (1,945) | (1) | $ (3,568) | -183.5% | |||
Fiscal Six Months Ended | Fiscal Six Months Ended | $ | % | ||||||
May 4, 2014 | April 28, 2013 | Inc/(Dec) | Change | ||||||
% of | % of | ||||||||
Total | Total | ||||||||
Sales: | Sales | Sales | |||||||
Metal coil coating | $ 108,574 | 15 | $ 99,061 | 14 | $ 9,513 | 9.6% | |||
Metal components | 313,278 | 43 | 301,067 | 43 | 12,211 | 4.1% | |||
Engineered building systems | 301,648 | 42 | 295,661 | 43 | 5,987 | 2.0% | |||
Total sales | 723,500 | 100 | 695,789 | 100 | 27,711 | 4.0% | |||
Intersegment sales | 107,034 | 15 | 104,806 | 15 | 2,228 | 2.1% | |||
Total net sales | $ 616,466 | 85 | $ 590,983 | 85 | $ 25,483 | 4.3% | |||
% of | % of | ||||||||
Operating income (loss): | Sales | Sales | |||||||
Metal coil coating | $ 10,388 | 10 | $ 10,297 | 10 | $ 91 | 0.9% | |||
Metal components | 8,670 | 3 | 11,209 | 4 | (2,539) | -22.7% | |||
Engineered building systems | 1,676 | 1 | 8,237 | 3 | (6,561) | -79.7% | |||
Corporate | (29,415) | - | (31,290) | - | 1,875 | 6.0% | |||
Total operating income (loss) (% of sales) | $ (8,681) | (1) | $ (1,547) | (0) | $ (7,134) | -461.2% | |||
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 4, 2014 AND APRIL 28, 2013 | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Fiscal Three Months Ended May 4, 2014 | |||||||||||
Metal Coil | Metal | Engineered | 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) | ||||||
Fiscal Three Months Ended April 28, 2013 | |||||||||||
Metal Coil | Metal | Engineered | Corporate | Consolidated | |||||||
Operating income (loss), GAAP basis (2) | $ 4,755 | $ 5,137 | $ 4,196 | $(16,033) | $(1,945) | ||||||
(1) | The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure because it isinstrumental 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. | ||||||||||
(2) | The Company did not incur any special charges during the three months ended April 28, 2013. | ||||||||||
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 4, 2014 AND APRIL 28, 2013 | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Fiscal Six Months Ended May 4, 2014 | |||||||||||
Metal Coil | Metal | Engineered | 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) | ||||||
Fiscal Six Months Ended April 28, 2013 | |||||||||||
Metal Coil | Metal | Engineered | Corporate | Consolidated | |||||||
Operating income (loss), GAAP basis | $ 10,297 | $ 11,209 | $ 8,237 | $(31,290) | $(1,547) | ||||||
(1) | The Company discloses a tabular comparison of Adjusted operating income (loss), which is a non-GAAP measure because it isinstrumental 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. | ||||||||||
(2) | The Company did not incur any special charges during the six months ended April 28, 2013. | ||||||||||
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 | ||||||
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 | |||||
3rd Qtr | 4th Qtr | 1st Qtr | 2nd Qtr | Trailing 12 Months | ||||||
July 29, | October 28, | January 27, | April 28, | April 28, | ||||||
2012 | 2012 | 2013 | 2013 | 2013 | ||||||
Net income (loss) | $ (3,267) | $ 6,270 | $ (3,627) | $ (5,342) | $ (5,966) | |||||
Add: | ||||||||||
Depreciation and amortization | 7,248 | 10,355 | 9,122 | 8,809 | 35,534 | |||||
Consolidated interest expense, net | 4,159 | 6,226 | 6,244 | 6,149 | 22,778 | |||||
Provision (benefit) for income taxes | (663) | 3,379 | (1,825) | (2,506) | (1,615) | |||||
Acquisition-related costs | 2,946 | 153 | - | - | 3,099 | |||||
Debt extinguishment costs, net | 6,437 | - | - | - | 6,437 | |||||
Executive retirement | - | - | - | - | - | |||||
Non-cash charges: | ||||||||||
Share-based compensation | 2,090 | 3,116 | 3,442 | 3,445 | 12,093 | |||||
Asset impairments (recoveries) | (22) | 13 | - | - | (9) | |||||
Embedded derivative | (5) | (5) | (5) | (4) | (19) | |||||
Adjusted EBITDA (1) | $ 18,923 | $ 29,507 | $ 13,351 | $ 10,551 | $ 72,332 | |||||
(1) | The Company's Credit Agreement defines Adjusted EBITDA. Adjusted EBITDA excludes non-cash charges for goodwill and other asset impairments 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 substantially the 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 LOSS PER DILUTED COMMON SHARE AND NET LOSS COMPARISON | |||||||
(Unaudited) | |||||||
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||
May 4, | April 28, | May 4, | April 28, | ||||
2014 | 2013 | 2014 | 2013 | ||||
Net loss per diluted common share, GAAP basis | $ (0.07) | $ (0.28) | $ (0.13) | $ (0.46) | |||
Gain on insurance recovery, net of taxes | (0.00) | - | (0.01) | - | |||
Secondary offering costs, net of taxes | 0.00 | - | 0.01 | - | |||
Foreign exchange loss (gain), net of taxes | (0.00) | - | 0.00 | - | |||
Adjusted net loss per diluted common share (1) | $ (0.07) | $ (0.28) | $ (0.13) | $ (0.46) | |||
Fiscal Three Months Ended | Fiscal Six Months Ended | ||||||
May 4, | April 28, | May 4, | April 28, | ||||
2014 | 2013 | 2014 | 2013 | ||||
Net loss applicable to common shares, GAAP basis | $(4,905) | $(5,342) | $(9,163) | $(8,969) | |||
Gain on insurance recovery, net of taxes | (199) | - | (807) | - | |||
Secondary offering costs, net of taxes | 31 | - | 465 | - | |||
Foreign exchange loss (gain), net of taxes | (211) | - | 325 | - | |||
Adjusted net loss applicable to common shares (1) | $(5,284) | $(5,342) | $(9,180) | $(8,969) | |||
(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 share and 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 common shares as reported on the face of our consolidated statement of operations. | ||||||
NCI Building Systems, Inc. | |||||||||
Reconciliation of Segment Sales to Third Party Segment Sales (Internal Information) | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
Fiscal | Fiscal | % | |||||||
2nd Qtr 2014 | 2nd Qtr 2013 | Inc/(Dec) | Change | ||||||
Metal Coil Coating | |||||||||
Total Sales | $ 54,307 | 15% | $ 49,790 | 14% | 4,517 | 9.1% | |||
Less: Intersegment sales | 28,799 | 27,903 | 896 | 3.2% | |||||
Third Party Sales | $ 25,508 | 9% | $ 21,887 | 7% | 3,621 | 16.5% | |||
Operating Income (Loss) | $ 3,893 | 15% | $ 4,755 | 22% | (862) | -18.1% | |||
Metal Components | |||||||||
Total Sales | $ 155,085 | 43% | $ 147,163 | 43% | 7,922 | 5.4% | |||
Less: Intersegment sales | 19,351 | 17,982 | 1,369 | 7.6% | |||||
Third Party Sales | $ 135,734 | 44% | $ 129,181 | 44% | 6,553 | 5.1% | |||
Operating Income (Loss) | $ 4,559 | 3% | $ 5,137 | 4% | (578) | -11.3% | |||
Engineered Building Systems | |||||||||
Total Sales | $ 149,411 | 42% | $ 148,095 | 43% | 1,316 | 0.9% | |||
Less: Intersegment sales | 4,853 | 5,764 | (911) | -15.8% | |||||
Third Party Sales | $ 144,558 | 47% | $ 142,331 | 49% | 2,227 | 1.6% | |||
Operating Income (Loss) | $ 36 | 0% | $ 4,196 | 3% | (4,160) | -99.1% | |||
Consolidated | |||||||||
Total Sales | $ 358,803 | 100% | $ 345,048 | 100% | 13,755 | 4.0% | |||
Less: Intersegment | 53,003 | 51,649 | 1,354 | 2.6% | |||||
Third Party Sales | $ 305,800 | 100% | $ 293,399 | 100% | 12,401 | 4.2% | |||
Operating Income (Loss) | $ (5,513) | -2% | $ (1,945) | -1% | (3,568) | 183.4% | |||
Fiscal YTD | Fiscal YTD | % | |||||||
2nd Qtr 2014 | 2nd Qtr 2013 | Inc/(Dec) | Change | ||||||
Metal Coil Coating | |||||||||
Total Sales | $ 108,574 | 15% | $ 99,061 | 14% | 9,513 | 9.6% | |||
Less: Intersegment sales | 58,476 | 57,953 | 523 | 0.9% | |||||
Third Party Sales | $ 50,098 | 8% | $ 41,108 | 7% | 8,990 | 21.9% | |||
Operating Income (Loss) | $ 10,388 | 21% | $ 10,297 | 25% | 91 | 0.9% | |||
Metal Components | |||||||||
Total Sales | $ 313,278 | 43% | $ 301,067 | 43% | 12,211 | 4.1% | |||
Less: Intersegment sales | 38,198 | 35,358 | 2,840 | 8.0% | |||||
Third Party Sales | $ 275,080 | 45% | $ 265,709 | 45% | 9,371 | 3.5% | |||
Operating Income (Loss) | $ 8,670 | 3% | $ 11,209 | 4% | (2,539) | -22.7% | |||
Engineered Building Systems | |||||||||
Total Sales | $ 301,648 | 42% | $ 295,661 | 42% | 5,987 | 2.0% | |||
Less: Intersegment sales | 10,360 | 11,495 | (1,135) | -9.9% | |||||
Third Party Sales | $ 291,288 | 47% | $ 284,166 | 48% | 7,122 | 2.5% | |||
Operating Income (Loss) | $ 1,676 | 1% | $ 8,237 | 3% | (6,561) | -79.7% | |||
Consolidated | |||||||||
Total Sales | $ 723,500 | 100% | $ 695,789 | 100% | 27,711 | 4.0% | |||
Less: Intersegment sales | 107,034 | 104,806 | 2,228 | 2.1% | |||||
Third Party Sales | $ 616,466 | 100% | $ 590,983 | 100% | 25,483 | 4.3% | |||
Operating Income (Loss) | $ (8,681) | -1% | $ (1,547) | 0% | (7,134) | 461.2% | |||
SOURCE NCI Building Systems, Inc.
