In the news release, NCI Building Systems (NYSE: NCS) Reports
Third- Quarter Results, issued yesterday, Aug. 31, by NCI Building
Systems, Inc. over PR Newswire, the following financial table has
been updated, and should read as follows: HOUSTON, Aug. 31
/PRNewswire-FirstCall/ -- NCI Building Systems, Inc. (NYSE:NCS)
today announced financial results for the third quarter and nine
months ended July 30, 2005. Sales were $292.7 million for the third
quarter compared with $295.8 million for the third quarter of
fiscal 2004. Net income for the third quarter of fiscal 2005 was
$14.7 million, or $0.70 per diluted share, up from $8.4 million, or
$0.41 per diluted share, for the third quarter of fiscal 2004.
Results for the third quarter of fiscal 2004 include a charge for
debt refinancing costs of $9.9 million ($5.8 million, or $0.28 per
diluted share, after tax). Sales for the first nine months of
fiscal 2005 were $788.5 million compared with $765.9 million for
the first nine months of fiscal 2004. Net income increased to $36.1
million, or $1.73 per diluted share, for the latest nine-month
period from $21.9 million, or $1.09 per diluted share, for the
comparable period in fiscal 2004. Net income for the first nine
months of 2005 includes the effect of an after-tax benefit of $1.1
million, or $0.06 per diluted share, related to more favorable
group medical claims experience than expected, which was recognized
in the first quarter of fiscal 2005. A.R. Ginn, Chairman and Chief
Executive Officer of NCI, commented, "Our third-quarter results met
our earnings guidance in an environment that remains challenging.
Our performance is attributable to the continued expansion of both
the sales and operating profit margin of our Engineered Buildings
business compared with the comparable prior-year quarter. We were
also pleased that even with the seasonal increase in Buildings
sales from the second quarter of 2005, our bookings for the quarter
enabled us to record modest growth in our backlog of 4.3%, which
ended the third quarter at $204 million. Third-quarter results for
our components business and, consequently, our coatings business,
continued to reflect our adherence to a disciplined pricing
strategy in a period of less-than-anticipated industry demand.
"Illustrating the overall industry environment, McGraw-Hill's Dodge
Report indicates that square footage of new nonresidential
construction projects in our industry segments declined 8.3% for
calendar 2005 through July compared with the same period in 2004.
The Dodge Report notes sequential improvements in square footage
for the months of June and July and anticipates that growth in
square footage throughout the second half of calendar 2005 will
bring total square footage for the year to a level approximating
the total for 2004. Our results remained stronger than general
industry trends, although the year-to- date decline in industry
square footage, as well as the improvements as the third quarter
progressed, were relatively consistent with our experience. "The
profitability of our operations produced a further strengthening of
our financial position during the third quarter. Our cash flow from
operations for the nine months ending July 30, 2005 was up $46.3
million to $70.2 million compared to $23.9 million for the nine
months ending July 31, 2004. Furthermore, our trailing twelve
months adjusted EBITDA increased by 28.9% to 140.3 million over the
same period in 2004. As a result, although we completed the third
quarter with debt to total capitalization of 44.9% compared with
35.1% at October 30, 2004, our net debt (debt minus cash) to total
capitalization (net debt plus shareholders' equity) has improved to
28.0% at the end of the third quarter compared with 30.9% at the
end of the second quarter of fiscal 2005 and 34.2% at the end of
fiscal 2004. "Based on NCI's results of operations for the third
quarter and first nine months of fiscal 2005, as well as lower
expectations for industry performance during the full fiscal year,
we today established our guidance for fourth- quarter net income
per diluted share in a range of $0.93 to $1.03. As a result of this
guidance, we have reduced our guidance for full-year fiscal 2005 to
a range of $2.60 to $2.70. Our guidance excludes the effect of the
first-quarter after-tax benefit of $1.1 million, or $0.06 per
diluted share." Mr. Ginn concluded, "We continue to expect to
achieve record sales, net income and net income per share for
fiscal 2005. In spite of the weakness in the nonresidential
construction industry for the first seven months of calendar 2005,
combined with reduced visibility for our fiscal fourth quarter, we
remain cautiously optimistic that our fourth-quarter results will
improve significantly on a sequential-quarter basis over the third
quarter just ended. Supporting these expectations, the strengths
that underlie NCI's position of industry leadership -- the broadest
line of innovative metal construction products; commitment to
customer service; an integrated, nationwide network of plants and
distribution centers; and state-of-the-art design and manufacturing
capabilities producing the highest quality products and the lowest
cost infrastructure -- have positioned us well to continue
outperforming the industry." This release contains forward-looking
statements concerning NCI's business and operations and industry
conditions, including among others industry trends, steel pricing,
growth expectations and margin expansion. Forward- looking
statements involve a number of risks and uncertainties, and NCI's
actual performance may differ materially from that projected in
such statements. Among the factors that could cause actual results
to differ materially are industry cyclicality and seasonality,
fluctuations in demand and prices for steel, the financial
condition of NCI's raw material suppliers, competitive activity and
pricing pressure, ability to execute NCI's acquisition strategy and
general economic conditions affecting the construction industry.
These and other factors that could affect NCI's financial position
and results of operations are described in further detail in NCI's
filings with the Securities and Exchange Commission. 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. is one of
North America's largest integrated manufacturers of metal products
for the nonresidential building industry. The Company operates
manufacturing and distribution facilities located in 16 states and
Mexico. Three Months Ended Three Months Ended July 30, 2005 July
31, 2004 % Tot % Tot Sales: Metal components $ 151,298 52 $ 153,975
52 Engineered building systems 115,018 39 113,714 38 Metal coil
coating 26,418 9 28,125 10 Intersegment sales 59,716 20 62,604 21
Eliminations (59,716) (20) (62,604) (21) Total net sales $292,734
100 $295,814 100 Operating income: % Sale % Sale Metal components
$18,945 13 $20,889 14 Engineered building systems 13,572 12 8,218 7
Metal coil coating 3,430 13 7,568 27 Corporate (8,915) -- (9,166)
-- Total operating income (% of sales) $27,032 9 $27,509 9 Nine
Months Ended Nine Months Ended July 30, 2005 July 31, 2004 % Tot %
Tot Sales: Metal components $ 413,418 52 $ 416,764 54 Engineered
building systems 296,932 38 259,530 34 Metal coil coating 78,194 10
89,612 12 Intersegment sales 159,997 20 138,045 18 Eliminations
(159,997) (20) (138,045) (18) Total net sales $788,544 100 $765,906
100 Operating income: % Sale % Sale Metal components $54,057 13
$50,185 12 Engineered building systems 29,679 10 12,735 5 Metal
coil coating 11,537 15 20,622 23 Corporate (28,040) -- (25,137) --
Total operating income (% of sales) $67,233 9 $58,405 8 NCI
BUILDING SYSTEMS, INC. STATEMENTS OF INCOME (Unaudited) (In
thousands, except per share data) For the Three For the Nine Months
Ended Months Ended July 30, July 31, July 30, July 31, 2005 2004
2005 2004 Sales $292,734 $295,814 $788,544 $765,906 Cost of sales
221,572 227,578 597,113 589,835 Gross profit 71,162 68,236 191,431
176,071 24.3% 23.1% 24.3% 23.0% Selling, general and administrative
expenses 44,130 40,727 124,198 117,666 Income from operations
27,032 27,509 67,233 58,405 Interest expense (3,993) (3,736)
(10,712) (12,618) Loss on debt refinancing -- (9,879) -- (9,879)
Other income, net 1,737 1,184 4,191 1,939 Income before income
taxes 24,776 15,078 60,712 37,847 Provision for income taxes 10,087
6,683 24,569 15,991 40.7% 44.3% 40.5% 42.3% Net income $14,689
$8,395 $36,143 $21,856 Net income per share: Basic $0.71 $0.42
$1.76 $1.11 Diluted $0.70 $0.41 $1.73 $1.09 Average shares
outstanding: Basic 20,738 19,937 20,565 19,589 Diluted 21,012
20,236 20,919 19,863 Increase (decrease) in sales -1.0% 3.0%
Increase in diluted earnings per share 70.7% 58.7% Gross profit
percentage 24.3% 23.1% 24.3% 23.0% Selling, general and
administrative expenses percentage 15.1% 13.8% 15.8% 15.4% Income
from operations percentage 9.2% 9.3% 8.5% 7.6% NCI BUILDING
SYSTEMS, INC. COMPUTATION OF EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION, AMORTIZATION AND OTHER NONCASH ITEMS ("ADJUSTED
EBITDA") (Unaudited) (In thousands) Trailing 12 Months July 30,
July 31, 2005 2004 Net income $59,177 $31,968 Add: Provision for
income taxes 38,345 22,143 Interest expense, net of interest income
and amortization on deferred financing costs 13,220 17,697
Depreciation and amortization 23,838 23,110 401(k) noncash
contributions 5,754 3,723 Loss on debt refinancing -- 9,879 (1)
Non-cash real estate -- 391 Adjusted EBITDA (2) $140,334 $108,911
(1) The loss on debt refinancing was treated as extraordinary per
the provisions of SFAS No. 4, "Reporting Gains and Losses from
Extinguishment of Debt," which were applicable during fiscal year
2002. (2) The Company discloses adjusted EBITDA, which is a
non-GAAP measure, because it is a widely accepted financial
indicator in the metal construction industry of a company's
profitability, ability to finance its operations, and meet its
growth plans. This measure is also used by NCI internally to make
acquisition and investment decisions. Adjusted EBITDA is calculated
based on the terms contained in the Company's credit agreement.
Adjusted EBITDA should not be considered in isolation or as a
substitute for net income determined in accordance with generally
accepted accounting principles in the United States. RECONCILIATION
OF ADJUSTED NET INCOME AND NET INCOME PER DILUTED SHARE TO NET
INCOME AND NET INCOME PER DILUTED SHARE (Unaudited) (In thousands)
For the Nine Months Ended July 30, July 31, 2005 2004 Net income
$36,143 $21,856 Add loss on debt refinancing - 5,769 Subtract gain
on group medical claims experience (1,114) - Adjusted net income
$35,029 $27,625 Net income per diluted share $1.73 $1.09 Adjusted
net income per diluted share $1.67 $1.39 Diluted shares outstanding
20,919 19,863 Adjusted net earnings and adjusted earnings per
diluted share (the "adjusted items") are non-GAAP financial
measures. The Company excludes the loss on debt refinancing and the
gain on group medical claims experience to improve the
comparability of the results and because both management and most
industry analysts rely on the adjusted items as a primary measure
to review and assess the ongoing operating performance of the
Company. The Company believes it is useful to investors to provide
disclosures of its operating results on the same basis as that used
by management and most industry analysts. The adjusted items should
not be considered in isolation or as a substitute for net earnings
or earnings per diluted share determined in accordance with
generally accepted accounting principles in the United States. NCI
BUILDING SYSTEMS, INC. CONDENSED BALANCE SHEETS (In thousands) July
30, October 30, 2005 2004 (Unaudited) ASSETS Cash $195,085 $8,222
Accounts receivable, net 96,062 108,869 Inventories 110,753 138,363
Deferred taxes 13,352 12,873 Prepaids 3,744 6,491 Total current
assets 418,996 274,818 Property, net 186,997 185,687 Excess of cash
over fair value of acquired net assets 337,244 318,247 Other assets
21,417 4,105 Total assets $964,654 $782,857 LIABILITIES AND
SHAREHOLDERS' EQUITY Current portion of long-term debt $2,000
$2,000 Accounts payable 40,374 57,569 Accrued expenses 68,606
88,012 Total current liabilities 110,980 147,581 Long-term debt,
noncurrent portion 371,500 214,700 Deferred income taxes 23,942
19,399 Equity 458,232 401,177 Total Liabilities and Shareholders'
Equity $964,654 $782,857 NCI BUILDING SYSTEMS, INC. CONDENSED
STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) For the Nine
Months Ended July 30, 2005 July 31, 2004 Net income $36,143 $21,856
Adjustments to reconcile net income to net cash provided by
operating activities: Loss on debt refinancing 9,879 Depreciation
and amortization 18,115 17,209 Loss on sale of fixed assets 135 156
Provision for doubtful accounts 27 2,026 Deferred income tax
benefit -- (170) (Increase)/decrease in current assets 54,082
(73,210) Increase/(decrease) in current liabilities (38,324) 46,128
Net cash provided by operating activities 70,178 23,874 Cash flows
from investing activities: Acquisitions (27,145) -- Capital
expenditures (14,555) (6,715) Proceeds from sale of fixed assets
1,580 558 Other (162) 1,729 Net cash used in investing activities
(40,282) (4,428) Cash flows from financing activities: Proceeds
from stock option exercises 4,957 15,988 Issuance of convertible
debt 180,000 -- Net borrowings/(payments) on revolving lines of
credit (16,700) 10,600 Borrowing of long-term debt -- 200,000
Payments on long-term debt (6,500) (243,750) Payment of refinancing
costs (4,790) (8,060) Net cash provided by (used in) financing
activities 156,967 (25,222) Net increase (decrease) in cash 186,863
(5,776) Cash at beginning of period 8,222 14,204 Cash at end of
period $195,085 $8,428 DATASOURCE: NCI Building Systems, Inc.
CONTACT: Norman C. Chambers, President & Chief Operating
Officer, +1-281-897-7788
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